It’s time to fix a broken salary cap

The salary cap doesn’t work. The salary cap was designed to achieve two primary things, yet it fails to do both.

1. Keep the competition even
One of the key aims of a salary cap is to stop the rich clubs buying up all the talent of the weaker clubs. As much as the NRL heavies boast about an even competition (compared to the AFL it is), it is not.

Third party agreements allow certain clubs a distinct advantage over other clubs. Even as a Broncos fan, I can admit that, being in a one-club town, the Broncos have a distinct advantage when it comes to third-party agreements. Clubs like the Roosters and Bulldogs also have a distinct advantage over say Canberra, Newcastle and the Gold Coast.

The problem with trying to tighten rules around third-party agreements is we are actually preventing money from coming into the game. We should be making it as easy as possible for businesses to invest in the game. The idea that a business can’t sponsor a player and also get some free tickets from the club is absurd.

The whole area becomes a mess which can be easily exploited and hard to track. The fact that Parramatta are in their current mess reflects both on the absurdity of the system and also their poor management in not keeping it at arm’s length like the other clubs do.

2. Stop clubs from going broke
One of the key arguments for the salary cap is that clubs will go broke by over-spending on players. But clubs are going broke anyway. Gold Coast, Newcastle, Wests Tigers and St George Illawarra are all relying on support from the NRL to prop them up.

The salary cap hasn’t prevented bad management at many clubs resulting in a poor financial position. The clubs themselves need to be responsible for good fiscal management and not overextending themselves. This is not a function of the salary cap.

It’s time for a total overhaul rather than just tinkering around the edges. I propose the following changes to the salary cap. These are just a starting point for discussion, but would shape the basis for a system that brings maximum income to the game, while keeping the competition fair.

1. The NRL provides a set base player payment
The NRL provides clubs with a grant each year and they should nominate a flat figure, let’s say $8 million, that can be used for the top 25 or 30 players’ base salaries. Let’s not overcomplicate things with marquee allowances and long serving player allowances and motor vehicle allowances and any other type of allowance the NRL wants to throw in.

I would even be open to the idea that these base salaries come directly from the NRL to the players. Then you never get the scenario of the past where Gold Coast and Newcastle players were not paid on time.

2. Unlimited sponsorship deals for players
This should include both club sponsors and third party sponsors. The player’s incomes should not be limited and they should not be prevented from working with sponsors. We need to bring as much money as possible into the game and clubs should be given license to be creative and bring as much money in as they can.

No doubt some clubs will be able to bring more money in than others so we do need a way to keep the playing field level, but reducing player’s incomes and bringing all the clubs down to the lowest common denominator is not the way to do that. While players are handsomely rewarded, they also only have a limited number of years to earn money from footy. Other than the top five per cent the rest don’t make a living off footy once their careers finish.

3. A player points system to keep the competition even
Each player would be assigned a simple points value based on how many first grade games they have played and if they have played rep footy and then clubs would have to keep under a nominal cap figure.

I haven’t done the detailed maths yet and some work would have to be done to make sure the numbers added up but it would work something like this:

Each club is given 120 points for their top 25 or 30 players. Players are worth the following:

Yet to debut: 0 points
1 – 50 games: 1 point
50 – 100 games: 2 points
100 – 150 games: 3 points
150 – 200 games: 4 points
200 – 250 games: 5 points
250 + games: 6 points

Current (last two years) Origin or international players (from Australia, New Zealand or England) would add five points to their value. I wouldn’t include other international football so clubs don’t ask their players not to play to avoid boosting their cap value. Most of the players that play for Fiji, Samoa, Tonga and so on would not make a top-tier rep team.

There would also be discounts available for the following:
• Player made their debut at their current club: minus one point
• Player has played 100 games at one club: minus one point
• Player has played 200 games at one club : minus two points
• Played 200 + games at NRL level: minus one point
• Player has played 300 + games at NRL level: minus two points

So a player like Cameron Smith would have a base points value of 11 points. For another club to sign him he would be worth nine points and to the Storm he would only register as six points.

Similarly, Paul Gallen would have a base value of 11 points and if another club wanted to sign him they would only get the one point discount. However, if Cronulla want to re-sign him, it only costs them seven points. And they might only pay him a base of $300k and find the rest in sponsorship as the most visible face of their club.

The idea of the points system is that it rewards loyalty and player development. If a club goes over the points cap in a season because three or four players made rep debuts or clocked up more club games that is ok. They can stay over, but just can’t sign any new players until they come back under the points cap.

4. A cap on the number of rep players per side
I would also have a representative cap of six current Origin or international players. There were 87 NRL players who either played Origin or international footy for one of the big three nations in the last two years. That’s an average of 5.43 players per club.

I would put the cap at six for the start of a season. So if a club has six rep players and then two players they’ve developed play Origin, they can’t sign any new ones the following season. They can still keep the players they have developed but can’t chase any new rep players unless they offload some and come back under the cap.

So, for example, currently the Broncos, Bulldogs, Storm, Roosters and Warriors have more than six rep players. Cooper Cronk is currently off-contract with the Storm at the end of the year. The Broncos, Bulldogs, Roosters and Warriors couldn’t sign him unless they offloaded numerous rep stars.

The Broncos would never have been able to sign Darius Boyd, for example.

Another example is the Cowboys currently have five current rep players (Jonathan Thurston, Michael Morgan, Matt Scott, James Tamou and Jason Tamoulolo). Theoretically, they could sign one more. However, let’s say any of Kyle Feldt, Ethan Lowe or Justin O’Neill play Origin this year. They would then have to offload a rep player if they wanted to sign another such player.

The points system and the rep player cap would prevent a few rich clubs from buying up all the best players and would reward clubs for developing their own talent.

In theory, a club like Penrith, who develop lots of young players, could have ten representative players in their side if they developed them all and they made their Origin or international debuts while playing at Penrith.

For a system like to work we would also need to see the introduction of an end of season trade period rather than the free for all we currently have on player signings. But that is a discussion for another time.