Memo David Gallop: it's time to Scrap the Cap

By Ryan O'Connell / Expert

The salary cap is always a hot topic in the NRL, particularly last year when the Melbourne Storm were revealed to have systematically rorted the NRL cap, and thereby ruled to have cheated their way to two titles over four years.

The subject was once again in the headlines in the off season, as many pundits (especially NRL salary cap auditor Ian Schubert) wondered how the South Sydney Rabbitohs could afford to sign superstar Greg Inglis and still remain under the cap.

I don’t think I need to explain what a salary cap is, but I will point out the NRL’s two key motivations behind implementing it:

1. To prevent teams from going bankrupt, curtailing costs, and thereby saving clubs from themselves (ie: stopping them from spending more money than they can actually afford).

2. To ensure parity between teams, thus preventing a wealthy club from simply signing more top level players than its rivals, which ensures the competition is a level playing field.

In essence, the theory is that the salary cap exists to make the game better. This is ironic, because the biggest issue that critics of the cap have is that it actually harms the game overall.

So who’s right and who’s wrong?

I guess it all depends on your perspective. If you look at it from the NRL’s point of view, their previously mentioned salary cap objectives have been met.

Despite a few clubs experiencing financial difficulties, it’s been a long time since a club went bankrupt. And in terms of parity, we’ve had 9 different premiers in 13 years. So the NRL claims a moral victory for the salary cap, believing it has done its job.

The other side of the argument has critics asking how the cap could ever possibly be perceived as making the game better when it’s responsible for the constant flow of talented players leaving the game due to them receiving a more attractive financial offer elsewhere, and thereby diluting the overall quality of the sport.

In this regard, the most devastating player drain has always been the English Super League.

Shockingly, there are close to a hundred players with NRL experience playing in England this season, many who have played representative rugby league – including ex-Australian captain Danny Buderus.

This season he’ll be joined by players the caliber of Ryan Hoffman, Willie Mason and Luke O’Donnell. Whilst England has always been a lucrative lure for ageing players coming to the end of their careers, of late, younger players in their prime have also been a part of the yearly exodus.

This should be ringing alarm bells for the NRL.

The NRL has also lost a small, albeit elite, contingent of players to rugby union.

Wendell Sailor, Matt Rogers, Lote Tuquri and Ryan Cross have all represented the Wallabies, while rugby league internationals Mark Gasnier, Sonny Bill Williams, Luke Rooney and Craig Gower, to name a few, fled to Europe. Whilst some of these players returned to rugby league, the fact is, the sport lost them during the prime of their career.

As if all those losses weren’t enough to deal with, the game is also suffering at the hands of AFL poaching, losing young stars Israel Folau and Karmichael Hunt to AFL.

If all those losses can be attributed to the salary cap, can it honestly be making the game better? And is it really working as designed anyway?

It’s true that we haven’t lost a club to bankruptcy for a while, but the NRL’s proclamation about parity is a little misleading.

Yes, it is a fact that in 13 years, we’ve had nine different premiers. But those 13 seasons include: three premierships by proven salary cap cheaters the Melbourne Storm; a premiership by the Canterbury-Bankstown Bulldogs, with the exact same squad that was ruled way over the cap the year before; a premiership by the Sydney Roosters in the same year they were fined for not disclosing third party payments to players; and a premiership by the Newcastle Knights, who were fined one year later for being over the cap.

In fact, in all, there have been a whopping 68 separate breaches of the salary cap since 2000, ranging from minor to very serious.

And three premierships were won by the Brisbane Broncos, who have the distinct and unfair advantage of being a one team town.

Therefore, the NRL should be careful about banging on too loudly about parity. In 13 seasons, there have only been two real underdog winners: the Penrith Panthers in 2003, and the Wests Tigers in 2005.

Other than that, a fairly cashed-up club, or one that cheated, has won every year, or 85 percent of the time.

