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With news this week that Brett Finch, Ryan Hoffman and Jeff Lima will be leaving Melbourne to play for Wigan in the English Superleague next year, only the most ardent and uncritical supporter of the salary cap will deny that “something” has to change.
Much has been written about the deficiencies of the current system.
One important point to understand is that the functioning and role of the salary cap as the main equalisation method in the NRL is unlike that in other football leagues such as the AFL and NFL, both of which contain a player draft.
While a draft system works by attempting to build up the weaker teams to the level of the stronger teams, a salary cap tends to go partly in the other direction by also bringing down the stronger teams in the process. However a draft is unlikely to fly in the NRL as it goes against the idea of district football, which has been a part of rugby league since it’s inception in this country.
So what is the answer?
Firstly, NRL administrators need to reconsider or dispense altogether with certain strongly held ideas about how the competition should be run.
1. Equal spending – The NRL believes all clubs should spend exactly (or very nearly) the same amount on player salaries each year. This rigid insistence on equal spending has led to an inflexible and unresponsive system.
The cap is by necessity set at the level dictated by the poorest clubs, which creates frustration and temptation for the more affluent. The NRL need to allow for some degree of difference in the wage bills of the clubs.
2. Premiership roundabout – The NRL believe that a good competition is one in which every team has a chance of winning the grand final each year.
Although an initially enticing idea, upon reflection is this really such a good thing? Because a competition in which last year’s wooden spooner is a contender for this year’s premiership must also be one in which last year’s premier may end up with the spoon this season. Is this lack of continuity from year to year really something to aspire to?
Where is the place for premiership dynasties of the past? The dominant eras that made the likes of St George and South Sydney the famous clubs they are today?
A better solution is for the NRL to introduce a luxury tax in place of the salary cap. A luxury tax would operate something like a “soft” salary cap. Clubs would be allowed to exceed the threshold ($4.5m for example), but would have to pay a tax (25% perhaps) on their excess payments back to the NRL. These funds would be used to assist poor performing clubs.
In spending this money, the emphasis should be on providing long-term benefits like improving junior development and increasing club membership, rather than simply for buying players.
The luxury tax could be used in conjunction with meaningful concessions for long-serving players to promote club loyalty, and perhaps concessions for local juniors to maintain and bolster the idea of club district identities.
The benefit of the luxury tax is that it would be a more flexible and responsive system, while still maintaining a way to foster an even competition over the medium term.
It’s plain to see that the NRL salary cap is not doing what it is supposed to be. Sadly, it is doing too much.
Rather than spreading the talent around the league, it is spreading it offshore and to other sports. A luxury tax system might just be the way to address the problem.
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