Rugby League Players Association (RLPA) chief David Garnsey expects a gradual increase to the NRL salary cap over the next five years rather than a dramatic overnight boost if a $1 billion media rights deal is signed.
There has been media speculation that a $1 billion five-year deal would see the cap raised from $4.3 million to $7 million by 2013, but that would surprise Garnsey.
The NRL’s last rights deal was for $500 million over five years.
“There’s been certain projections bandied around, some famously that were disclosed to club CEOs and then disclosed by media people last year,” Garnsey said.
“I would have thought it’s probably unlikely the salary cap would go straight up to the adjusted amount to reflect that new media rights deal, as opposed to being stepped for that five-year period,” he said.
“The salary cap will grow as the game will grow.”
The media rights deal will be the first thing on the table for rugby league’s Independent Commission which is slated to begin on February 10.
Garnsey admits he’s not sure how much the rights deal will be worth or when it will be done but says the RLPA does have some expectations as far as the salary cap is concerned.
“If the figure isn’t $5.2 (million) by 2013, I’d be disappointed but it could be a lot more than that. I think it would be at least that ($5.2m),” he said.
Garnsey is more hopeful than ever the Independent Commission will become a reality next month.
“This date seems to have been put forward with a lot more conviction than the ones previously and I’m placing a lot of stock in that it will happen,” he said.
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January 28th 2012 @ 9:43am
Ian Whitchurch said | January 28th 2012 @ 9:43am | Report comment
Geez the RLPA is a weak union.
Compare those statements with the ones the AFLPA was making … personally, I think that limiting the growth in the cap is the right thing to do for rugby league, but as a player, I wouldnt be meek in accepting that without some serious quid pro quo.
January 29th 2012 @ 4:43am
amazonfan said | January 29th 2012 @ 4:43am | Report comment
To be fair, it wasn’t so long ago that the AFLPA were weak. They only really started to show strength with the latest agreement (and free agency), but until then? One of the weakest unions in international sport, much to my shame.
January 28th 2012 @ 11:37am
Paul said | January 28th 2012 @ 11:37am | Report comment
Maybe they would scrap the salary cap and let the clubs sort them selves out. After an initial surge in player payments it would comeback to a more sustainable level as there will be more players available to fewer clubs and then maybe we can nationalise the code.
January 28th 2012 @ 1:06pm
Ian Whitchurch said | January 28th 2012 @ 1:06pm | Report comment
Paul,
The stupid, it burns.
First of all, which clubs go broke before sanity returns will essentially be random.
Second, the vast disparity in playing strength during the period of crazy will make crowds go haywire.
Thirdly, nationalising the code will be much harder once Canberra and Melbourne have gone broke.
Fourth, clubs wont just go broke. Clubs will go broke owing large bags of cash to players. Think this makes rugby league a more attractive sport for elite athletes ?
Again, the stupid, it burns.
January 28th 2012 @ 10:16pm
turbodewd said | January 28th 2012 @ 10:16pm | Report comment
isnt Cronulla the club in the dodgiest position apart from Melb who have leagues club behind them?
January 28th 2012 @ 11:00pm
Ian Whitchurch said | January 28th 2012 @ 11:00pm | Report comment
Turbodewd,
Yes, and they know this, so if the no-cap plan was implemented, theres a better than evens chance they would go to their members and go ‘we’re going to go out there with kids and veterans, and aim to win six games a year and just *survive*’.
Meanwhile, a club is a “better” position – St George, say – goes stupid in Free Agency and finds itself owing more money than they can cover.
End result, the smoke clears and Cronulla survives and St George doesnt.
Im not saying that will happen, but if you’ve ever played poker, you’ll know that weak hands arent the ones that see you out of the tournament.
