John Hartigan, chairman and chief executive of News Limited (left) with Chief Executive Officer of the National Rugby League David Gallop (centre) and Melbourne Storm Chariman Rob Moodie. AAP Image/Tracey Nearmy
Over a working (cough, cough) lunch I downed some lovely Hunter Reds along with my mates Jack D and Johnny W, while we had an interesting discussion. Aside from Jackie and Johnny, my newly acquired mates included a couple of lawyers and a couple of accountants.
As in all these high-powered meetings, things quickly turned from the day’s agenda to news, and then sport.
We discussed whether or not, when the chain broke, should the riders push to get the yellow shirt. The World Cup was discussed at length, as was whether the AFL management needed shouting for being too good, Rugby League and Ricky walking away, and why he didn’t do it earlier.
We then moved back to the Tour and how brave Cadell was.
So we all let our thoughts be known and solved many of the world’s problems. Then the topic that took up much of the afternoon and a few bottles of those lovely Hunter Reds cropped up: the salary cap used by the football codes, aside from rugby, and whether or not they were legal.
The lawyers told us accountants that they believed that the salary caps were in breach of the Trade Practice’s Act. More, if challenged, the courts would rule in favour of players.
Well, well, well, I said, you mean only the goodwill of the players is keeping the salary cap in place?
Yes, was the reply.
This got me thinking. My poor A-League in its infancy could not survive without the cap, as my beloved Mariners could never compete against the evil Sydney and Melbourne teams. Meaning, perhaps the Choppers [Sydney] and the Tard’s [Melbourne] would rule forever.
As the reds [that’s me, others where on the Jacks and Johnnys] were taking effect, the volume of our discussion and sometimes unexplainable laughter came to the attention of the hotel staff, who threatened to cut off the supply of refreshments unless we quietened down.
The draft got discussed and the evil AFL [remember it’s Sydney, and we had been well refreshed] again was considered lucky not to have any challenge.
We finished with no real agreement, at the request of the hotel manager, who seemed quite pleased we left.
Does anyone have any support or evidence that the legal guys were wrong in that a salary cap is in technical breech of the Trade Practices Act?
Otherwise, aside from union, we are all living on the goodwill of the various players unions.
Midfielder
Guest
Sledge Interesting .... so Storm ... challenge that the Salary Cap is not enforceable at law .. thus counter we have broken no rules as the rules are illegal in the first place... I like it...
sledgeandhammer
Guest
Interesting to consider this in reverse. Is breaking the salary cap illegal?
oikee
Guest
Hey Mitch, you post articles, put one on about the video refs. I want to give them a blast. :(
oikee
Guest
Yes, agree.
jiggles
Guest
Really this is also a broader economic question regarding theories in efficient markets and market failures. theoretically, and very basically, one of the reasons markets are efficient is because one holds property rights. i.e. a player's skills and talents are his 'property' to be sold on the market to the highest bidder. theoretically player's with more talent are payed more, while players with less talent are payed less, so a club could have one Jarad Hayne type player or 29 Braith Anastas which would be the same value as a Hayne! and thus the market is efficient and the NRL/AFL/AL live happily ever after and all clubs never go broke… of course this is all theory based in a perfect world! this is when public policy comes in to play, i.e. the Salary cap, because clubs cannot live within there means and there has to be regulation on what a players property is worth. this makes the market, in this case the comp, much more efficient (even) and in my belief better! personally I am surprised such a deep an intelligent topic is being discussed on the road ahaha! well done to all
Stormin Red
Roar Rookie
I think that that the leagues would be OK if this ever was raised. The clubs are all entering a competition run by their respective leagues. I know the NRL and AL (not sure how AFL works, I think its the same) offer a certain number of licences to interested clubs to take part in their competitions. A-League is a particularly good example for this with the spot the Heart and Rovers have been given. There were two or three different consortia in each city bidding for the licence. The different clubs all apply for the licenses within those competitions knowing fully that as part of participation in the league they will abide by the leagues rules, this includes the salary cap. The only way I can see for a team to successfully challenge a salary cap would be to form a break away comp that runs without a cap. This won't happen though because there aren't enough stable clubs in any of our highest leagues to prop up an entire competition of rebel franchises (look at how long Super League lasted).
Vinay Verma
Roar Guru
Sheek,I did not miss your sledge about drinking and the Barossa is as good for sprinking my ashes as Roseville. Try the Turkey Flat Shiraz.
Jay
Guest
Melbourne has previously had 'feeder' cubs in Cabramatta (Sydney) and Brisabne Norths - thats where their recruitment agents sign talent from NSW and QLD. Now they've starting to get more homegrown players, and a signficiant portion of their u 20s and junior squads are polynesians and kiwis (and one brit) who grew up in melbourne... They have the best structure in my opinion. It wouldnt surpise me if (based on the assumption they still have a team in the NRL which is well funded) in 5-10 years time they have more 'home-grown' players than the Swans, which is a fair achievement for a RL in the AFL heartland. As for Perth - they have a junior team consisting of Perth based players playing the NSW reserve grade. If and When they get admitted - they will either rely on these players OR sign established players from other NRL clubs or Super League clubs in England/France. Im not sure about the AFL rules, but GC17 and GSW get to sign 1 contracted player from each club - well Perth would be able to sign 25 contracted players from any club(s).
