“We’ve always agreed that the salary cap was meant to be put in place to provide an equal competition, but if these things continue to happen, and it shows that they have happened a number of times over the last decade and more, then is it in the best interests of the game?”
– Clint Newton, head of the Rugby League Players Association.
This morning Forty and I briefly discussed the idea of a changed salary cap model. On the back of the recent week from hell, this is no doubt a conversation many of you have had and a discussion many media outlets will pursue in the coming days and weeks. For starters, it could be pretty easily argued that the current cap the NRL has in place is not working for several reasons. These include:
- The current cap promotes and encourages insidious behaviour. As Wayne Bennett was recently quoted at the Coach’s Conference saying the current system “makes honest men cheat”. To clarify, Bennett is the head coach of the Brisbane Broncos, the club most likely to benefit from the current TPAs benefit oriented cap. Obviously the current Parramatta Eels, but also Bulldogs in 2002, the Storm in 2010, and to a lesser extent the Warriors and the Titans and now unceremoniously have all either accidentally or deliberately breached the cap, and have done so out of a desire to compete with an opposition many of these clubs perceived were doing the same.
- The current cap does not equalise the competition. Despite people continually barking into media campaigns that this is the closest competition ever, I suggest those people try pick the score for a Broncos Knights matchup and let me know what score they come up with. If they’re still not convinced, those people might want to take a quick glance at some of the scorelines racked up this year alone. The talent competition is becoming more concentrated and the gap between good and teams is widening.
- The current cap is confusing. Earlier this year I did a ‘quick’ explanation of how the salary cap worked, which you can read here. I imagined a quick 500 word summary of the ins and outs of salary cap land, returning serve on a few of the FAQs. One part quickly turned to three, which then turned to a massive four part investigation, just trying to merely simplify the NRL’s salary cap – it is simply too difficult for the average punter to understand.
- The current cap is too mysterious. To be honest, I don’t need to know how much Player X makes, that’s none of my business as a fan, and to boot, I actually don’t care. What is my business however is how much of my team’s allowance is that player taking up, that is important to my team’s success. I want to query that player’s value contrasted with their position within my team. I want to critique their contribution – that’s what being a fan is all about – to cheer our team’s success and then pretend to wear BA’s hat to make decisions on the best way forward when times get tough. I cannot do that with the current system because unless I am incredibly well informed (see: boy, sixties) I have only rumour and shadow to rely on.
What if there were a cap system that was clear, transparent, evened the competition and even allowed players to make as much money from their clubs as they wanted to?
Looking through the lens of the four criteria above, I wanted to try briefly detail a few models I’ve caught wind of below, with their ins and outs.
1. Points Based Cap
A number (say 1-10) is applied to players depending on their ability, experience, representative history, demand and prospects (more on this in a second), irrespective of their salary. This number stays constant throughout the length of their contract, and is established in the early rounds of the season prior to their contract expiring. There are effectively two ways this system could function (hereafter Model A & Model B) – but in each model there’s effectively two figures attached to a player, their salary and their value number. In Model A – their salary would have no bearing on a team’s ability to keep them, that is a negotiation for the player (their manager) and the club. In Model B – each player’s salary would be dependent on their number and would be set based on what number they were given. Seeing that the NRL currently effectively funds player salaries in their team funding allocation, surely an affordable collective figure could be reached (the current salary cap figure of $6.7 million for example, when you include the marquee player allowance).
More importantly from a cap perspective, however, is the player’s value number. A team would only be able to have a certain collective value of the players on their team, regardless of their collective salaries. Importantly under such a system players would not be limited in their ability to make money, and there’s no great interest in the public wanting or needing to know player salaries, either.
In addition, there is the potential in Model B for a player’s salary to stay set, but their player’s value number be reduced if said player was, for example, a long serving player, a team junior or someone who debuted with that club. As such a team and the player would be rewarded for fostering and developing talent, which in turn would create positive pressure on club’s developing players in the future.
Finally this system is impossible to cheat. If a player is dubbed a certain value, his NRL salary is set and a team cannot change that until the NRL does when said player’s contract expires. Once their salary is allocated, a player is then free to make as much money as they can on top of that salary, and their ability to make more or less money does not disadvantage other teams as their value is already set by the NRL.
