The NRL has stripped the Melbourne Storm of two premierships, as well as any competition points this season, and fined a total of $1.6 million after being found guilty of long-term salary cap breaches. AAP Image
The swingeing nature of the NRL’s punishment of the Melbourne Storm for rorting the salary cap system suggests that when the full story comes out the once-esteemed franchise has been put into a situation where its credibility will take years to restore.
In other circumstances, this elaborate and contrived rorting which involved (Medoff-style) two different set of accounts would spell the death-knell of the franchise.
But the NRL needs a presence in the second biggest market in Australia. The Storm will survive. But it is doubtful whether it can get together a team of stars as it has in the past to take it to premiership glory.
That glory has turned to ashes with the NRL taking away its two premierships victories in 2007 and 2009 (but not passing them on to Manly and Parramatta).
The club must pay back $1.1 million in prize money. It has been fined $500,00 (the same amount as the Bulldogs in 2002). And the club will not be able to accrue any more points this season which effectively rules them out of any premiership contention.
The elaborate rorting system, with its two sets of books, meant that $1.7 million was over-spent against the salary cap in five years, a total which included $700,000 this season.
Aside from the implications for the Storm itself, with News Ltd already sacking several administrators (‘I feel sick to my stomach,’ John Hartigan, chairman of News Ltd is quoted as saying), there will be questions raised about the salary cap itself, the future of star rugby league players staying in the code and what interest there will be in the Storm’s matches this year given the fact that they are playing now to stop other sides from accumulating points.
The salary cap system must come under intense scrutiny.
This scrutiny will also be applied to the amount of money the NRL doles out to the clubs.
In turn, there will be renewed criticism (from commentators like Phil Gould) of the cosy arrangement that exists between News Ltd, which finances the Storm, and the NRL which allocates the payments to the clubs and receives monies from the television channels (not enough according to many people) for the rights to televise the games.
There will now be a witch-hunt into those Storm players who have benefited from the salary cap rorting.
This has already begun in regard to the Storm captain Cameron Smith and his third-party agreement with Fox Sports.
My belief is that the salary cap should probably go.
It is being rorted one way or another (coaching staff are not part of the cap, for instance) and the clean way to go is to abolish it.
Then there can be transparency in payments. The impossibility of holding a team of stars together under the salary cap of $4.25 million means that clubs determined on success will try to get around the cap in any way they can.
The future of rugby league code in Melbourne will be greatly jeopardised.
In Melbourne, the Storm has built up a successful rugby league franchise and with the new stadium dedicated to the football codes, that franchise was in a position to start posting crowd figures that would make the club extremely viable.
You would think, too, that the Storm’s loss of credibility would be a boom to the Melbourne Rebels, the Super Rugby side that will start operation next season. But the problem here is that the CEO of the Rebels is Brian Waldron who was a CEO of the Storm.
Hartigan says that ‘at this early stage’ he believes that Waldron was the architect of the two sets of books rorts.
Both the rugby codes have been given a terrible belting in Melbourne, therefore, from the scandal.
I believe that the Rebels can get out of their mess by sacking Waldron. But the Storm do not have such a comparatively easy action to take to clean up their mess.