Which means we can dismiss the notion that parity is vital to the success of the sport. After all, every year, everyone knows that only Manchester United, Chelsea, Liverpool or Arsenal are likely to win the English Premier League.

Yet that doesn’t seem to have a negative effect on crowds, sponsorship, TV rights, media coverage, and so on.

Therefore, it’s time to remove the salary cap. And whilst there will be opinions that doing so will simply see the rich clubs just get stronger, I have four counter arguments:

1. The rich clubs already are stronger, and have won 85 percent of the premierships.

Don’t fool yourself into believing anything else. Even if the rich clubs don’t currently spend more money on players than opposition clubs, they spend more money on buying the best coaches, having the best resources, the best training facilities, better travel arrangements, access to more sponsors, more corporate connections, and so on.

And dare I say it, they’re also better equipped to circumvent the cap. Trust me, the stronger clubs are already stronger.

2. Don’t we want the best competition possible, rather than the most even competition possible?

Surely we want the best players playing in the NRL, regardless of what club they play for? Fans would be inclined to watch more than just the games their team is playing in, because the standard would be so high.

Quite simply, with a higher overall standard of competition comes bigger crowds, more sponsors and higher TV ratings – which equates to more money for everyone.

3. When it comes to evening out the competition, it’s important to remember that you can only have 13 players on the field at one time.

And more importantly, they play in specialised positions.

Yes, a rich club might be able to afford Jarrod Hayne, Billy Slater, Karmichael Hunt, Kurt Gidley, Josh Dugan, Preston Campbell, Matt Bowen, Darius Boyd …

But they’re ALL fullbacks.

If rugby league is able to entice the talent back from English Super League and rugby union (and AFL), the entire competition will achieve evenness through the amazing depth, overflowing to all clubs, at all positions.

4. Every sport is littered with examples of teams that tried to ‘buy a premiership’ by simply purchasing all the best players – and then didn’t win.

Sport, and rugby league, isn’t about having the best players, it’s about having the best team.

It’s time for the salary cap to go, thus allowing the sport to reach its full potential.

The Crowd Says:




can anyone help me on the year and date this happened on? please & thankyou.




St George, who won last year, are not a rich club, and have not been found to breach any salary cap (yet). I think what we dont realise is that there isnt much money to go around. The A-League, NBL, Super Rugby, Cricket - basically all the comps except the NRL and AFL - have had teams in significant financial peril, and rely heavily on the governing bodies for support. The Fury and GC might not make it next year, the NBL lost a bunch of teams, the Reds and Waratahs have had significant money kicked into them recently. It costs a lot to run a sporting team. Raising the cap might seem great, but what people really love is the club. Of course we dont want to lose players, and the game is finally doing a lot to build its revenue streams, but there really isnt the money there at this point.


King of the Gorgonites

Roar Guru

I think wall-nut is exagerrating a bit. but i do expect wages (for European rugby and AFL) of 2M+ within 4 years. Dont hold me to this, but from memory France has a salary cap of 14M euro. England has a cap of 4.5 pounds. a big difference. so yes france can easily out-pay the NRL. so can england. but england is not in the market nowdays to pay over inflated wages. the RFU has stated that if you want to play for England you have to play in England. that will help keep wages down as players will have to play in england. they now have the jersey to consider. the irish provinces (excl. Connacht) have the financial capacity to out-bid the NRL. but once again its not their MO. as theey receive a larger proprtino of their revenue from the IRFU, they are to encourage local grown players. they do buy internationally, but nothing extragavant. scotland does not have the fincial means. Wales have cut back on paying inflated palyers, hence we are seeing more Welsh players head to england and the like. Italy - the two new magners leagues team are well financed, but are more inclined to spend their money on luring italians are french clubs back to italy. Japan - does have the financial clout to out-bid the NRL. NZ - through third party sponsors does have the clout to out-bid the NRL (see SBW).