However, obviously the greatest concern with either model in this cap system is settling on a method of appropriately allocating player value numbers – such factors that would need to be taken into account are – games played, position played, demand for said player, representative honours and ability. It could be easy to implement a model where for example Ryan Matterson, after his debut for City on the weekend, could be worth the same or more than Corey Norman, who is yet to taste representative honours. Furthermore, clubs wouldn’t want to pay more for Peter Wallace (experienced, but ageing) than Ash Taylor (outstanding future talent). This is the great weakness of this system, however I believe an appropriate formula could be found.
Advantages: Clear, transparent, allows players to make as much as they can, basically impossible to cheat.
Disadvantages: Potential subjectivity of formula that determines player value and subsequently their salary.
2. The Soft Cap – written by Forty20
The model is effectively the model used by the NBA and Major League Baseball, and is in contrast to the NRL, where a hard cap is applied. The NBA (our primary example in this instance) and MLB employ soft caps that allow teams the ability to exceed the accepted salary cap limit primarily in order to retain storied club players and as a result keep fans invested in each franchise. In spite of that noble intention, it also allows a franchise to recruit externally over the cap limit.
In the NBA teams that exceed the designated soft cap limit are then taxed under a ‘luxury tax’ on a sliding scale for each dollar they spend beyond the soft cap. The proceeds from the ‘luxury tax’ are then divvied up between the league and potentially any franchises that are operating underneath the soft cap.
The theory behind the ‘luxury tax’ is that while it allows big market teams to build powerful rosters and thus strong fandoms, it prevents them from freezing out smaller franchises by making them pay a premium for exceeding the cap. The ‘luxury tax’ revenue stream for cap-compliant franchises is relatively paltry, varying from US$830,000 to US$3,033,000 in in the last 4 years.
Cheating the cap becomes a concern only in the sense that a franchise might try to dodge the ‘luxury tax’.
In practice the NBA has seen a reasonable diversity in champions over the recent years. From 2004, or rather, over the last 12 years there have been 7 different champions crowned (Detroit, San Antonio, Boston, Los Angeles, Dallas, Miami, Golden State). However, in the same period only THREE more franchises (Cleveland, Orlando, Oklahoma) have actually made the championship series. While not as incestuous as the English Premier League, the soft cap certainly lends itself towards a handful of teams dominating the title picture.
Advantages: Similar to our similar model, teams given leeway to spend big if need be.
Disadvantages: Doesn’t necessarily even the competition, despite its redistributive measures. History has shown the powerhouse clubs still stay at the top of the pile.
3. The Hard Cap with Draft Picks – written by Forty 20
The draft is one of core tenants in American sport. American football, baseball, basketball and ice hockey all employ drafts – albeit in slightly different manner. Of interest in this example is the NFL, who have a sub-draft system at play designated with the term ‘compensatory picks’.
One of the most common sentiments among rugby league fans is the frustration of seeing one of the premier franchises swoop in and pluck the best talent out of other clubs. Fans are left disenfranchised and bitter that there is no compensation for all the effort their club put into developing the lost talent.
Compensatory draft picks exist in surplus to the fixed amount of annual draft picks available to each franchise and are awarded to the franchises that lost the highest paid players in a given year to free agency. Compensatory draft picks are a bit more complex than just the above as they are weighted on the actions of each franchise in free agency but are their core they provide franchises that develop talent a means of recouping their potential loss.
Much like with the NBA, player salaries are publically available in the NFL – which lets every franchise know where their competition stands between squad composition and cap expenditure.
Cap cheating in the NFL is nowhere near as prevalent as in the NRL, be it through a lack of effort from the NFL to investigate the manner or the mechanisms like public salaries and compensatory picks at play. One benefit of the draft system in regards to salary cap cheating is that it becomes a great deal simpler to punish any team caught cheating with the loss of draft picks. The powerhouse franchises in the NFL know that the draft, and by extension astute drafting, is their key to prolonging championship windows so the loss of draft picks is a heavy threat that has greater long-term ramification than fines and loss of competition points.
Advantages: Effectively limits cheating of the cap and evens the competition further through compensatory draft picks.
