The NRL introduced the Salary Cap in 1990, and whilst it has kept the majority of teams on a level playing field, its introduction to Australian Rugby League has unfortunately seen it bring out the worst in most clubs.
NRL Chief Executive David Gallop has ensured time and again the Salary Cap was put in place to ensure an even and unpredictable competition on a yearly basis.
Counting on the evidence of the past nine seasons, Gallop would be mightily pleased with the Cap’s influence on the NRL, with eight different sides winning the Telstra Premiership between 2001 and 2009.
On the other side of the coin, however, the Cap has transformed the NRL into one of the few competitions in the world where successful teams are forced to pay for their on field achievements.
In 1991, The Canberra Raider were the first superstar outfit to feel the cruel nature of the Salary Cap, after stamping themselves as one of Rugby League’s finest ever outfits in the 1990’s.
After making back to back Grand Finals in 1990-91, the Green Machine found themselves embroiled in Rugby League’s first genuine Cap scandal which saw the club fined $100,000 and ordered to pay $85,000 in unpaid salary from 1990.
The fallout from the Salary Cap scandal saw several key stars depart the club, among them duel Premiership winner Glenn Lazarus.
Despite winning the Premiership in 1994, the Raiders have coincidently never risen to the heights of their predecessors since the scandal broke, and are constantly one of the sides tipped to win the wooden spoon.
The all conquering 2002 Canterbury Bulldogs side, which went on a 17 match winning streak, also fell victim to the Salary Cap, after the club was found to have committed serious and systematic breaches totalling $920,000.
The result saw Steve Folkes’ men imposed with what had been the biggest punishment imposed by the NRL on a club for cheating the Cap.
As is testament to the Bulldogs character however, the team managed to bounce back two seasons later, securing a premiership victory against the Sydney Roosters to round off a terrible period on a high note.
Although not as severe a punishment as the Bulldogs received eight years ago, the New Zealand Warriors were still left to rue what could have been at the end of the 2006 season, after the club was deducted four competition points at the start of the year for committing major breaches to the Cap in 2005.
The penalty cost the Warriors a position in the top eight, after the New Zealand outfit went on to win eight of their final twelve matches to finish four points short of a finals birth.
Over the past twenty years, clubs such as the Sydney Roosters, Wests Tigers, Newcastle Knights, Cronulla Sharks, Brisbane Broncos, St George Illawarra Dragons, Penrith Panthers, South Sydney Rabbitohs and the Gold Coast Titans have also copped substantial fines for minor indiscretions against the Salary Cap.
And now, the NRL salary cap, (which on average, pays each player $180,000 per year) has forced the Melbourne Storm to run a well-organised dual contract system which made $1.7 million of payments to players outside of the $4.2 million salary cap.
It was a scam which has cost the Storm its rich history, dignity and pride in what was arguably the club’s greatest era on the field.
Despite all the troubles NRL clubs have experienced with the Salary Cap, Chief Executive David Gallop and Cap Auditor Ian Shubert will ensure it remains apart of Australian Rugby League for many years to come.
Sadly, it seems the same cannot be said for the Storm.
jus de couchon
Guest
If the NRL want to gamble , which they normaly do , the local connection with clubs will be jettisoned in favour of their next big Idea.
Teffers
Guest
Great article. Although I am not a supporter of rugby league I can see their dilema. As a follower of the round ball game, the pro's and con's of a salary cap is all too clear. The A-league is one of the few leagues in the world that has a salary cap. This ensures that the comp is rather even and very unpredictible. The down side is that this makes the up and coming players an easy target for overseas leagues with money to spend (similar to Union buying league players). The player exodus from the A-League is rather large, though without a salary cap the league would collapse. On the other end of the spectrum is the EPL where you have the "Big Four". They have the money and the means to purchase a majority of the best players available. This effectively makes the league a four horse race, which can make the comp rather boring and (until recently) predictible. The French league (Ligue 1) was even worse with Lyon dominating (until recently) for years! Imagine if the Bulldogs, Storm, Broncos and Raiders had the money to purchase the top players (without a salary cap). Wouldn't it get boring having the same 4 clubs winning year after year? There is also another aspect, some of the "smaller" clubs may take financial risks in order to compete, this could send them broke or they could be forced to sell to a private consortium. Who knows, you may end up with Clive Palmer! The EPL has lost most of its local connection as the teams chase more money usually from foreign investors. The local connection that Rugby League clubs have with it's supporter base is the most enviable part of the NRL and should be protected at all cost. So in a nutshell; Salary Cap can be bad for individual clubs and the top players but is good for the stability of the game. Removing the salary cap may be a mixed blessing that could eventually turn the game into a money making venture, just look at Liverpool and Portsmouth in the EPL. If anything is to happen to the salary cap, it should be an increase as opposed to the caps removal. That's my view anyway.
