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Since the establishment of the National Rugby League in 1998, following the Super League War, the salary cap has been imposed to provide structure to player payments within the league.
The implementation of a salary cap has proven important in promoting parity within Australian and international sporting competitions. It is essential for the NRL, as it ensures all 16 teams can field a competitive squad each season.
Unsurprisingly, there are salary cap breaches each year which can be in relation to anything from overspending on players to the incorrect entry of documents.
In fact, since the implementation of the salary cap, every single season has had at least one salary cap breach.
In 2013, seven teams were cited for breaches ranging from minor (Parramatta Eels – $4700) to more serious in nature (Cronulla Sharks – $150,000).
However, there have also been some more significant salary cap incidents, with the 2002 Bulldogs and 2010 Storm seasons resulting in major club consequences.
Both salary cap incidents were breaches in excess of a million dollars and left both clubs at the bottom of the table for their respective seasons. Melbourne was also stripped of its team awards from 2006-10, which included two premierships and three minor premierships.
The NRL has a specific salary cap authority to review club activities and since the Melbourne storm scandal all players are required to sign statutory declarations regarding their club-related income.
Though yearly breaches aren’t exactly encouraging, the NRL is constantly attempting to improve their salary cap monitoring systems.
It is the billion-dollar television rights deal that is the main factor in re-energising debate over the salary cap.
After much negotiation between the NRL and Rugby League Players Association (RLPA), the salary cap was set at $5.85 million. Luckily for fans, this came with an absence of industrial action.
Up until 2017, and the end of the TV deal, the salary cap is expected to continue rising to $7 million.
The major salary cap issue, as viewed by the league, is the inability to retain superstars when players are recruited by other leagues and sports.
This has led to the NRL discussing the implementation of a marquee player allowance to compete for the signatures of stars like Sonny Bill Williams and Israel Folau.
Evidently the marquee player allowance would be an important addition to the salary cap and this has been recognised by the NRL.
Utilising a designated player system, similar to some American sports leagues, will allow NRL teams to register a single player on their squad for salary in excess of the cap. This rewards star players with a higher salary and boosts the marketability of the league.
However, there should also be discussion over the implementation of a loyalty allowance.
Under this allowance, players who have remained with the same club for an extended period of time (e.g. five seasons) would be eligible for a salary increase which does not affect the club’s cap.
This would lower the potential for other clubs to poach players from other clubs in most situations, as the player’s current club would be able to offer the player a higher salary.
Another interesting potential change is in relation to contract incentives. Though a few players do have game-related elements in their contracts, incentives are not as prevalent in the NRL as other sporting leagues, particularly those of America.
Incentives complicate the nature of the salary cap, but give lesser known players the opportunity to earn a higher salary for improved performances within the season.
With the amount of revenue the NRL now earns with its TV deal, players should feel entitled to an increase in the overall salary cap.
This can be seen with the change in the NRL minimum wage, which increased from $55000 to $80000 this past season. However, to ensure that clubs have improved ability to retain players, the implementation of marquee and loyalty allowances would be vital.
These changes will see the salaries of NRL players come into line with the salaries of other professional athletes in Australia. With this, the competitiveness of the NRL and clubs in player negotiation will be greatly improved.
The value of players in the 21st century has noticeably increased and the salary cap will soon evolve to recognise this, whether it is through cap increases, contractual incentives or certain allowances.
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