The NRL Salary Cap – next to referees and their decisions, it’s possibly the most contentious topic in footy circles. Understandably so, because this magical number impacts every single club. Following the sudden surge in player signings and the resultant media interest, many supporters are rightly becoming concerned about the 2018 Salary Cap. With so much uncertainty, it’s a subject worthy of “The Spotlight” this week.
When the Salary Cap was first introduced in 1990 by the NSWRL, it had a variable cap of between $800K and $1.5m. The range was due to the circumstances of individual clubs. Since day 1, clubs have seen fit to push the boundaries of the cap through both legitimate and nefarious means. We’ve seen times of unlimited boundaries (see Super League) and likewise the Cap has arguably had periods of being unrealistically restrictive, causing some of the game’s elite to switch codes.
Why do we have a salary cap? To look at the rationale behind its existence, let’s go directly to NRL.com –
The NRL Salary Cap serves two functions:
1. It assists in “spreading the playing talent” so that a few better resourced clubs cannot simply out-bid other clubs for all of the best players. If a few clubs are able to spend unlimited funds it will reduce the attraction of games to fans, sponsors and media partners due to an uneven competition. Allowing clubs to spend an unlimited amount on players would drive some clubs out of the competition as they would struggle to match the prices wealthy clubs could afford to pay.
2. It ensures clubs are not put into a position where they are forced to spend more money than they can afford, in terms of player payments, just to be competitive.
In short, they want an even and sustainable competition.
It’s difficult to argue about the principle of a sustainable competition. The tribalism of rugby league is the very root of the code. Generations of supporters are created by clubs with long histories. Plenty of pain was endured around the Super League War and the NRL is not inclined to boot clubs out of existence or force amalgamations, especially when lucrative media deals are now at stake. Likewise, expansion is not sitting on the horizon and it’s arguable as to whether the depth of player talent would support new clubs.
Whether the NRL competition encourages a “spreading of talent” is debatable. Without opening a can of worms by tangentially exploring the TPA issue, you could argue that allowing such privately sourced earnings is counterproductive to the goals of the cap. In essence, some clubs are TPA wealthy whilst others are relative paupers.
However, let’s look at the immediate concerns for 2018.
The clubs have been informed that they are expected to adhere to a salary cap reported by the media to be $9.14m. Whereas this amount would have previously covered the top 25 players, from next season onwards it must cover the top 30 players at every roster.
Recently, via Twitter, TCT put the question about clubs’ adherence to the cap to NRL Media.
Though NRL Media did not confirm any specific dollar value, they made it abundantly clear that an amount has been communicated to the Clubs along with a directive about ensuring that they are compliant before next season. It appears that the question remains about the compliance process.
Herein lies the concern for many supporters.
Clubs who already boast a wealth of talent are not only re-signing currently rostered players on upgraded contracts, they are aggressively chasing and recruiting some of the NRL’s elite. This has been brought into the spotlight by a player market which recently went into an unprecedented early season frenzy. The size of some contracts even caused Origin player James Maloney to openly call upon his club to upgrade what he considers to be his own undervalued salary.
In a code where the value of player contracts are speculated rather than being transparently clear, it’s difficult to definitively point the finger at a particular club and accuse them of cheating the cap. However, one could still postulate about whether clubs who have recently splurged on high profile players are preparing to challenge the authority of the NRL? If so, on what basis could they take on the governing body and what outcome might fans expect?
Greenberg has recently received praise from club execs for his transparency about NRL spending. We now need a similar approach to the salary cap.
The most obvious grounds for any defence would lie in the NRL’s delay in defining a cap amount for 2018.
Surely it has not been best practise to be negotiating with both the clubs and RLPA deep into 2017. With players needing to sort out their livelihood, and clubs looking to finalise their rosters, it would appear as if a “sign now, work it out later” policy has been adopted by many parties. If so, the NRL may have painted itself into a corner with a showdown with relevant stakeholders on the cards.
If you have one club accused of significantly breaching Salary Cap regulations, it’s a long and difficult process to both prove and deliver consequences (See Bulldogs, Storm, Eels). If you have multiple clubs exceeding the Cap who (rightly?) apportion blame to the code’s governing body for delays in finalising a figure for them to work with, you could be dealing with a fallout with significant consequences for a competition locked into billion dollar media deals.
What would be the likely outcome if multiple clubs have exceeded this mooted $9.14m Salary Cap for 2018?
The worst possible outcome would be a soft cap or salary cap amnesty. In this instance, the NRL would “forgive” or allow a percentage over the cap for any offending club for the single season. This would be done with an acknowledgement that circumstances were unusual in the lead up to 2018, therefore clubs would be given a season to get their roster payments in order.
It’s not beyond the realms of possibility that such a scenario eventuates.
If you have the RLPA and the clubs united in their push for a higher Salary Cap, and there are several clubs faced with the prospect of shedding players on large contracts, operational issues come into play. The longer that clubs are allowed to continue to sign or re-sign players, the smaller the window to redress cap issues becomes. After all, the NRL does not allow salary reductions across a club’s roster as a means of rectifying a cap. What would happen if a bloc of contracted players refuse to accept being moved on? What if clubs refused to release players or can’t find another club for said players? It wouldn’t be a good look, especially if there was a threat to a season commencing on time.