January 31st 2012 @ 2:04pm
Paul said | January 31st 2012 @ 2:04pm | Report comment
Now thats a stupid analogy, comparing footy to poker
January 28th 2012 @ 1:15pm
Frank Lee Kennedy said | January 28th 2012 @ 1:15pm | Report comment
It is a fair statement by David Garnsey. Definitely a gradual increase is better that a sudden surge and nothing after in the following 5 years.
The bottom line is that the Salary Cap must stay competitive with other elite winter sports otherwise the players will look after themselves.
I’d be excepting if every team would have 1-2 marquee players (another winter sport has already similar rule) outside the cap so the top 16-32 players can stay in the sport rather than moving on to greener pastures.
January 28th 2012 @ 11:03pm
Ian Whitchurch said | January 28th 2012 @ 11:03pm | Report comment
Frank,
You should also note that same winter sport has a number of clubs in deep financial trouble.
If you are going to have a cap, it has to be a hard cap or it’s pointless.
January 28th 2012 @ 11:24pm
Frank Lee Kennedy said | January 28th 2012 @ 11:24pm | Report comment
Ian, if I replace your word ‘hard’ to ‘competitive’ I shall agree with you.
In a capitalist society (which does not seem to end just yet in the near future) sometimes the principles are overrun by the fact, that unless you become more competitive, you will lose.
Nice idea to keep the Salary Cap down, but we do not live in a vacuum, but a very competitive society. Sometimes our decisions do not reflect the values of justice, but we react to other aggressive forces who invade our territory.
That’s why we cannot sit on our laurels and wait until other sports take our best talents. We have to ’fight’ our way to be the best, I am afraid. We will win. Over to you.
January 29th 2012 @ 12:34am
NF said | January 29th 2012 @ 12:34am | Report comment
So Ian provide us with your ideas on helping rugby league since i noticed you comment in alot of the articles I don’t know if you’re a league fan on not based on the tone of some of your posts but for now I give you a benefit of the doubt.
January 29th 2012 @ 7:24am
Ian Whitchurch said | January 29th 2012 @ 7:24am | Report comment
NF,
I love the great game of rugby league. I also love a number of other games.
First thing, end the low-grade civil war and announce the IC isnt interested in folding any club, or reloacating them against their will. Everyone is going to get through this together.
Second, broken time for clubs in rep football. If a player is broken, the club gets a cap rebate to help pay for their replacement. Just getting selected is worth a smaller rebate.
Thirdly, each NRL club gets a developing country or region to look after – St George gets Wales, South Sydney gets the USA, and so on. Clubs can get $100k in cap rebates by providing player-coaches and other help to that country and region, and need to report annually and publicly what they’ve done. Players from that region count as “local juniors” for that club.
Fourthly, local juniors get a 10% cap discount, and five year players get a 10% cap discount, and ten year players gets a flat $50k discount. These stack. Clubs have a mandatory minimum spend of 92.5% against the cap.
Fifthly, set up NRL TV with the aim of having pay TV subscribers subscribe to that directly rather than via Fox Sports. This will probably involve going to war with News Corp (note the AFL is giving strong hints they are planning this).
Sixthly, as part of the new TV contract, set the schedule in advance, so fans know when they are playing.
Finally, Origin is there to pay for country football. After costs, players get 20%, QRL gets 20%, NSWRL gets 20%, ‘NRL Ground Fund’ gets 20% and ‘NRL Rainy Day gets 20%. Players pay their coaching staff etc.
January 29th 2012 @ 12:35am
Ian Whitchurch said | January 29th 2012 @ 12:35am | Report comment
Frank,
The term ‘hard cap’ means a club can only spend up to that cap on salaries – the AFL and NFL are examples. A ‘soft cap’ involves exemptions for marquee players, luxury taxes and other loopholes – the A-League and the NBA are examples.
Soft caps are pretty useless, and lead to competitive imbalance, clubs going broke, or both.
That said, I’ll roll over on a “Larry Bird Exemption” for one-club players, and a local junior discount, because the code will be healthier if clubs put an effort into developing their own juniors.
