Looking at the NRL’s salary cap compliance issues, the solutions have more to do with the clubs and the RLPA through the collective bargaining agreement (CBA), than with the ARL Commission.
Player rosters
Most clubs use on average 28-29 players a season. In 2015 and 2017, the premiers (Cowboys and Storm) used 33 and 34 players respectively.
Any reduction in squad size (currently 30 plus six development players) would leave some teams struggling to put a competitive side on the field.
In this shortened season, there is a higher than usual injury toll, leaving teams having to recruit from outside. Players can be recruited in from outside the NRL on training contracts at $1000 per week plus $3000 per game, but they are short term. If you are limited to any less than 30 players in the squad, there is no room to move if injuries occur.
Development players can only play after Round 13 of a normal year. With Origin and representative games at the end of this year, clubs are not losing rep players during the season, however in a ‘normal’ season, some clubs may lose up to six or seven players.
The ’30 plus six’ model is the optimum number. Having spoken to recruitment managers, they ask: “If we don’t have the six development players, where will the next batch of players come from?”
Salary cap
A reduced cap would mean a breach of the CBA and the RLPA would have to agree. The clubs are pushing for this so they have more money to spend on their administration and coaching staff, due to a COVID-induced lack of revenue. It has been a tough year but in a lot of instances, the clubs have spent poorly.
Currently, the grant from the NRL is $13 million. In 2020, the salary cap is $9.5 million with $200,000 in veteran and developed player allowances, and $100,000 in motor vehicle allowances.
The CBA states the clubs must spend 95 per cent of their cap on player payments – $9.31 million. Of course, 2020 is an aberration and the clubs only have to spend 80 per cent. But in a normal year, the wooden spooners are spending roughly the same as the premiers, which defies commercial logic.
(Mark Metcalfe/Getty Images)
The cap should remain the same for 2021 but the clubs should only be required to spend around 75 to 80 per cent of it, which allows the clubs to build and maintain a high-quality roster if – and this is a big if – they recruit properly.
This is where the RLPA needs to agree to alter the CBA for the good of the game.
Contracts
The solution to contracts is to not necessarily paying the full amount over 12 months, but paying a guaranteed amount and bonuses, including for semi-finals and grand final appearances. This is the model the NFL uses.
Each week there are only 17 match payments per team, so it is easy to fit a formula.
Subsequently, this model rewards performance and helps clubs who may suffer long-term injuries to highly paid players to seek out other players as replacements. To do this, the player who may be out for the season would go on an injury reserve list. A replacement player is only signed for that season, but may earn a top-30 spot for following seasons by performance.
As an example, a player on $1 million could be paid a retainer of $400,000 and paid $20,000 per game (or bonuses at five, 10, 15 or 20 games), with a further bonus for each finals game. This way, the player still gets their million-dollar contract, however he actually has to earn it.
If a player suffers a season-ending injury, it allows the club to contract other players to fill that hole with $400,000 or $500,000. This is also a great boon for players outside the top 30.
Agents’ influence
Some agents have a majority of rosters, allowing them to hold back players, manipulate sides and salary caps.
Agents managing coaches as well as players is a conflict of interest, but nowhere as big a conflict as the management of assistant Coaches and recruitment staff. The NRL or clubs rail against this if they are to be successful.
The first club who takes this type of ‘Moneyball’ approach to signing players and puts their foot down on overpriced salaries will gain profitability in the short term, success in the medium term, and be in a position to move on two or three marquee players and win premierships.
Clubs with the right balance
Some clubs will struggle because their recruitment and negotiation skills are poor and they suffer with unbalanced rosters.
Only one club can win the premiership every year but success is not always about the premiership – it is about being competitive year after year, as the Sydney Roosters and the Melbourne Storm have been.
(Photo by Robert Prezioso/Getty Images)
The Broncos previously had been this team, making the finals every year, however they have not managed their cap well over the last two years. Brisbane have suffered long-term injuries amd allowed too many options in certain players’ favour. This is the death knell of salary cap compliance, on-field performance and squad balance.
Summary
The idea of dropping the number of players in a squad is false economy. Clubs often use more than the top 30 throughout their season – sometimes even the premiers.
Large squads allow for injuries and resting of key players around Origin time, assists in developing young players, and is a win-win for clubs, coaches and the NRL.
By allowing clubs to spend less of their salary cap, they can be more profitable and use their money more wisely.
Straz
Guest
In principle I would love to see guaranteed money and bonus money (incentive or outcome based)contracts operating as many US sports have. In regards to earning less money if you're injured at work - please look at any work cover or insurance scheme relating to most employment, particularly government employees. i can guarantee if you are injured at work you do not earn the same amount of money when on work cover. It is generally a sliding (dropping scale) of your absolute base wage (no allowances, bonuses, overtime etc)that can get down as low as 70%. Unfortunately its not in the interest of the RLPA or Agents to use this type of contract- so it wont happen.
Train Without A Station
Roar Guru
Yep. And none of that is not possible now.
Train Without A Station
Roar Guru
You mean what they AGREED to pay the players when they wanted to sign them?
Train Without A Station
Roar Guru
Clubs don't sign those deals because they have to meet the salary floor. They have to spend it, but once they have the team secured they want, they can always increase or front end contracts to meet the floor. Their problem is getting all they want to secure under the ceiling. As for this comment: Of the 15-20 players on close to $1M per year there is only 6 or 8 who are worth the money. The rest are injured or lose form or are simply not worth it. Based on what? Your opinion? Because players get injured at work they shouldn't be entitled to their salary? They are worth it because somebody was willing to pay it. That's the only way value is determined.
