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It is time to scrap the salary cap

Melbourne Storm fans gather outside AAMI Stadium to show their support at a training session on Saturday, April 24, 2010. AAP Image/David Crosling
Roar Guru
9th October, 2013
36

The idea of the NRL salary cap is to have a level playing field and making all teams equal.

The NRL website states the following about the salary cap:

“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.”

But the reality of the salary cap is that it has created a cycle where teams build up over a number of years to the point where they are at or near the top and then find they can’t keep all of the good roster that they have built up and so then begin to lose payers which starts them on a downward trend.

This is because, that as young players mature and improve they become desirable to have by rival teams which then pushes up their market value.

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The club that developed the player then must increase their pay or lose them.

To then stay under the cap, they have to let other players go.

Sometimes it is long term good players that are let go despite being loyal club men as they are at the end of their career, or sometimes the clubs choose to keep the experienced player and let the young player go – which of course is a short term gain for a long term loss.

Either way, the clubs must make hard choices.

Either way, they will suffer a fall in their quality as they have either lost the young up and comers or they lose their experienced players.

And the main reason I dislike the cap is that it can be rorted.

The Storm and ‘Dogs both came undone in a big way by trying to cheat the cap.

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The big question is – how many clubs are breaking it now and getting away with it?

There is always a lot of talk about refining the salary cap to make it work better.

In my opinion if we are to change the cap we need to look for a system that genuinely puts all clubs on an equal footing and allows them to keep their own junior players. As well as making it cheat proof.

We also owe it to both the clubs and the fans to find a system that ensures clubs can retain juniors and or long term players.

Some suggestions are laid out below
• That junior players should not count in the cap. This would encourage clubs to develop their junior players and allow them to keep them.

• That long term imported players are either not counted in the cap or are discounted. This will ensure that imported players with, say five or ten years’ service, are not discarded for younger players; clubs can show them loyalty and allow them to finish their careers at their club.

The cap could then be reduced as it is only applying to non juniors.

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These two points may improve the salary cap system but I believe that a better idea is a points quota for imports (imports being players from another club whether they are Australian or not).

Firstly, I would dictate that all NRL clubs should be associated with a country and interstate league region and that these regions would form part of the clubs junior territory along with its traditional territory.

Then any club could only import players worth so many points – with the points being decided on by a system that awards points for the level that a player has obtained. e.g. an Origin player is worth more points than a non-origin player and a player with five years first grade experience is worth more points than a rookie etc.

The down side of such a points system would be arriving at a consensus of how many points players are worth and this issue alone may be a reason that this type of system will never get introduced.

A very worthy upside of a points system is that a points system cannot be cheated like the salary cap can.

The Storm and the Bulldogs would never have been able to build up winning teams with illegal payments as the amount of points each player was worth would be published for all to see. It would be much easier to enforce as well.

The clubs would then be successful based on their own juniors but with the allowance for a ‘top up’ of imported players.

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I thought about the prospect of having an increased import quota for the teams that finish at the bottom of the comp, but this could lead to tanking at the end of the season and so I do not see it as a viable option.

As for the NRL’s second reason for introducing the cap…

This is basically to ensure that the rich clubs don’t buy all of the good players and that poor clubs don’t go broke trying to compete. But why stop clubs going broke?

Before you decry this idea, think about it. Does the game want financially irresponsible clubs as a part of the league? These clubs use up the NRL’s cash resources in attempts to ensure their survival.

I do not believe that having no ceiling on player payments under a points quota for imported players would lead to higher wages.

In fact it would help to keep them wages stable as clubs would be limited in how many players they could purchase.

Thus reducing the demand for imported players and so creating a market where poorer clubs can survive alongside the richer clubs.

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Once a club has reached their points quota they may have millions of dollars in the bank but cannot use it to lure more players as their quota will have been used up.

Similarly, the wages of young junior players will not skyrocket out of control either as they will have lost their main bargaining tools for higher wages – that is, other clubs making them big offers to change allegiances which they can use to gain a pay rise from their current club.

This quota system, while still allowing players to move to other clubs, will encourage them to stay at their own junior club.

The salary cap is by the NRL’s definition designed to ‘spread the playing talent’ but why should clubs that develop good junior players lose them to rich clubs – or to any other club for that matter?

Do we want to encourage clubs to develop and keep their own juniors?

I think that we do.

So, to do this we need firstly have all NRL clubs associated with country and interstate league regions as part of their own juniors and then scrap the cap and limit the number of imported players through a points quota and thus encourage clubs to not only develop their own juniors but allow them to keep them.

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