Rugby League needs a hard cap because it doesnt have any cash reserves or assets – the NRL doesnt own grounds, and it still hasnt refilled the war chest that the Super League War emptied. Therefore, it needs to take a big chunk of the new TV deal to make sure it has money for a rainy day, and that means not distributing it to clubs to give to players, coaches, assistant coaches, assistants to assistant coaches and hangers on to assistants to assistant coaches.
I’d also disagree strongly that other sports have taken rugby league’s talents – Folau, Williams and Hunt are all second-rate talents, when compared to, say, Jonathon Thurston.
The key is not to panic, and get the foundations right. That means membership drives, stadium development, the Metro Cup, the Queensland Cup, country rugby league and junior contracts are what needs to be supported, not distributions to NRL clubs to make more rich players richer.
January 29th 2012 @ 12:58am
CJ said | January 29th 2012 @ 12:58am | Report comment
It’s not the idea but the implementation. A soft cap, luxury tax, could be fine if it helped in some other area, such as revenue sharing. Ideally, the best thing is to have equal revenue and let teams have at it.
By the way, I always wondered why only player wages are artificially supressed, but not coaches’ wages, or trainers’ wages. Sort of makes you wonder when teams , who are capped from “buying up all the best players”, can hire the best coaching staff, the best medical staff, use the most sophisticated equipment, etc.
On a related note, I wonder why fans identify with clubs, which are making multi-million dollar profits for near-billionaire owners, rather than “rich get richer” players.
January 29th 2012 @ 9:21am
Frank Lee Kennedy said | January 29th 2012 @ 9:21am | Report comment
Ian, I do not disagree with most of your comments. It is not hard or soft cap I was talking about, but such one which prevents our best talents leaving. We have to pay competitive salaries with our major competitor in the winter sports otherwise we will lose. Enough said.
I strongly disagree calling Folau a second rate talent, he was on par with Inglis when he started, some even said that he was better. It is not really critical question, who is/was better, but why he left. More MONEY. How you would have stopped that?
Why it is not the other way around? MONEY. To be sure. No drama.
January 29th 2012 @ 10:16am
Ian Whitchurch said | January 29th 2012 @ 10:16am | Report comment
Frank,
As a Bunnies supporter, I dont call Inglis first rate either.
Regarding Folau, as a GWS supporter, Im excited to see him at full forward – he’s a rare talent at that position. That said, Hunt and Folau going to play in the AFL wasnt the best-case scenario for Andrew Demetriou.
The best case for the AFL was that the NRL matched the bid, and kicked off another cycle of elite player payments that the clubs can’t afford, thus killing Canberra and Cronulla at least.
Hunt and Folau’s pay packed didnt do anything to Jonathon Brown’s, or to Dane Swan’s, or to Andrew Goodes’ pay packet, as the AFL can say ‘If you are a high profile recruit that got us that much media in Queensland and NSW, we’d pay you a million bucks outside the cap too’. But it would have done things to Thurston’s salary, and to Inglis’ and so on, as them staying in rugby league is more valuable than Hunt and Folau are … and if you match payments to AFL defectors, then you need to match them to rugby union defectors too.
Therefore, the pressure to soften the cap would have been overwhelming – and with the low attendances of rugby league, the crap TV deal and the lack of sponsorship because of clubs across the country, several clubs just can’t afford that. They either go broke quickly trying to match it, or slowly as supporters and sponsors dont want to associate with a club for whom nine wins is a great season.
January 28th 2012 @ 4:40pm
Australian Rules said | January 28th 2012 @ 4:40pm | Report comment
“The NRL’s last rights deal was for $500 million over five years.”
It was 500m over 6 years.