Of course, another outcome would be everyone working within a $9.14 m cap next season. Should the NRL stand its ground and enforce the stated Salary Cap, and should the clubs and RLPA accept this, it will make for an interesting market place. How many clubs will be in a position to sign released players? Will former clubs have to pick up the portion of the players’ wages and if so, will it be possible to remedy problems at multiple clubs?
Just last year, the Eels were forced to release Nathan Peats. Their choice – “If you want to play for points, you need to shed players.” Fortunately the Titans had space in their cap. But what if they didn’t? Could a similar scenario be forced upon clubs in 2018?
Supporters are major stakeholders in the NRL, yet we remain in the dark about next season.
From this author’s perspective, the directive must remain as it is for every season.
“Your cap is $x. You must comply or face the consequences.”
Anything other than this is insulting to our intelligence and negates the very benefits which the Salary Cap is meant to provide.
This post has been full of questions. I wish I had the answers.
The sooner that we have clarity on this, the better.
Eels forever!
Sixties
There are significant doubts that the NRL under Greenburg will enforce a hard cap, what would be of interest is if this article was forwarded to Paul Kent and others for their response The fear that the recent spate of signings, extensions and recruitment by clubs that were supposed to be under pressure to adhere to the cap,this should ask too many questions for the NRL to ignore ( but no doubt they will) Still would be most interested if the administration would just publish the amount of registered TPAs for each club, just the total not for individuals .… Read more »
When they handed out the penalties to the Eels in 2016 for Cap breaches a lot was made about the next big challenge, the player managers and what part they played in the Eels demise and how it effected other NRL clubs, not just the Eels.
So far all we have heard is crickets
Sixties what a great read for a bye week. My understanding is that the players may start signing or negotiating in November 12 months prior to starting with a club in the Preseason. This means that the fact that the 2018 cap has still has not been locked down is a joke, it should have been signed off by November 2016. Here we are more than half the way thru the 2017 season and negotiations are still ongoing. Everyone has been critical of the way that the Tigers handled the resigning of the “Big Four” and to be fair it… Read more »
For me its simple,they took our nines and our points because we wernt cap compliant when we won these games so does that mean that the nrl will be checking that ALL clubs will be compliant from kick off and if not will be deducted any points accrued before they are , clubs get fined every season for being non cap compliant at seasons end some being over to the extent it secures 1 or 2 players more than should have so theoretically they achieved all season with an unfair advantage , do they deduct their points , nope they… Read more »
My feeling is the paint is wet and the corner getting closer. If, and this is the thing, if the eels as an example still have money in this years cap allowance for players, can sign a new player before june 30, on x amount that is higher on the pro rata for the remainder of this year and be essentially lower for next year and beyond, to comply with next years cap and beyond, how would that be seen? I have no qualms about all clubs being on equal amounts, but when it comes to extra’s such as TPA’s… Read more »
I honestly believe that the ONLY way to have any level of faith in the process is to make player salaries made public. It’s what happens in business at Executive level and these days that what the players are earning.
The NRL then makes players registration contingent on the supply of tax returns for cross reference purposes. It’s actually not that hard.
I hope that happens too Jon, though I doubt the players would like it!
I dont think players salarys are anyone elses business other than an official department in nrl that manages and regulates the system for all clubs , people have enough to say now about this guys not worth this much and so on without having a clue what thier talking about , no one sticks thier nose in what we earn its considered private and football players are entitled to same privacy ,eveyone shoots their big mouths of now about players being paid to much without knowing what they go through to earn it ,more than can be said about the… Read more »
Chika, I have to agree with on this and no one should have their earnings put out in the public arena, no different to ordinary workers as many of them in different positions get put down “not worth that money” among other things. It happens in many trade positions when wages are made public, Joe blog in bog industries earn $200000.00 last year, and too much for anyone in THAT industry, yet most who criticise as a result of the revelation would not do the job, and work under the conditions that many blue collar workers work to, just jealous… Read more »
Some very interesting points Sixties.This salary cap issue has been brewing for quite some time now, and I agree with Colin that the NRL are painting themselves into a corner. It would seem that some clubs are viewed differently to other clubs, ie would the supporters of Melbourne and Brisbane still support their clubs if they weren’t so successful? Supporters of Sydney clubs are rusted on and will support their team regardless, as we have certainly seen with all of them having mixed success over the past 10 years or so. One could argue that a high salary cap is… Read more »
I have a friend in Melbourne who is an AFL fan and follows the Western Bulldogs. He started watching NRL because of the Storm but is now an avid fan and follows the Bunnies. When I asked what it was about the NRL that attracted him he said it was because it is such a great TV spectacle. In his words it is a far better TV product than AFL. Further I go to all of the Eels home games and my eyesight is not the best anymore but I find myself watching on the big screen a lot so… Read more »
Everything is about money , the nrl will become stand alone games that will slowly turn into double headers wherever possible , less costs bigger crowds , it IS going to happen , those that dont have control of thier own stadiums including parra will not be allowed to hold more than 2 games per game day to protect grounds . Those that own thier grounds sharkies etc will have the advantage of being in charge of thier decisions re game day , whatever happened to sunday afternoon at the footy watching all 3 grades !
Hopefully we do play first and reserve grade on match days at Parra.