Last week, News Corp reported that the NRL was in negotiations with the RLPA to reduce full time NRL squads to 26 players in 2021, with the number of development contracted players also likely to be cut. It’s a move that’s been mooted for some time, so it didn’t make too many headlines.
Nonetheless, this is a significant step for the game and one that should not pass without examination.
With the process currently in the negotiation phase, it’s likely that the outcome will not be as severe as suggested, and will probably see NRL clubs working with 28 NRL players and 4 development contracted players next season.
Naturally, the goal with any player cuts will be a reduction in costs. Therefore, the salary cap is tipped to be trimmed by between five to ten percent. After the parlous state of the code’s finances was exposed this season, it was obvious that the game needed to rein in expenses. Accordingly, removing the salary of two players per club is a much easier process than asking all players to renegotiate their contracts.
Where will such a change take the NRL?
Every year, players are pushed out of rosters via recruitment and internal upgrades. Coming into 2021, this number will swell as at least 32 players boasting NRL experience, and a further 32 from development lists, will be left looking for a new home.
At the end of this season, somewhere in the vicinity of 120 NRL players will be off contract. Clubs such as the Raiders, Titans, Sea Eagles, Cowboys, Panthers, Dragons and Roosters have the fewest players at the end of their current deals, each listing six players currently unsigned. The Eels, Warriors and the Storm have the most, at 10, 12 and 13 respectively.
Logic would dictate that the cuts will be met by clubs not re-signing players on their off-contract list. But will contract status be the only determining factor?
Should the salary cap be cut by up to 10 percent, some rosters may require a stronger review. And clubs with fewer players off contract might need to enter into unexpected negotiations with contracted players – most likely expedited before they begin talks with any new recruits. After all, their previous planning would have been based on a 30 man roster, and a six player, development contract list.
Of course, the unknown will involve the decisions regarding planned internal upgrades of young players, many of whom usually transition into the lower (read lower salary) end of the top 30. Simply cutting such players impacts the future planning usually associated with such individuals and probably does not address the required cut in the salary cap.
In all likelihood, this all adds up to an unprecedented number of experienced and/or talented players hitting the open market.
The result? In any market, the oversupply of goods and services coupled with a fall in disposable income pushes prices down.
Potentially, an influx of experienced players and a reduction in available roster places could see a fall in player salaries.
Previously, debate about the standard of the NRL usually focussed on inflated salaries and the dearth of quality players. In economic terms this is classic inflation – too much money chasing too few goods.
Consequently, this action by the NRL might facilitate a change in both the prices and the power base within the player market. Previously, player agents have held some clubs to ransom. Clubs had to spend their cap and experienced players were in demand. Those days could be numbered, and given recent actions taken against agents, it’s unlikely that any move which diminishes their influence will prove unpopular with punters.
Some agents will be competing to obtain any contract for their clients, as opposed to the best contract. The Super League option has been impacted as British clubs struggle through the financial consequences of the COVID-19 pandemic. NRL clubs with strong rosters and well managed salary caps will be in a position to dictate terms to agents. Even struggling clubs who might normally be expected to pay above market price for average players will be in a better position during negotiations.
The domino effect might prove to be just as interesting, as players are forced to accept second tier contracts to continue their rugby league ambitions.
This scenario should see the standard of the Canterbury Cup and Intrust Super Cup competitions raised as talented youngsters and NRL quality players are forced to ply their trade under contract to clubs at that level. Additionally, this influx at the second tier could result in players at every tier squeezed into the level below, with the Ron Massey Cup, Sydney Shield and other semi-professional and community competitions benefiting.
With fewer development contract spots available, clubs with strong pathways will possibly make the decision to fast track younger players into their top 30. Given that the lower roster spots are often occupied by players who spend much of the season playing second tier rugby league, and development contract players are either playing alongside them or in Jersey Flegg and on similar money, it makes financial sense that the top two development players would now be contracted in the top squad. After all, such players are usually the best of the pathways players.
If clubs decide to allocate a couple of NRL roster places to fast tracked pathways graduates, the value of development systems will be raised. This can only be beneficial for the game.
Personally, I’m looking forward to the implementation of a reduced roster. In the macro picture, this change could prove to be one of the most astute decisions made by the NRL, with implications that extend well beyond simple cost cutting.
If the result is a football world where agents wield less power, the clubs have greater control in shaping their destiny, and investment in developing players is rewarded, then it’s a step which should be applauded.
Credit to NRL, Eels media and NSWRL for images used.