Disadvantages: Requires a rookie draft system, might precipitate teams tanking a season in order to accrue valuable draft picks.
Thanks to Forty for his obviously significant addition to the examples above. Yes, there are other cap systems out there than those listed above, but here’s a start.
Although this is a discussion for another time, I just want to add that in order to limit future questions posed of the murky world of TPAs, I’m also in favour of any sort of model that means all TPAs flow through the NRL.
In fact, let’s go full Bernie Gurr:
“The NRL should be a clearing house for all contracts and third-party agreements, so if a club negotiates a contract and a manager negotiates a TPA, both of those are lodged with the league. The player and manager would sign a stat dec saying the only money the player got was the money that was with the contract and TPA lodged with the NRL .. That’s bringing added accountability to the player because they then have to say ‘all the money I’ve got has come via the NRL’.”
– Bernie Gurr, future global President, Sterlo’s pick for the Eels CEO position
Over to you – tell us about some other models, or give us your thoughts on those listed above.
– Mitch.
Guys. as usual well constructed & rolled out.
As I have looked at the so called salary cap, there is so much other issues that I believe surround it & makes it so hard to both get the head around it but offer up alternatives, the problem as I see it is how the game has changed in so many ways from the older days when I was a boy, & why people actually played the game, what conditions there were under & what they were paid, even before the great new world that was brought in with the contracts being made based on win – lose – draw payments on top of sign on fees.
One of the things that I am very much bemused about in it all is that on one hand the NRL & so many of the clubs are saying on one hand that the game just does not have enough players to expand the competition, then says it wants to expand, then says there is a need to widen the game into the bush & regions, & interstate. To me its a fairly contradictory trio of dog chasing tail. How long since the last teams were promoted to the NRL? & how many teams since then have gone backwards? Consider also the amount of players who ran out in the many competitions that ran not just in Sydney, but in regional NSW without considering QLD & the other states.
Early in the 70’s the then RLW for many years to come, (haven’t read one let alone purchased one in years now) had in the large newspaper spread a double page that had the previous weeks scorecards of all the games, in each stated including any district/group competitions, there was also good reports from the regions, even Albury had two RL teams, how many today? The overall scope & size of the game of RL is at what crossroad? Is it just to do with the cap or other balancing issues as well?
Combine these questions & answers into how many players are actually playing RL these days? Sydney is now reduced to 9 teams, of those 2 are merged from 3 Sydney based teams. Gone are Newtown, Balmain, & Norths. In some ways they exist but playing in lower comps with very much reduced numbers of players. Several of the surviving Sydney clubs have a very small local league or junior competition, there is also a virtually non existent 2nd division competition, we may have the remnants of that competition now propped up by out of Sydney teams to have a 12 team competition but look at those now gone, I can name 3 off the top of my head who were quite strong.
On top of those clubs that are gone, we also have a much constricted Junior league competition as it too has reduced teams both in numbers wise but also in the actual competition itself. The so called top comp, being the NRL only has one affective game in the senior league each weekend. Sure we have the Holden cup but that was the old Presidents cup, the NRL & its predecessors knocked two playing squads out of each of the weekend rounds. Looking over the whole situation, how many playing positions have been lost over the years? We may cry out that its too expensive to return those comps, but how many ancillary staff numbers are on each of the clubs payrolls? Every staff member adds costs to the overheads & reduces the amount of money available for the on field employees.
I guess if you have got this far in reading you are wondering what my thoughts re the cap etc is in this.
Looking over the way things are, the NRL has a controlled operation where each club has to have a top tier of players of 25, they are on a ranging amount of money with wide ranging variations but there is a minimum wage for each of the 25 of $85000.00 as I understand it, but how many are actually on that figure? Those on the 2nd tier are likely on less than that but probably not much less really as they have to train very much like the top liners. The 2nd tier players also play for their so called feeder club, meaning its likely that club has essentially access to a full team that is NRL standard or close to it, other words they are essentially the old 2nd division.
The old 3 division comp had 39 players playing each week, plus reserves for the lower 2 grades owing to the progression if they go up a grade, plus to cover injuries. Old days had 2 replacements but only for injuries & once on they stayed on. The replacements for 1st grade had to have at least played a full first half in the respective grade under the grade they were playing in. If they came on as a replacement they also received a bonus payment based on the higher grades win – lose – draw amount. It was so stupidly simple. Clubs controlled the money & players got paid what they were deemed to be worth.