TJ
Guest
DOW - great post - after all this current drama, this is one thing the NRL need to address, and people need to raise this as an issue. I'm a passionate Storm supporter although I am an AFL man. My passion for the Storm can be attributed to the fact that their success has been built on great recruitment and player development, not on buying big name players. Let me firstly say that the Storm broke the rules and need to be punished. And I do believe in a salary cap because it does stop EPL principles of buying teams. But if we move beyond that and address the other issue, which is the current salary cap needs reform. It penalises teams that have great junior recruitment and player development. The current system basically says to a team that has developed a handful of genuine stars, having recruited them at an early age, that they need to get rid of one or two at their prime, in their mid 20's, after 100-150 games with the one club that they need to go somewhere else. It rewards the other team's mediocrity. Now I'm not too close to the structure of the NRL's salary cap, so these may already exist and I might be speaking out of school, but they need to have a veteran's list component as well as a franchise/marquee players component, however they are structured. Those marquee players have to have played x number of games for the club or been there, as you mention DOW, for x number of years. Part of their salary is not counted. It also means a guy that has just hit 30, been there for 10 years, can finish his career off there without having to move, which happens a lot with older players in the NRL going to England. It is much more enticing for a club to pay a 24 y.o the same money than the 30 y.o., however if the 30 y.o. had part of his salary not included in the cap, it would reward that players loyalty. Every other major league that has a salary cap, AFL, NFL, has these components.
Dogs Of War
Roar Guru
The salary cap as it stands now does not do enough to assist clubs who develop their players, and put plenty into juniors. There really needs to be more concessions for long service at a club (at 6yrs 5% discount, every year after another 5%), and juniors who played more 2 or more junior grades for the club (Jersey Flegg + Toyota Cup), given say a 10% discount, until that long service concession cranks in. Not to mention the 3rd Party sponsorship cap needs to be raised to $500K so that clubs who have the funds can provide it in a legal means. It won't stop clubs entirely looking to get an advantage, it will just means it's less likely. It also means that substantially raising the cap is less required, not to mention that there will be less player movements between clubs, which is good for the game.
Julie
Guest
The market has a pretty good way of sorting itself out. No thought has had to go into salary cap alternatives (you don't have to be too creative to think of a few) because it's now so entrenched - there's serious doubt, however, that the salary cap would survive a legal challenge. To say they player payments are not 'subjected to an artificial limit' because the 'play for a sum which is contractually agreed apon with the club' is simply naive and does not reflect an understanding of how a free market works. Of course a contractual agreement on a maximum fee payable is an 'artificial' limit when negotiated in the context of a salary cap. It's a form of price fixing which we don't tolerate anywhere else in the market.
Tinnie
Roar Rookie
Julie, whether the players get payed any money at all firstly relies on the survival of their club and the competition. There very well may be a less restrictive ways to create an even competition but i'm yet to hear one, in fact for all the times i've heard complaints in regards to the salary cap i'm yet to hear a SINGLE alternative suggestion except for getting rid of it all together. No salary cap would result in the league bottlenecking into maybe 3 or 4 superclubs that are far more financially superior than the rest, taking a stranglehold on the games best players. This could also force other clubs to spend money which they dont have to attract players they could never afford in the first place or pay their players much more than they're worth to aviod being poached by other clubs. These players dont get paid peanuts, nor are they subjected to an artificial limit, they play for a sum which is contractually agreed apon with the club. If they are not happy with how much they're payed in the NRL they have the option to go to super league and demand more money, they have the option to go to French Rugby and demand more money or they have the option to go pusue a career in another field that may be able to satisfy their financial needs.
mushi
Guest
Julie the cap is set to the earnings of the league which means it is set to the contribution players can make in a commercial sense. All the cap does is stop the commerical inept ceos from bankrupting their clubs
alan nicolea
Guest
Tinnie I completely agree with you there. The average first grade player receives match payments of $6,000 plus their contract. The likes of Thurston, Inglis, Smith and Slater are easily getting beyond $400,000 yearly (who knows how much they have been recieving these past few seasons), coupled with Test, finals and Origin payments aswell. What more do these guys need? I mean, $6,000 for eighty minutes of football on a weekly basis is terrific money on its own, let alone with a contract to go on top.
Julie
Guest
Tinnie, for you personally the salary cap is not a problem because you are not a player seeking to extract the market value of their talent and being limited by artificial market caps - you're looking out only for your own self interest in wanting to ensure that all current clubs survive and can compete on the ground, regardless of how objectively unviable they might be. There may be less restrictive ways to ensure a relatively even competition - salary cap is a cop out and an unfair one for players who can't earn what they are 'worth' in their short careers (call it greed if you like; many would call it common sense to try and ensure your own personal and familial financial security into the future by extracting the best salary you can with the talent and dedication you have). No other professional is subjected to this artificial limit. CEO's of companies, engineers, lawyers, accountants etc all earn what the market dictates their talent is worth. Salary cap is a clear restraint of trade and requires clear justification from the NRL to prevent it being struck down as illegal. They failed the last time their restrictive practices were challenged in the courts. I hope they are challenged again.
Tinnie
Roar Rookie
I must that i do find it confusing sometimes, on one hand each week over the last fews years i've heard fans comment happily on how close the competition is, how hard it is to predict these days and praise how lucky we are to see the quality of play we're priviliged to witness from these teams from week to week. On the other hand every now and again the ugly phrase "salary cap" rears it's head and people spit in disgust at how it is an unfair system that penalises successful teams. At this stage it is a necessary evil im afraid and no matter who we support, we're all in the same boat. It was not that long ago that we were worried about the mere financial survival of some clubs due to the economic crisis, im still a firm believer that had the salary cap had not been in place some these clubs would have gone under. For me personally the salary cap is not the problem, greed is. When i hear about guys like Thurston and Mason bring up RU and Super League as a leverage in their payment negotiations, they should be handed their suitcases and shown the door. I guess what im trying to say is that the salary cap not only gives us an even competitive competition, it also helps stabilise the competition financially as a whole.