That's a big 'if' Wall-Nut. How many Union comp's in Europe currently can significantly out-pay the NRL? I'm not an expert but I think France is it and it's not by the margin you're describing. Is there really an expectation that Union will grow by these amounts in established markets? Why?




So what this guy is saying that despite growing crowds significantly, despite growing sponsorship and TV viewers, despite saving clubs from going bankrupt we should get rid of the Cap and do something else. Real intelligent stuff.



Roar Guru

That's not actually correct. MLB employs an extremely soft salary cap, where you can pay the players whatever you want, but if you pay above a certain figure, you have to pay a luxuary tax. The Yankees regularly surpass it, and pay luxuary taxes, but they don't 'breach' it or pay fines as they aren't doing anything illegal. I agree that they buy flags, however they aren't breaking any rules.


Parkridge Panther


I have n't read all the posts. The NRL states that the salary cap it is to allow for a level playing field so that the rich do not plunder the poor. In other words create a scene where the rich will look at other avenues to obtain what they want. Melbourne was forced to create a system, that came undone in 2010, so they could retain players that they had developed. The rich are still rich: The poor still are poor. Nothing has changed. In a letter to the the NRL during the Melbourne fiasco I stated to them that the salary cap, which cannot be policed, does exactly the opposite. It attempts to bring the rich clubs down to the same level as the poor clubs and then creates a system that cannot be policed adequatley. In isolation the salary cap does not work, IMO. We then, as has been debated and highlighted through the media, require other measures as well: Increased salary cap, Increased third party deals, Transfer fee (payable to the losing club), Discounts for length of service, Junior development exemptions etc etc. Again the rich will benefit the most. How are the poor clubs ever going to become fiancially viable when the problem is revenue based. The inability to produce income mainly from sponsorship and membership. Brisbane generate over $12 million in sponsorship alone. The proposed new Brisbane club has, allegedly, $10 million lined up. Newcastle have a new owner at $10 million a year. The salary cap does nothing to address the actual problem besetting the poor clubs. Cronulla is no better off under the present system, as an example. It is still a bottom of the rung financially hamstrung NRL club that has few supporters and even fewer sponsors. The present setup of the salary cap has failed miserably IMO. In all other business it is the strong who prosper the weak wither and die. All we are doing at the moment is proping up finacially failed clubs.




Cap or no cap, if league does not grow internationally it will suffer either way. For the time being the cap must stay. The big problem here is league has a sport similar in union. Not the same but similar and as union gains international strength, their pay cheques will grow. European players will receive payments of 5 million plus in years to come, what do you think will happen when a NRL player is receiving, let's just say for argument sake $900,000 per year. When union is paying 5,000,000 plus....... They will leave in droves. -- Comment left via The Roar's iPhone app. Download The Roar's iPhone App in the App Store here.




Those are the facts Ken. it is a pity that the cap isn't good enough to keep teams together and YEP, once the season kicks off the kids will adopt someone else, they just had a bad year!! lol. and thanks Cool




you are right. the third party loopholes should be closed.




Increasing the rep payments substantially? That's actually a very, very good idea. And you're right, it could help alleviate a lot of the problems, because it's really the upper echelon of players that need to be better looked after. State of Origin generates a hell of a lot of money, but I seem to remember Shane Webke saying a few years ago that almost none of it makes it's way back to the players who represented?


r Cool


because they deserved better pay! and the Salary capwas much too restrictive to keep a great team together!! - that's what is wrong with it as it stands.




yes and the clubs that genuinely can't afford to spend anymore then they are doing regardless of a cap wouldnt benefit at all. an adjusted raise on the cap wouldnt help them if the cap or below is their limit i think increasing rep payments is a must also and would fix a lot of issues very simply. a quick way for the games elite to top up your earnings by a coupla hundred independent of who they play for (and keep them in oz). you could easily make it include representing nz as well.




Peter - you'd obviously have to take that into account when forming the rules. But developing juniors in general has to be a good thing, no?