The current system where there is so much regulation, laws & by laws of what you can or can’t do is nuts, but so is the fact that clubs likely have to have such a credentialed list of full time staff meaning full time wages & set conditions they probably cost the clubs more than the playing roster, in the eels case we have 37 players listed in the main profile page, some have not played in a top game so if we are looking for answers, how can we find it in that sort of system. I notice the pages of all the clubs seem to have a set program/interface to them with most seemingly only showing the top 25 or the NRL players. Something that all clubs should have for a uniform system.
How to even out the existing cap & players can be as easy or as complicated as its wanted or needed to be. There needs to be the normal or set contract between Club & player. Each club would sign players to their roster based on what they see are worth. Thus the existing caps need to only be a simple contract that is between the club & player, the original of which is signed by the player, his manager, the club & the NRL, the NRL keeps the original with club, player & manager keeping a photocopy of it. It needs to be basic but also could have clauses that would include any other payments also on it. Marqee allowance, TPA’s etc. again the copies are in each others hands.
TPA’s, can only arranged & guaranteed by the company offering it. The clubs need only to provide a list of companies, or individuals who are prepared to offer a TPA to the player to each agent & to the NRL. If needed to sign such TPA, a separate document could be also signed by the player, company rep, & players agent, then registered with the NRL. The club does not need nor should have a copy.
Companies or individuals who want to provide TPA’s should notify the NRL of their ongoing commitment, after any agreement has been arranged. Once they have spent all they want to spend then there name is to be removed or asterisked on the NRL database of club TPA sponsors.
TPA sponsors should be allowed a set number of free tickets to the clubs matches.
I do believe that it can be hugely simplified & made legally water tight, thing is that the clubs should only be held responsible for the players primary contract & payment/wages, they can act as a means to provide a database list of companies who are prepared to enter into such agreements. The other thin is this, the NRL can also set up a WAN that links its headquarters & the clubs to a single server that is under the control of the NRL cap monitor. For any legal contract & other allowable payments, they can be electronically dealt with, at the club level & sent on the WAN to NRL for endorsement, once ticked off by the NRL its then binding.
A WAN can be set up so that only the NRL has access to each clubs contract computer & is not accessible to any other club.
All of this is meant to make sure all that is legally needed is legally carried out.
As for the actual player payments under contracts, whatever the NRL sets up as a cap for each club, there could & should be allowances made for players who are long time players at a club, allowance for a player who has come through that clubs junior network.
I see it if a club brings down someone from the bush, & using our own Sterlo as the example. He played for the club through the period of the 13 import rule, as such he was always an import, yet played junior football for a local school came into the club, & then stayed as a one club player – for how many years. To me he is a local even though the club brought him up from Wagga Wagga. I saw merit in that system & still do, but with the likes of players such as Sterlo, I believe once he signed his second deal with the club, there should have been an allowance for that as he has stuck solid with the club.
For each extension he should be able to provide extra allowances at each point, the fact he was brought from the bush & stayed also needed to be provided with some form of payment bonuse.
That sort of system needs to be introduced into the current market for players. Call it a loyalty payment or similar, something that has meaning & something that players would be proud of in what is really a game that rarely provides anything for loyalty.
There are simple ways as I said to fix the cap, & reality is that the simpler it is the easier & harder to rort. The more complicated it becomes with so many clauses – extended rules & conditions makes it harder, & means more time is spent on how to get around it.
Lastly
Bring on Bernie Gurr ASAP.
I was never a fan of the points system. Because as you pointed out Matterson could effectively cost more than Norman based on rep duties but then that would be negated by Norman’s experience. But I think it is the way to go.
I don’t have any faith in the NRL to come up with the correct way of doing it and no doubt it will end up helping the Broncos.
Fella’s just rough nutted the following
Currently clubs are allowed 25 tier one players, each week 18 are required for the top side. 4 interchange & 1 reserve for late injury in warm up, this player if not needed is required to sit out the whole game for & doing nothing. Feeder clubs are required to also have 4 bench players not sure about an 18th man that means at least 36 players are required for those 2 grades 11 above the top tier.
