Should NRL clubs be rewarded when it comes to retaining players that they have developed?
It’s a topic that’s raised every year, and no matter how often it’s been discussed, the answer has never been found.
Penrith is currently the poster child for development clubs. Although not all of their grand final team came through their junior pathways, only Api Koroisau had a significant NRL career before arriving for his second stint at the Panthers.
Over the last two seasons Penrith have lost key players due to salary cap pressure. Is that fair, considering the time and expense they invested in developing said players?
The NRL offers cap dispensation that rewards the long term servants at clubs. That’s fine, but it mostly applies to players heading into the twilight of their career, rather than in their prime.
It’s also been suggested that some sort of allowance be implemented for locally produced products. However, club boundaries are intrinsically unfair. In Sydney, they are rooted in history and extremely dated demographics. As such, boundaries are unfair to clubs who don’t enjoy huge junior leagues as their pathways, and they are unfair on the clubs that do have large nurseries and have to sustain massive budgets in keeping those leagues healthy.
Nominal values have been considered as a way of truly valuing a player’s worth, but those that rate players according to representative honours or NRL experience do little to assist a club looking to retain their players. Basically, they keep upper end prices at their peak.
I’ve been considering another method of attaching a nominal value to a player, and it’s one that would allow the NRL to list salaries and demonstrate the value added by a club.
I’m naming my system the “Value Added Contract” or VAC. Any contract designated as a VAC would attract a nominal salary cap figure distinct from the actual contract money paid to the player.
Bear with me, because this idea is very much at the embryonic stage.
I regard it as rewarding talent identification.
Every club should be a development club. Young players and “value” players are brought into the bottom end of the top 30 every season. If they prove to be absolute gems, the club that discovers them deserves to be rewarded rather than punished.
The VAC only applies to retention contracts. For recruitment contracts a player would be listed at the full value of the deal which attracts them to a particular club.
The Value Added Contract Formula
The value of a player’s first full NRL contract with a specific club (not including development contracts) is called A.
The value of the new deal being offered at the same club is called B.
The VAC salary cap nominal value is the average of A and B.
Therefore, if a player begins their NRL career at a club on a deal worth $200K, and their next upgraded deal is $400K, then their VAC nominal value is $300K.
If the player becomes elite and at some point reaches the $1m contract mark, then the rewards can be justly significant for the developing club. At the $1m mark, the VAC nominal value becomes $600K, a considerable discount on the one million dollars paid to the player.
The flaw in the “Value Added Contract” lies in the advantage it gives to an ultra successful development club such as the Panthers. In essence it can be seen as working against the salary cap, rather than alongside it.
However, adjustments could be made to the to keep a “fair” marketplace.
Perhaps the best way of introducing the VAC is to limit its application to a specific number of contracts in any given year.
For example, a club could have a maximum of three players on a VAC in a season. The interest could then be which contracts are declared VACs as a club might decide to move them around according to their roster or cap situation.
Furthermore, there are alternatives to using a formula involving averages. The nominal value could be set at a percentage of the increase in the contract.
Setting that at 75% and using the $400K example from above, only $150K of the contract increase of $200K would need to be accounted for in the cap. Therefore, the VAC nominal contract value would $350K. Using the same percentage method for the $1m example, the VAC nominal value would be $800K.
Whether the player is a local product, or someone recruited on an NRL base rate contract, the reward is based on the same principle. If a club adds value to the player’s worth, then they are the ones that should reap the benefit.
An advantage of the VAC is that it rewards astute recruitment. It’s not unusual for a player’s worth to jump markedly following their move to another club. This value added should not be to the detriment of the new club. Likewise the player should not be expected to forego their opportunity to maximise earnings due to a sense of gratitude.
Let’s use Parra’s experience with Isaiah Papali’i as an example.
Ice arrived at Parra on a deal reportedly worth $150K, and just two years later he is departing to the Tigers on a contract of around $600K. Under this system the Eels could match that Tigers offer but only have to account for $375k on the cap.
Papali’i would be receiving the same amount from either club and his choice would be based on where he wants to play.
Without question, this would mean that clubs anchored near the bottom of the table might find it harder to recruit their way to success. But, as a counterpoint, it could be argued that a struggling club charting a development course would have better longer term benefits than if they splashed the cash to pay above market price for certain recruits.
How would it benefit a struggling club? Using the example of the Wests Tigers maybe they wouldn’t have lost some of their players, like Tedesco, if they had that VAC advantage in the past. Also, stronger clubs looking to strip talent from mid to lower table clubs would have to pay significantly more.
Under the VAC system, strong clubs who previously claim that elite players are still attracted to them even on lower salaries might be forced to pay market rates to outbid the incumbent club.
Would this system allow strong development clubs to warehouse players?
I believe that it might only occur in a very limited way. Ultimately, players don’t want to run around in NSW Cup or in non-preferred positions.
Would Matt Burton have left Penrith if they were close to matching the Bulldogs offer? Would he have been happy to continue playing at centre rather than in the halves? Only he could answer that, but he has very quickly extended his deal at Canterbury.
Likewise J’Maine Hopgood. Has he departed Penrith due to contract money or the opportunity to play regular first grade football?
If players and clubs are unhappy with the current salary cap rules, then some system for changing it has to be found. Would a system that rewards talent identification and developing players be any more biased than a system which sees many of the same clubs anchored to the bottom half of the table every year, with spending sprees regarded as the only valid path to change it?
Perhaps the Value Added Contract could be a discussion starting point.