‘Act of God’ ramps up NRL-Nine blood feud

The bad blood between Channel 9 and the NRL has intensified with the parties now locked in a fresh dispute over an Act of God clause taken out by the governing body.

News Corp can reveal the NRL has formally notified its commercial and broadcast partners it has activated a Force Majeure clause to insulate the governing body financially in the wake of the fallout from the COVID-19 ordeal.

The clause covers all contracts in the NRL's mega commercial stable - including their $625 million contract with disgruntled free-to-air broadcaster Channel 9.

 

A Force Majeure is a clause which gives the NRL contractual protection in the event an Act of God, in this case the coronavirus pandemic, affects their ability to fulfil obligations to sponsors and broadcasters.

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The NRL and Nine are at loggerheads. Photo by Matt King/Getty Images.
The NRL and Nine are at loggerheads. Photo by Matt King/Getty Images.

By suspending the season a fortnight ago, the NRL are technically in breach of their $1.8 billion broadcast deal with Channel 9 and Fox Sports, a scenario that could ostensibly trigger legal action.

But the Force Majeure clause protects the NRL from being sued at a time when the COVID-19 saga could cost the code up to $470 million in lost revenue this season.

Sources close to negotiations say the NRL has no intention of invoking the Force Majeure as a get-out clause to broker new, and possibly more lucrative, deals with other sponsors or broadcasters.

But the move has gone down like a lead balloon with Channel 9, which has questioned the NRL over whether the coronavirus pandemic represents an Act of God disaster.

The contractual clash of beliefs could be one reason behind Channel 9's savage attack on the NRL on Friday, accusing the governing body of mismanaging millions over the past decade - including a $50 million loan from the free-to-air giant.

Channel 9's current broadcast deal with the NRL, worth an estimated $125 million annually, expires at the end of 2022.

The NRL could have been culpable legally for suspending the competition. AAP Image/Darren England.
The NRL could have been culpable legally for suspending the competition. AAP Image/Darren England.

By enacting the Force Majeure, the NRL has the ability to seek a renegotiation of contracts this season in good faith, with protection for future terms that had been agreed upon when the deal was initially signed.

Contacted by News Corp on Friday, an NRL spokesman said: "We are working closely with all partners to resume the Telstra Premiership and comply with our agreements."

ARL Commission chairman Peter V'landys said he would meet with Channel 9 bosses in the next week after the NRL were accused of failing to consult the network on their May 28 relaunch plans.

"We will have talks and we will engage them in what we are trying to do," he said.

There are fears Channel 9 could walk away from rugby league after a stinging broadside that could herald the demise of besieged NRL CEO Todd Greenberg.

"At Nine we had hoped to work with the NRL on a solution to the issues facing rugby league in 2020, brought on so starkly by COVID-19," the Nine statement said on Thursday.

"But this health crisis in our community has highlighted the mismanagement of the code over many years. Nine has invested hundreds of millions in this game over decades and we now find they have profoundly wasted those funds with very little to fall back on to support the clubs, the players and supporters.

"In the past the NRL have had problems and we've bailed them out many times including a $50m loan to support clubs when the last contract was signed.

"It would now appear that much of that has been squandered by a bloated head office completely ignoring the needs of the clubs, players and supporters."

Originally published as 'Act of God' ramps up NRL-Nine blood feud