Only other area of requirements is with the NYC cup, which also has 17 selected but others on the side show bench. All in all there is 53 players needed for 3 teams over the 3 given competitions. So lets deem them 1st, 2nd, 3rd grades, which is basically the old system. Problem with the present set up is that the 2nds basically only play park football in front of fairly average crowds, & unless they play on a separate day to the 1 & 3 the head coach has to go to other locations if he wants to keep tabs on them for his own personal knowledge. The current set up does save costs as it does not have the 2nds having to travel & accommodate so many players, therefore would be hard to bring in for most clubs especially with the distances & costs.
However, if the game is to truly expand that is something the NRL will have to look at for the future, if all travelled then at least 2 buses would be required unless some subsidised air travel was available, assuming that can happen then here’s what can be considered.
56 players are needed by each club, as the 3rds are really junior games & many players who do not show development skills generally end up being dropped & replaced by others after the junior comps are completed, I would suggest the Junior comp runs at the same time as the normal RL season, & run over 12 games, this allows for the players to really show their wears & to be seriously looked at over an extended period. It would also allow the club to refresh the 3rds at the end of the comp with new faces as used to be the case. 3rds are affectively trials for advancement.
A new structure of contracts would be the same as now 25 players in the 1st playing squad with along with 17 in the 2nd & 3rds. Both sides would however have to have 2 addition
In my previous post I suggested that there is need to do something about what I will call loyalty payments, a player who has come through the system & deemed a local product should be entitled to an amount to be determined outside of the normal contract from the start of his first contract with the club he came up through, following the first contract, & he resigns with his home club he is eligible for an additional sum outside the normal contract, & so it goes on until he retires or goes elsewhere.
Players from the bush or other clubs would not be eligible for any extra’s in their first year, but would be if they continued at the same club with a renewed contract.
Should they leave the club, & come back at a later time, then no initial loyalty payment would be provided for again. Basically this is something that will allow for a club to keep someone for life as a sign of their loyalty to the club while he stays. Current examples would be Tim Mannah, likewise for Corey Norman if he resigns.
The initial contract should be for at least a 3 year term, & same for extensions, that would prevent some areas of rorting.
There is a need to cover players for concussion during the game. When the teams are announced 1-17, 2 further players should be on the bench to cover for the loss of a player through concussion. This would be a perfect opportunity to reintroduce a system that used to be in force for replacements. (Bearing in mind I am suggesting 3 games are played on each game day) 2 players, 1 back & 1 forward that has played at least a full half of continual game time in the previous match are to be picked on the reserve bench for the immediate grade above to act as a permanent concussion player replacement.
The 3rds comp would use 2 fresh players, 1 back, 1 forward for the 3rd grade. 2nds for 1st etc
Should the reserve player be used as replacement then he would receive an additional sum equal in pay structure for the player he replaced. This only applies when the concussed player is unable to return to the field.
Inbuilt into these rates are acceptable bonus payments to ensure there is fair competition as well as incentives for up & coming players, also most of all loyalty to their club.
All contracts, & bonuses are recorded on a central WAN computer link to the NRL headquarters. Only available to the respective affected club through built in security, both the club & NRL should have monetary databases of business capacity that automatically updates all figures of payments made to players, acknowledged by the NRL at each entry. Both NRL & Club is able to see exactly where they are standing in regard to all player payments. Any transaction or entry by either the NRL or club into the database should be flagged alerting either side to a new input or enquiry.
Any agent that is caught trying to get around future contracts in order to entice them away or enter into any form of illegal payments will be immediately deregistered.
Each part of the contract monies that can be paid to a player, needs to be worked out between NRL, Clubs & the RL Players association.
I am not going to even suggest what sort of numbers we are looking at but, I think there is enough in this to ensure any new system can be as fool prove as possible.
I think that a system based on Points and a nominal salary would be a better system than we currently have. The point system would be objective based on set point values for experience including rep football. The nominal salary would be more subjective decided by the NRL valuing each and every player.