January 31st 2012 @ 6:56am
Crosscoder said | January 31st 2012 @ 6:56am | Report comment
Correction AR
The last Tv deal was $564m over 6 years ie $94m pa
Sky NZ $12m pa (the Warriors are part of the NRL)which cannot be ignored in the revenue factor.
ch9 $40m pa admitted by Gyngell 7/3/10
Foxtel $42m pa
January 29th 2012 @ 9:35am
League fan said | January 29th 2012 @ 9:35am | Report comment
Ian you make some good points there. I certainly agree that there should be some concessions for local juniors and players that have only played for the one club. I believe a club should definately have an advantage in retaining juniors as well as long serving club men. Hopefully this would bring a bit more loyalty back to the game.
I like the idea of a club looking after a developing nations as I am fan of spreading the game internationaly and I can certainly see the benefits of it however I am not sure if the NRL care too much about the international game.
January 29th 2012 @ 10:19am
Ian Whitchurch said | January 29th 2012 @ 10:19am | Report comment
League Fan,
Yes. Thats why Im proposing to give NRL clubs a reason to care – namely cheap juniors and cap room.
January 29th 2012 @ 10:44am
Frank Lee Kennedy said | January 29th 2012 @ 10:44am | Report comment
Now you telling me…Easter Bunny…closet eiefel fan (in a light hearted way, no drama).
I have no idea about the names you throwing around, I am a one eye NRL and Cricket fan only (happy for the Sixers last night), ex-Sydney man myself, now north of the Tweed.
Anyway, we went far away from the original subject which is I support DG to a slow increase in the Cap rather than a explosion. On the other hand sometimes we have to fight for our best talent and because THEY are being a generation behind us have 2 questions; where is the MONEY and is that all?
So either you pay them or they leave. Full stop. You sure do not mind them being a pitcher and receiver as well.
January 29th 2012 @ 11:28am
Ian Whitchurch said | January 29th 2012 @ 11:28am | Report comment
Frank,
This one move, “I’d be excepting if every team would have 1-2 marquee players (another winter sport has already similar rule) outside the cap” explodes the cap by about $1m, maybe $2m.
Remember, if Sandow, say, is paid outside the cap, the Parramatta have another $700k or so to spend on players, which they will. This puts a team like, say, Cronulla even further behind the eight ball.
January 29th 2012 @ 11:34am
Frank Lee Kennedy said | January 29th 2012 @ 11:34am | Report comment
Oh, no. I meant if it is outside the Cap, private sponsors would come in to the game and pay that. No Club would be disadvantaged by this. Couple of well off South supporters would be keen to buy you a halfback this year, I am sure…
January 29th 2012 @ 11:50am
Ian Whitchurch said | January 29th 2012 @ 11:50am | Report comment
Frank,
Then money that should be going to sponsor the club directly gets shifted into cap-free player sponsorship (*cough* Chris Judd and Visy).
As well, once you get a tradition of off-cap direct player sponsorship by well-off supporters going , it gets very tempting to spread the wealth a little (*cough* Carlton *cough*) … and oops, remember that salary cap we used to have ?
January 29th 2012 @ 12:17pm
Frank Lee Kennedy said | January 29th 2012 @ 12:17pm | Report comment
Sorry, it is all Chinese to me. I do not follow the other winter sports. Anyway what’s wrong if say ex-Premier Greiner or Ray Martin (perhaps George Piggins via Flower Power) throws in a mill each next year and buy a Premiership for you by buying Johnno Thurston? One marquee player outside the Cap surely won’t break any Club.
January 30th 2012 @ 10:14am
Ian Whitchurch said | January 30th 2012 @ 10:14am | Report comment
Frank,
If you dont see what has gone right and wrong in other codes, then you call on your code to repeat the same mistakes they made.
The NBA is the other league you should look at for when cap-based systems, off field earnings and players moving to win a flag all hit a salary cap head on.
And none of this has anything to do with whether you like whatever it is that they play or not.
January 30th 2012 @ 4:22pm
Frank Lee Kennedy said | January 30th 2012 @ 4:22pm | Report comment
Ian, if you think that the only way forward is your ‘hard’ cap, you are deluding yourself. Obviously the opposite, like giving a big increase in the Salary Cap is also a mistake. I am in the middle ground, believing in gradual increases in the Cap, allowing individual player sponsorships for 1-2 marque players (to save them from defecting) and creating a ‘war chest’ for future necessities.