danwighton
Guest
No. Wasnt it only a few months ago that people were saying the storm would have no-one at their games? Yesterday they got just under 10,000 to a game: against Canberra (poor away drawcard), while resting some of their star players, at the same time as TWO AFL games a stone's throw away, in the middle of a hailstorm, and with nothing to play for! This is the first time they have been sub 10K this year - and all in the worst circumstances. There was 7K at Penrith on Friday night, the Panthers sitting second on the ladder with everything to play for against a resurgent Cowboys team. In a couple of years we may be talking second Melbourne team! ;P
Jim Wilson
Guest
The Storm seem to have a lot of viewers: MEDIA RELEASE- 3 May 2010 Top 50 Subscription TV Program Broadcasts 1 LIVE: NRL STORM V WARRIORS FOX SPORTS 2 Sun 18:00 312 312 1,333 703 2 LIVE: NRL COWBOYS V STORM FOX SPORTS 2 Sat 19:30 277 277 1,435 588 3 LIVE: NRL SEA EAGLES V TITANS FOX SPORTS 2 Mon 19:00 247 247 1,219 641 4 LIVE: NRL TITANS V PANTHERS FOX SPORTS 2 Sat 17:30 235 235 1,193 574 5 LIVE: AFL FREMANTLE V RICHMOND FOX SPORTS 1 Sun 20:30 217 217 997 582 6 LIVE: AFL SYDNEY V BRISBANE LIONS FOX SPORTS 1 Sat 19:00 186 186 1,372 720 7 LIVE: AFL HAWTHORN V NTH MELBOURNE FOX SPORTS 1 Sun 17:30 185 185 1,269 629 8 LIVE: NRL RAIDERS V RABBITOHS FOX SPORTS 2 Sun 14:00 183 183 934 434 9 THE SIMPSONS FOX8 Wed 19:13 140 164 1,030 1,697 10 LIVE: AFL ADELAIDE V PORT ADELAIDE FOX SPORTS 1 Sat 15:00 140 140 1,119 433 11 NRL DRAGONS V SHARKS FOX SPORTS 2 Sat 21:20 139 139 1,102 373 12 LIVE: AFL: ON THE COUCH FOX SPORTS 1 Mon 20:30 132 132 1,256 210 13 LIVE: NRL SATURDAY PRE GAME SHOW FOX SPORTS 2 Sat 16:55 132 132 1,112 281 14 LIVE: NRL WARRIORS V RAIDERS FOX SPORTS 2 Sat 15:00 131 131 1,096 364 15 SELLING HOUSES AUSTRALIA Lifestyle Channel Wed 20:30 129 160 1,000 560 16 RELOCATION: PHIL DOWN UNDER Lifestyle Channel Wed 19:30 126 153 1,128 559 17 HANNAH MONTANA Disney Channel Mon 18:00 124 124 985 614 18 AMERICAN IDOL PERFORMANCE SHOW FOX8 Wed 19:38 113 148 1,130 462 19 FAMILY GUY FOX8 Tue 18:40 108 125 886 882 20 FUTURAMA FOX8 Thu 18:17 106 135 801 912 21 LIVE: RUGBY UNION: S14 BRUM V REDS FOX SPORTS 3 Sat 19:30 99 99 1,410 308 22 PROJECT RUNWAY ARENA Mon 20:30 99 104 1,256 311 23 GRAND DESIGNS REVISITED Lifestyle Channel Thu 20:36 89 99 1,093 406 24 NCIS TV1 Thu 19:30 87 106 1,050 873 25 LIVE: RUGBY UNION: S14 H'DERS V W'TAHS FOX SPORTS 3 Fri 17:30 86 86 926 223
Jim Wilson
Guest
http://www.theaustralian.com.au/news/nation/watchdog-to-check-for-law-breaches/story-e6frg6nf-1225857630482 24 April 2010 ...Despite the current uproar, Melbourne Storm's latest accounts reveal the embattled club to be in a sound financial position, having turned its previous year's $967,000 loss into a $1.6 million profit. The club's recent success in the National Rugby League, including two premierships in the past three years, has obviously started flowing through to its bottom line, with income from membership fees rising by more than $200,000 to $1.3m during last season.
stormybill
Guest
Your worst nightmare Roger!!! We will be back bigger and better than ever with a few new members thanks to comments like yours hahahahahahahahaha.
captain nemo
Roar Guru
i agree with you sheek. maybe the sharks will play canberra in the grand final this year
sheek
Guest
I wonder if the NRL is prepared to go the next step? Which is of course, to apply the same scrutiny to the other 15 clubs that it has recently applied to the Melbourne Storm. You're all familiar with the old saying - if you go looking for trouble, you're bound to find it! On the salary cap, it's not the problem. Perhaps the application, or cap, in this instance needs review, but I am 100% behind the concept of a salary cap in sport.
mahony
Guest
You either have a salary cap and enforce it because of its relationship to fair-play or you don’t. There can be no grey area in this stuff because it is cheating - plain and simple. The NRL have to protect the integrity of their competition (it is commercially and legally important to do so and for a range of reasons) and maintain a Melbourne presence (TV rights etc...). The Storm are not going anywhere - but they will pay a price for many years to come. The cap will stay also for the very reasons it exists allready - particularly for teams as narrowly funded as Storm (the Gold Coast United of league).