Under this system teams would not be permitted to exceed their points total or their nominal salary cap to sign players. They may well exceed these limits thru the term of the players contracts however they would not be able to further their recruitment again until such time as they are back under the cap (points and salary) as is the case now.
On Friday the Broncos had 8 players playing in the Anzac test. The Eels had 1. This is not an even playing field. In Rnd 9 the Broncos and the Cowboys put teams on the park with roughly 1,700 games of experience each. The Tigers could only manage 1,000 players and the Knights 854 players. In Rnd 9 the top 4 teams averaged 1608 games of experience and the bottom 4 teams averaged 1229 games of experience. This is not an even playing field.
When assessing the points system Representative games should only mean SOO or internationals involving Australia, NZ and England. City Country games should not be included given that there is no equivalent game in Qld. Of course this would encourage Pacific Islander players to bypass the rep games. Oh wait, that will help the Pacific Island international teams emerge with stronger teams, not so bad.
Experience is important and this would need to be considered carefully. For instance a player with 250 games is good for experience but at what point does he become a liability thru Injury and loss of speed. It would help solve the problem in many ways of the top 25 that needs to be a top 30 as a minimum. Also less experienced backs, Semi, for example can still be a real asset whereas forwards really need that experience to be effective. Corey Parker has probably played his best football over the last 2 seasons, 300 games now.
There also needs to be a way to reward clubs who spend money developing players and also long serving players at clubs. There is a lot of work required to make a system like this to work but given a point system and a nominal salary cap I think that there is a good basis for this modification.
The uneven nature of the comp with the salary issue is why some players are more than prepared to go to a strong club on unders, as they can pick up good TPA’s, along with the element of rep bonuses if they get picked to represent, with a strong club they have a better chance.
Take Roberts as example from the Titans, he takes less to go to the Broncs then coming to Sydney. He is open to great TPA’s in a one club town.
He has now played International football, & will play SOO, payments that are cap exempt, & the more he is selected the more he makes & the more he can get in outside deals, even legal ones.
The is a real need somewhere in it all, that points need to be looked at, based on several areas, which can also make things complicated & hard to police. We cannot put a rep payment into the cap, but imagine what most of the broncs players are actually on, if they were all added up, that is if, we could find out the exact amounts, but would think even without the exact amounts would still be a hefty sum.
Col if you look at he situation with Lachlan Coote. It has been widely reported that he was offered $2.8 million to go to the Roosters for four years. He chose to take $1 Mil to stay at the Cowboys for 2 years. Roosters could have gotten him as many TPA’s as the Cowboys. He would have been so much better off financially than the reported deal he accepted at the Cowboys it is not funny.
No one in their right mind would do that especially since he comes from Sydney and most likely has family in Sydney also. He came out this week urging other Cowboy players to take a salary hit like him to keep the GF team together. This is just blowing smoke at the mirrors a lot like the Manly players supposedly taking unders to keep their GF winnig team together.
The man in charge of doing the audit on the TPA’s says nothing to see here. Accepts that there needs to be some tinkering to make it a little simpler with less paperwork but otherwise it s fine. He says that the teams have never been more even and no team has won 2 GF’s in a row since the early 90’s.
What he did not say was that since the rules around TPA’s were altered in 2011 to simplify the TPA system, the Roosters have won 3 minor premierships and 1 GF. The same teams are anchored to the bottom of the table and all of the quality rep players are at a few clubs.
The NRL has no intention of altering the TPA’s and the strong clubs will get stronger whilst the rest suffer despite the NRL claiming that the talent has never been more evenly spread.
John
You are totally right in this, but the problem really is that how many of the clubs really want to see reform?. That really is the bottom line in this whole debate. The NRL are happy the way it is, as they can get a level of leveraged control over all the clubs, they are slowly, but speeding the process up with wanting all the clubs to sign new agreements with the NRL commencing next year. The NRL sponsored clubs are already on board, while the others not yet. If they get their way the game will be under full dictatorial governing by the NRL head office, with Skull in control.
I am starting to actually think the way things are heading that while there has been denials, a new potential split is becoming a bit more likely than it was.
Some of the best comments I’ve read here. Superb wrote up Miatch. I don’t have my answer yet but points seems open and fair. Great read Miatch.
Bernie Gurr…Sterlo is v shrewd.