I want to discuss this rather interesting topic, a topic which seems to make a fair majority of sporting fans ticked off.
Third Party Agreements are used with the salary cap to ensure high-profile players can play for the club. TPAs allow the club to offer a large amount of money, with some coming from third parties which is not counted under the cap.
The idea is used to beat the system. It’s essentially breaching the salary cap without breaching the salary cap. Much of the penalties handed down for the Storm’s salary cap breaches were later made legal under TPAs.
Think like this, let’s say I was a high profile five-eighth with five years and 47 tries under my belt with a State of Origin, Four Nations and premiership to go with it. A different club wanted to sign me for four years on 750k a year.
Now in the regular salary cap, they only have 500k left but really want me so with the third party businesses they are with – the ones who do their advertising – they get the remaining 250k directly from them.
The money is not guaranteed by the club – it falls upon the third party to pay it.
Now we all know about the infamous Sydney Roosters’ reference about the salary sombrero. Thing is, I believe TPAs are used to manipulate the system. Obviously some clubs have far greater access to wealthy third parties than other clubs.
To make thins fairer, we could either limit them or scrap them.
Option 1. Limit
The salary cap is roughly $9.4 million and some teams have multiple players on million-dollar contracts to the point you ask “How the hell are they under the cap?”
With said $9.4 million, we should allow them a limit of $1.6 to total $11 million. We also must require them to make mention of who is being used in TPAs and how much.
Should it be over the allowed amount, that’s breaching the cap.
Option 2. Scrap
I personally prefer this one. Why? The salary cap was designed to ensure all clubs have the same chance for having star rep football players come and stay in the team, as opposed to all the rich teams getting the stars and the not so rich teams struggling.
The TPA cash can be used for better reasons within the club.
So Roarers what do you think?
Danny
Guest
What are ‘whole of game’ TPA’s? The ones they didn’t release. They implied Tedesco and Cronk were on them. Regards Danny
stevesyd
Roar Rookie
What does Nick Politis think about 3rd party agreements being scrapped?
Mushi
Guest
Not sure about this as the players are only contractors to the NRL aren't they? How does the nrl ensure delivery of services? Aren't they effectively underwriting it then and removing. Not sure how making something more administratively intensive encourages more participation, plus adding a third party to the agreement is messy. How expensive would this be to the game also? Presumably the nrl department would need to be as well resourced as the entire player agent group which is effectively the same as lowering the salary cap
Snoop
Guest
Rivalry rates higher than the Broncos. Most people in Brisbane hate the Broncos and more reasons to barrack against them the better
Snoop
Guest
Cheating the cap is dead easy. It amazes me clubs get busted. People do stuff like this all the time, criminals call it money laundering. They only get scutinised after they are busted dealing drugs or whatever. They’re also stupid and have a high volume of income with little reason for it. Legitimate businesses big and small call it smart business. A large and complicated business like an NRL club could easily make extra payments to places and not the players or TPA businesses but the money would still find them.
RoryStorm
Guest
Could you provide a link to the Storm cheating the salary cap by over a million dollars one year. I'm sure that would make very interesting reading for everyone. I live in Melbourne but I have yet to read a comprehensive report.
Nat
Roar Guru
No it's not Albo. Having a few tourist attractions generates the tourist dollar but it's got 200K bigger population than Canberra and Newcastle and twice the size of the Central Coast. There is a huge league population, junior and senior, and two ISP teams. They still average 15k to a game which was closer to 20k back when they were more successful. Like any NRL club, a few consistent wins and the crowds show up.
Nat
Roar Guru
Every part the 1st half of this comment is wrong. TPA’s have no correlation to FTA coverage. The Storm get very little FTA coverage considering their on-field success. WT get a disproportionate amount of FTA coverage so where does that translate into their TPA benefits? FTA coverage is purely based on viewers. Outliers may have more opportunity in a one team town so Gold Coast, Newcastle and Canberra should be rolling in it. Have you considered that players at professional clubs are more likely to attract sponsors than those in the news for all the wrong reasons?
Paul
Roar Guru
Nothing scaremongering about it William. At best, the game in the period you described was semi-professional, so guys were far less reliant on what money they made during their careers than the guys today. We're now in a completely professional era and that means everything is about money. In addition, the bulk of money Clubs made in most of that time, came from ground attendances, sale of merchandise and only a fraction came from TV rights. People putting money into ANY venture want a degree of certainty they're going to get a positive return. If NRL sides disappear, especially in the numbers you're talking, fans will do the same and the more fans go, the less interest there is, therefore the less reason to put up cash because what return are sponsors and broadcasters likely to get?
mushi
Roar Guru
Nike even used to have “big market” escalators in their TPAs.
mushi
Roar Guru
According to NRL data the roosters don’t have much. In terms of other comps it’s very similar but only NRL fans seem to have the issue. Brand Jordan anyone? I think part of it is the terrible management of cap breaches that has seen clubs incentivised to break the cap.
mushi
Roar Guru
Yep and that seemed to be the thrust of the adamson judgement
mushi
Roar Guru
Not really because they are the only real employers for their talents. It’s been covered north of 100 times on here. It also would likely see the Nrl viewed as a cartel. (Which is true) I think the judgement in the adamson case though suggest the cap was an appropriate restraint but anything beyond that was not reasonable (draft)
mushi
Roar Guru
So your saying the NRL should deny players the ability to value anything other than salary?
mushi
Roar Guru
If I’m at the RLPA and the independent valuation gets raised my first call is to our lawyer, the second to the NRL saying there’s no season as we’ve gone on strike. it’s also completely unmanageable, a player used off the branch is different to a fullback etc. also different systems will value players differently
Harold
Guest
Does any other code/country with a salary cap have a TPA process. This stinks because of one club teams in big cities (Bris, Melbourne) where it is the biggest problem which means they are perennial finalists with big audiences which suits the NRL and assists News Corp...Roosters also have the sombrero to thwart the Swans...
Emcie
Roar Guru
Cheers for the clarification, my main point with the storm was to counter the authors claims that what the storm did is now legal under "Tpa's" now. I know the boat thing was cleared, but it's often used as an example of how clubs could breach the cap with unrecorded "gifts", and something that certainly can't be solved by scrapping tpa's.
mushi
Roar Guru
This concept of a perfectly level playing field being created by a salary cap is less believable than a conference between the Easter bunny, Santa and the tooth fairy. Each city has different costs of living, non player aspects aren’t captured, access to juniors isn’t even and there is decades of peer reviewed studies showing that salary isn’t the defining factor for employees.
mushi
Roar Guru
Does anyone care this is probably illegal?
mushi
Roar Guru
A half dead badger could hide 250k of cash from a routine audit