Details anyway can vary, but those are my main points. They all can be achieved simultaneously.
If the IC management will be as good as in other codes, NRL will have a great future.
January 29th 2012 @ 1:26pm
CJ said | January 29th 2012 @ 1:26pm | Report comment
The real problem is simply that some clubs are weak.
If you were building a National Rugby League competition today you wouldn’t have these provincial Sydney clubs, and you certainly wouldn’t have one club in Brisbane.
“Tradition” simply isn’t a good enough reason. If you rearranged the competition now: sixteen teams, five QLD (that Brisbane has one team is laughable), six NSW, WA, ACT, Melbourne, NZ and whatever, then THAT would be “tradition” in thirty years’ time. And if we had this setup, nobody would say “You know, we should put more teams in Sydney, a saturated football market where some clubs will be financially unviable”. Nobody! The number of teams in NSW is nothing but a relic of an older time, and the fact that it’s allowed to harm the competition is… silly.
If you’re going to let teams keep juniors, then you probably need a draft as well – otherwise you’ll get under-the-table (or outside-the-cap) payments and handshake agreements that keep kids playing for the richer, better clubs and you might get to a point where rich teams get all the players AND don’t have to pay for them to boot.
January 29th 2012 @ 1:38pm
CJ said | January 29th 2012 @ 1:38pm | Report comment
I’m personally of the opinion that revenue sharing, not payroll caps, deal with the fundamentals of this issue. If all sixteen clubs have identical revenue, then a salary cap is entirely unnecessay. Some clubs will buy expensive players, some will buy expensive coaches, some will do a bit of both. This has the added effect of not artificially suppressing player wages, which I find silly and unfair (imagine ANY other industry doing this).
You, of course, need to think of a plan for revenue sharing without removing the incentive for clubs to grow their fanbases and generate their own revenue instead of “free riding”, but the NRL can pay some very smart people hundreds of thousands of dollars to get this right. You have to ensure you don’t reward teams that “should” be making more money but aren’t because of lacklustre marketing or brand awareness, and you shouldn’t punish teams that are making money from years of success and forming a strong local brand.
The problem here is that you need to define how much a team “should” make, based on market size (eg. penalise Brisbane for being the only show in a big city), alternatives for entertainment (eg. subsidise Melbourne for being in AFL heartland), historical TV ratings and years in the league (as a proxy for the popularity of the sport in the region); and who knows what other variables.
January 30th 2012 @ 10:16am
Ian Whitchurch said | January 30th 2012 @ 10:16am | Report comment
CJ,
I’d recommend you have a look at the AFL’s disequal funding model.
Google ‘afl disequal funding strategy’ (no quotes) and it should be the one that comes up first. Note how central funding is linked to outcomes – see page 5 and 10 for example.
January 31st 2012 @ 6:13pm
CJ said | January 31st 2012 @ 6:13pm | Report comment
Interesting that they have a plan.
By the look of it the plan is to allocate additional funding to teams hampered mostly by insufficient infrastructure (training and development); debt; or poor stadium deals. I guess this is an indirect way of focusing on revenue sharing.
Of course, I agree absolutely with the plan. If you just made billion+ dollars, for God’s sake pay off all your debt and have eighteen healthy clubs.
January 31st 2012 @ 6:13pm
CJ said | January 31st 2012 @ 6:13pm | Report comment
Interesting that they have a plan.
By the look of it the plan is to allocate additional funding to teams hampered mostly by insufficient infrastructure (training and development); debt; or poor stadium deals. I guess this is an indirect way of focusing on revenue sharing.
Of course, I agree absolutely with the plan. If you just made billion+ dollars, for God’s sake pay off all your debt and have eighteen healthy clubs.