Hope you’ve enjoyed this quick look at the salary cap. Obviously with something so detailed and wide reaching, there’s no way I can cover it, even in an over extended, unnecessarily long 4 part series. Nonetheless, I hope you’ve had some of your questions answered. Speaking of which I’m going to finish this already lengthy look at the salary cap by attempting to answer some of the more specific questions raised by the first three parts –

Question 1 – What’s included when calculating a player’s salary?

What everyone thinks of when they think of a player’s salary is their playing fee – the money they get paid to turn up to training, attend functions etc and of course play during the regular season and finals fixtures. But other areas such as manager’s fees, accommodation (outside of playing related accommodation), cars, boats (see Storm, Melbourne), travel (Jarryd Hayne’s fun NRL career halting trip to Seattle, for example), and even those pesky manager’s fees.

Side note – As you would probably be aware some players have some or all of their playing fee calculated by how many games they are selected to play first grade in (there are several currently playing for the Eels by the way). What you might not realise is that a player’s value under the cap is calculated not on how many games they are playing in the current season, but how many games they played in the season before. So if a player played only two games last season, it would be wise to offer him a contract that includes both a base salary (say 400k) and match payments (50k each game played). The player would get paid the full amount, but the cap would only register the 2 games he played last season, irrespective of how many games he plays this season. So said player would cost you 50k x2, + his base salary of 400k = 500k).

Finally, in the same way, if a player plays in a representative fixture, such as say State of Origin, this payment is also taken into account as a bonus for that player, within the cap for the following year. Ie – I think SoO is about $20k, so if Jenko plays SoO again this season, we’ll get a 20k bonus in our cap next year (so we aren’t penalised further for having representative quality players in our team).

Second side note – To answer a question posed by your mate Todd, yes Tim Mannah does currently receive a long serving player discount. He’s getting paid more by us than is recognised by the cap, a good deal more. This is a very good thing for Parra and its cap. If the NRL wants to improve loyalty – surely they would just need to increase the value of these bonuses.

Question 2 – How do teams pay players outside the Top 25?

Well basically, there’s two other ways you can get paid if you’re not one of the Top 25 earning players on a roster.

1. The Second Tier Salary Cap (STSC)

Ah, this horrible bastard. One has the assume that the NRL thinks a team should be able to field a side for the season for $6.1 million (the Top 25 salary cap). I say this because why else would you bother having a secondary cap worth only $460k?

If injuries strike (say Kieran Foran), replacement players must be taken from either the Top 25, or the replacement player’s salary will be deducted from the Second Tier Cap. If a fit player is not available from the Top 25, and the STSC has been fully exhausted, a club must then get specific approval from the NRL for the inclusion of a suitable replacement. Every. Single. Week.

For a comparison, thanks to a significant pre-season injury toll, Parra exhausted this STSC amount by about Round 4 last season. My opinion in a nutshell is – both the Top 25 and the STSC need be significantly increased.

In case you missed that, if a team has exhausted its STSC, it’s likely that the NRL will say deny a team’s request to play a player outside the Top 25, if one inside the Top 25 can reasonably play that position.

2. You’re under 20 and therefore qualify for the Holden Cup

If an u/20s player is not already in the proper Top 25, clubs have $250k to spend on the 20 highest paid u/20s players. Every other u/20s player who play must fit under a specific Holden Cup STSC of $50k.

Basically, if you fall outside of those two/three categories, you’re not getting paid to play in the NRL.

Question 3 – What is meant by front ending or back ending contracts? Why would a team want to do this?

It’s pretty straightforward actually – because a team only has a limited cap to effectively fit in all their players in a certain year, sometimes it’s desirable to pay some players more of their salary in the later years of their contract, and less at the beginning. This is called back ending or a back ended contract. Back ending contract is usually indicative that a team is struggling to fit all their players in a certain year, and this tends to cause more trouble in later years.

For example, let’s say Peter Sterling comes out of retirement and we’ve agreed to pay him $2 million over four years. Instead of being able to pay him $500k a year for four years, our salary cap situation might mean we are only able to pay him $300k in the first two years, and therefore have to pay him 700k in each of his final two years. Now, the small caveat is that the salary cap might be raised in those final two years, but it doesn’t tend to work for teams, and these players are often released from their contract to play for another team (more on that below).

However the opposite, front ending contracts, is generally a good thing. It means that a team has space in its cap and can pay one of their players more in the earlier years, subsequently owing them less in later years. Parra has been able to do this for some of their players in each of the past two seasons.

Question 4 – If players have contracts, how can they be released to join a different team? 

The short answer is, they usually aren’t actually released from their contracts at all, it’s just that a different team is paying them the balance of that contract. Using our Peter Sterling example above, if for some reason Parra couldn’t afford to pay the last two seasons of his contract (700k x 2 years), they might try offload him and his contract to another team, in order to open up precious salary cap space. (Yes, of course Parra would never want to get rid of Peter Sterling).

In such a situation, (you know, the one you’ve seen a million times in the past few seasons) it would be ideal for Parra that another team agrees to pay all of the 700k in each of the two years Sterlo has left on his current deal. However, this is pretty unlikely. What is likely (assuming another team wants him at all), is that a team would agree to pay part of his deal (say 400k a season) and Parra would have to foot the rest of the bill (the remaining 300k a season). In this instance Parra is effectively paying a player 300k a season to play for another team. If you’d like about 40 examples of this in Parra’s recent history, have a look at some of the contracts with these guys’ signatures at the bottom.

Question 5 – How is the cap monitored?

A guy is permanently employed to monitor it – his position is called the Salary Cap Auditor. All NRL player contracts are lodged to his office, and each team’s position is constantly monitored. Additionally each CEO and Chairman of every club sign a stat dec at the beginning and end of each season in support of the club’s salary cap management.

The Salary Cap Auditor can also undertake his own investigations, ensuring that all is as has been reported. If not breach notices/fines may be handed down (sound familiar Eels fans?). In cases of widespread, systematic, deliberate breaches, competition points and/or Premierships may be stripped (sound familiar Storm and Dogs fans?).

Question 6 – How on earth does Brisbane do successful teams have so many good players?

The easiest answer is an extended use of TPP (see Part 1), which is completely legit, but in some ways not equally accessible by all clubs. If rumours are to be believed, some clubs would have TPP 50% above the salary cap (close to $3 million worth). In a competition where other clubs would only have $100k worth of TPP (through lack of opportunity, not lack of trying) it’s surely not the talent spread competition the salary cap aims for.

However money is not the sole factor players sign with certain teams. More complex reasons include such factors as the coach of the team, the location of the team (sorry Raiders fans), the potential for on-field success (sorry Titans fans), the potential of a player’s preferred position opening up, or the exposure of playing for a one team town (Broncos, anyone?).

In addition, because of such factors, some clubs need to spend more money to attract the same level of player.

Subsequently, it feels good to write such as article in 2016.

I don’t think I could have stomached writing this series in 2013 or 2014.

Nonetheless, that marks the end of this series. Thanks to Pou in particular for helping with the research and clarity aspects of this article.

Hope you’ve enjoyed reading. Feel free to let me know your thoughts below.

Go you Eels,

Mitch

Part 1

Part 2

Part 3

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