I agree with what everyone is saying but wouldn't allowing a dispensation for clubs to keep their juniors just lead to the wealthiest clubs starting their development earlier and spending big money to poach young stars to get around the salary cap?




One fundamental flaw: If we remove the caps, how sure are you the [possibly] higher amounts offered here are still not as good as what the Poms and Frogs offer? In considering that make sure it hss to be across the entire player roster, not just for the top ranked players. Hanging on to an overpaid "star" (even if underperforming) could hurt the lower ranks (both directly or in distribution over the league) , particularly in some of the less well off clubs, i.e. Sharks, Warriors.


Mark Young

Roar Guru

I would hate to end up like the Enlgish Premier League, with five super clubs, an occasional bolter bankrolled by a mining millionare and a dozen good clubs that are never going to go down, but are never going to win anything either. Right now, you almost every NRL fan is supporting a team that could win a Premiership. How many EPL fans can say that? Keep the cap, (but make it easier to keep local juniors).




yeah i reckon tho more likely is 1-3 will spend over by around $500k to $1m (brisbane melbourne for starters) another 3 maybe by between 200 and 300 thousand and the rest will try and stay just under it so they get a slice of the over payment pie. no point just going over by a little bit cos you'd miss out on the bonus cash. also just noting i actually said they'd only exceed it by 500k but then would have to pay another 500k to the nrl (total $1m) bit of a can of worms to open i think. it might help but it could just as easily not help depending on a few unpredictable factors (how each club approached the situation)


The Bush

Roar Guru

"With News Ltd slowing with drawing from thier association with league, the money will get tighter." By all accounts, once the new television deal goes through, Rugby League will have far more money than ever. The cap will certainly be increased. So I'm not sure where this "the money will get tighter" statement is coming from. "The cap is essential, why does the league public thing we need full time professional players. What happen in the old days? Where the crowds there and passionate about the game? yes" Absurd comment. People were passionate of course, but there was also almost no competition for their dollar or for the talent pool. In fact professionalism, even in its most basic form in 1908, is the reason why Rugby Union died and Aussie Rules was "beat off" by Rugby League. Taking that into the modern context, I can guarantee that people would move on from Rugby League if it wasn't professional, because all the best talent would be playing other sports and those sports would be "faster", "bigger", "better" and adequately financied to win over more fans... "Where the players worse? From all accounts they were harder and tougher, probably not as fit but regardless the game survived and was successful" It's called rose-tinted glasses. The modern players would bash the s#!^ out of players playing the game twenty years ago. They're bigger, faster, and more athletic. The talent pool is larger, kids are trained at an earlier age and "perfect" their game at an earlier age. In fact Rugby League is one of the few sports in the world were retired players (at least those over 50) freely admit that what guys like Hayne, Thurston, Inglis and Hodges do now they could never do and never compete with. All this is possible because of professionalism. Sure it's not as romantic, and the players are less "tough", but that is the price you pay. The players are preceived as less "tough", because now an injury can cost you a lucrative career, but as far as I'm concerned that's a small price to pay for the kind of game we see now. I'm all for the salary cap staying (increased), but I'm not sure of any of your reasoning...




'Why does league keep thinking it has to compete with AFL, rugby and soccer.' In raw money paid to players? I don't think anyone is suggesting it has to exactly. Soccer players in the EPL are paid many orders of magnitude more for a variety of reasons and that's not going to change. Obviously there will always be some comparison to AFL considering that these two comps dominate the Australian sporting landscape but I don't think there's any major driver there (nobody is expecting mass player transit between the games despite the Folau/Hunt hype) In total RL already pays far more in player wages than RU in Australia, although the top 10 players in Union would earn more than the top 10 in League right now. Currently there's some big money in France but that's a relatively new development, who knows if it will be maintained. If you read the comments on this thread you'll notice that people are mostly concerned about losing their team's players to other NRL teams and sometimes ESL because they can't afford to keep them under the cap. Players signing with other codes makes for big headlines but it's rare enough not to be a major concern.

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