Ken
Guest
'The Bulldogs breaches weren’t anywhere near this serious,' They were very similar actually, in both size and planning complexity (if not execution). The only real difference is that the Dogs hadn't won anything so there were no titles or prizemoney to strip - otherwise the penalties were also very similar, being made wooden spooners for the year and a half million fine. One thing you can give the Dogs supporters though is that they stood firm behind their team knowing that good times would come around again. Hopefully Melbourne's lack of a long history doesn't stop its supporters doing the same Parra and Manly fans, yeah - but what about the other teams that were knocked out of the finals (or even finals contention) by losses to this team? Without them there who knows who would have the comp in those years
John
Guest
There are no secrets in a sport team. I am watching to see how John Hartigan spins this to make people believe that News Limited, which owns Melbourne Storm and signs all the cheques did not know what was going on.
John
Guest
Gallop is Rupert Murdoch's boy. He will be looked after.
John
Guest
Waldron is gone. The Rebels have suspended him and there is no way he can survive. You may be right about the negative publicity Sheek, but in recent years I have seen things in sport that would make a fish winning a foot race look ordinary.
Apelu Tielu
Guest
Hello Adam, The TPA outlaws the fixing of salaries, which is what the salary cap does. Sports have to apply for exemption so they can use a salary cap. Otherwise, they could be in breach of the TPA. As for the trade in human beings in professional sport, I think you are getting a little technical here. If you are honest and objective, you'd be able to see that the system used by professional sports tantamount to a trade in people. First, you can easily change job if you want by simply resigning. That is not readily available to many professional sport people. It is not unusual for a professional baseball player, say, in the US to wake up one the morning and find himself (his contract ) being sold to another team without his knowledge and say. So he moves, because the contract does not play. Second, if you move to another employer, your previous employer cannot demand financial compensation from you current employer as they do in many sports, for instance, soccer. In reality, sport organisations look at their players as real assets that they can trade, and which they do. How many do the same for their other employees, like coaches? I know of none.
Kurt
Guest
'A huge boost to rugby in Melbourne'. Do keep in mind that the majority of Melburnians don't actually differentiate between the 13 & 15 man codes - it's just 'rugby'.
Adam
Guest
Where in the Trade Practices Act does it mention salary caps are outlawed? I'm genuinely interested as to where you got that idea from. In relation to human trade, clubs aren't trading humans, it is an employment contract in which you work in exchange for income. A large percentage of those who work have signed an employment contract. Players aren't forced to sign contracts, so it isn't "human trade." If we use your example in the real world, it would be illegal for me to change my job from one company to another.
Mick Gold Coast QLD
Roar Guru
A media report late tonight: "Early on Thursday morning, leading bookmaker Sportingbet shut down its wooden spoon market after fielding several bets at 250-1, with three punters standing to win $10,000 each." I love how quickly the fix is in when someone's in the know!
Alders
Guest
Just wondering. Why do we still say the State of NSW? It hasn't been a colony in a while now. Is there still confusion?
Mick Gold Coast QLD
Roar Guru
I would have thought the player managers could not help sprouting about their success on behalf of this bloke and that, when they're trying to convince the next potential client how clever they are. And just about every professional sport is characterised by jealousies, hatreds, liasions, friendships and gossip, during all but the few hours of intensive effort they put in each week. My son (also a Union fan and disinterested in League) told me tonight that the overpayments had been common knowledge in his circles for quite some time.
Mick Gold Coast QLD
Roar Guru
I can only but imagine what the Parramatta fans will give Melbourne for their corner next time they visit for a game! And the time after that, and the time after that!
oldtimer
Guest
i still think the NRL hasnt thought this all the way through. taking any chance of Melbourne accruing points has opened a big can of worms. one blogger wrote elsewhere - Melbourne Storm you now have the control of the whole season outcome in your hands . As the storm cant get a single point then only beat the teams in the top 8 and let the lower teams flog you by 60+ points and then we might not see the dragons or manly in the finals for 2010. well?? it is food for thought.
oldtimer
Guest
and yet, nothing was done about them ???? Bennett got away scot free as well.....