The Link
Guest
Sheek, agree re Shiraz. Best bet from the Hunter is a Semillion, preferably over 5 years old, superb.
M1tch
Roar Guru
Melb Storm? They sign players from anywhere and everywhere.
Ted Skinner
Guest
I seem to remember that a restraint of trade my not be illegal if there is a public good or benefit applicable. Sometime ago a Judge made a pasing reference to having an even competition might fall within the public benefit test . However this was Obiter Dictum & should not take as gospel. Found this: http://www.sportslawyer.com.au/uploadedFiles/1204522022859-1465.pdf
Rimmer
Guest
Sporting entities and Trade Practices Law: what is best and fairest? http://legalonline.thomson.com.au.ezp.lib.unimelb.edu.au/jour/resultDetailed.jsp?curRequestedHref=journals&contentSourceHref=journals/TPLJ/volumes/7/parts/4/articles/201/fulltext&hitListPageContext=http://legalonline.thomson.com.au/jour/resultSummary.jsp?freeText=Trade+Practices+Act+Salary+Cap___&searchId=2&hit=10&hits=15&articleType=fulltext&freeText=Trade%20Practices%20Act%20Salary%20Cap&titleCode=Seatplwibaf Australian approach In Australia, the principal means of enforcement of the rights of restricted athletes has been by actions based upon the common law restraint of trade doctrine. This is because attempts to bring actions under the Trade Practices Act have to date been largely unsuccessful. Although professional sporting bodies may be considered "trading corporations", and thus be within the ambit of the Act, allegations of contravention of the Trade Practices Act have failed because the market in which clubs compete for the services of players is not, under the appropriate provisions, one to which the Trade Practices Act applies. Under similar provisions as in the Commerce Act, the proscription on a corporation22 from giving effect to a provision which is likely to have the effect of substantially lessening competition under s 45 of the Trade Practices Act 23 is inapplicable to the club-player market. The Trade Practices Act defines competition for the purposes of s 45 as "competition in any market where a corporation acquires services or would be likely to acquire services".24 "Services"
Redb
Roar Guru
it quite clearly doesn't. The CBA allows the technicality of law to be over-ridden as both parties agree.
Jay
Guest
Personally, Im very comfortable with the NRL not having a draft. We've got a pretty good path to first-grade football. Kids play for clubs or school and the onus is on clubs to identify and sign talent at the age. It suits league as well. Many polynesian parents dont want their kids to move away from their famlies, while others can grow up and play for the clubs they've supported growing up. Not having a draft also takes out the issue of tanking, and the concessions that are handed out when new teams join the comp.... Not having a draft also allows clubs to restructure their squads quite quickly... In the AFL, the lower clubs get the best junior talent, but that normally takes a good few years before the kids are reach their potential, meaning these clubs are generally out of the top 8 for a while. While in the NRL, theres alot more flexibility.. two years in a row, last years wooden spooners have rocketed into premiership contention, and that's not unheard of. There are many faults - some clubs prefer to poach talent as opposed to developing it.. but as a whole, its too ingrained in the NRL that its become a well accepted principal.
Redb
Roar Guru
Accepting that the AFL and NRL player pools are different. The question can also be asked in reverse, if Terry Hill had not challenged the draft would the NRL have been better off?
Jay
Guest
I would have thougt that the law would override any such agreement. If a company employe foreign workers and they had an agreement to be paid lower than the minimum salary - i would have thought that should a worker challenge such an agreement in court, the court would be obliged to look at the leglisation, which in some cases would override the contractual agreement. mind you im no lawyer...
mushi
Roar Guru
the other thing to remember is that restraint of trade is allowable so long as it is reasonable.
Jay
Guest
Terry Hill in RL successfully challenged the draft in the ARL (as it was known back then), so that might be some precedence if one were to challenge the AFL draft.
Tom of Brisbane
Guest
Isn't there a precedent here? I think you'll find that the NRL (NSWRL at the time probably) had a draft in the 80's. Terry Hill challenged it in court (because he was drafted by Wests and didn't want to go) and it was found to be a restraint of trade. Thats why the NRL doesn't currently have a draft. Pretty sure that both the draft and the salary cap are a restraint of trade, and both exist only because they haven't been challenged in court. As to whether a CBA overrides the federal legislation (Trade Practices Act), not a lawyer so not sure. Guess it would make an interesting court case
mushi
Roar Guru
Midfielder I understand the Bosman decision but struggle to see the relevance here as players have free agency in the NRL. Players unions overseas have challenged the cap..and failed but like the Bosman decision that is irrelevant because it isn’t under Aussie law. My discussions with lawyers (I did law but I am not a lawyer) on the topic cap effectively amounts to an enterprise bargaining agreement and that the cap is an internal restriction within the league. I would be staggered if they could successfully argue a restraint of trade when players have gone and applied their trade in other competitions.