Sports Nut
Roar Rookie
These ideas are not "changing the game". They are about some players being paid too much because the Clubs must spend the money. This means the market has been "skewed" over a number of years and is out of control. This is not about minimum contracts and some players may still receive fixed salaries. Many Clubs want to play some players more but they have been snookered by a ridiculous deal for a so-called superstar and the game is littered with them at the moment. Of the 15-20 players on close to $1M per year there is only 6 or 8 who are worth the money. The rest are injured or lose form or are simply not worth it.
Sports Nut
Roar Rookie
No this is about avoiding players being cut & Clubs having to pay players what they are NOT worth just to spend the money. However some front offices are crap!
Sports Nut
Roar Rookie
The reasons for the suggested change in SC % spent is so that the numbers of players don’t drop! The Coaches are wanting players cut so that it becomes 28 & 4 not 30 & 6. So the head of the RLPA is actually representing ALL the players not just the top few.
no one in particular
Roar Guru
A lot of that is beyond the control of the NRL because clubs keep it all at arms length. If the ATO ever bother to investigate NRL or AFL clubs and players there will be some real ugly headlines. Making it more transparent will only benefit players and fans. Players can gauge their real market value (as opposed to the over or under inflated figure their manager tells them). Any bullcrap about the stars salary will be called out for what it is very quickly. The NRL are looking at an internal "bid system" for players. Clubs registering interest in a player will have to lodge it (and the terms) with the NRL. The player can then know if his manager is really looking out him. Also, the NRL can see if a Club A offers Star Player $1 million a year, but he signs with Club B for $750k they know it smells
Placepunter
Roar Rookie
Mushi, I agree that the cap is a cost control mechanism. Ultimately we can't allow clubs to spend themselves into oblivion because if we lose clubs we lose games which means less money being pumped into the game from sponsors etc etc. At the same time we're not the same as Football (Soccer if you need to call it that) around the world. Due to the length and breadth of it's popularity and the amount of money it garners, the great majority of countries have no or at least little need for a salary cap. The richer clubs get richer and the poorer clubs do their best, whereas at the same time they benefit from the support and money that is generated. In the NRL we have very limited money and need to protect what we have. The parity of competition is vitally important. We need the salary cap to be vigilantly adhered to, both minimum and of course maximum spends. As far as PTA's are concerned, I find them a blight on the game. Wests Tigers appear to be the only club as far as I can tell who show zero desire to be anymore than one of the numbers. It seems as though Madge, being a career coach realises that the rhetoric of "lets be competitive and build a good culture " will keep him employed and employable. His record has shown that unless he is given a good/great roster his coaching skill set of getting the most out of his players through "army drill sergeant" fitness and organisation just gets them to be the best that they can be. Wests Tigers are doing the best that they can. Their ability seems to be at best 9th. They'll have another year of being bashed and bullied and finish about the same again. They don't seem to chase and most certainly don't get great players to the club (Harry Grant is on loan only). They seem to be the best example of a team wanting to underspend the salary cap. Good management and bad management are part and parcel of business life (and NRL is a business) Every club apart from Wests Tigers seems to show a desire to spend on the type of player that will possibly get them to a premiership or at least be a contender.
Greg
Roar Pro
I think there are some good ideas in here but shifting the mindset of the players and rlpa to accepting a bonuses style contract. However, a big part of me thinks your earning potential shouldn't be reduced because you have been injured at work. But if a club can entice players to accepting such contracts there salary cap will be quickly sorted and onfield success will surely follow.
mushi
Roar Guru
That isn't why we have a cap. It is a cost control measure first and foremost, any increase in parity is an ancillary benefit. That's why TPAs don't circumvent it.
mushi
Roar Guru
Forgive me if I've missed something but this sounds to me like: Front offices are rubbish and we need to protect ourselves from their ineptitude (which the cap already should). So let's take money off the players... so we can spend it on the bad front office ?
Peter85
Roar Rookie
I agree in that you cant change the amount of the pie that the player share in without significant repercussions but you can certainly change the way it is distributed. I am not sure if the players see themselves a s salaried employee or a retainer+commission type of employee, different people want different levels of certainty v maximising rewards. One of the things that I have observed in salary capped sports here and in the USA is that the players union representatives are generally the high earners yet the majority of the membership are at the bottom end of the earning scale, yet there are very few measures to give more guarantees to the bottom half of the players on the list.
Dwanye
Roar Rookie
But to you does ‘The perceived lack of integrity’ come from more then just the salaries paid? To me it is from that, the shush deals, free rent in mansion, cars, shonky jobs they don’t really turn up to, what ever. But it is also from the players, clubs and managers coming up with the ‘unit’ them self that get calculated for the salary cap. So the public ask ‘how are the North, Northwest Sydney hermit Crabs affording Joe Superstar in their cap, no way he worth ‘X’ dollars they saying’.
Train Without A Station
Roar Guru
The thing about TPA's is there's no legal basis to restrict them. They are essentially the player earning them off their own bat. If a player invests in a property development would you count that towards the cap?
Placepunter
Roar Rookie
My understanding of a salary cap in sport is to attempt to have some sort of parity year in and year out. In this way you continue to engage the fans. Now if we allow teams to hoard money to spend in later years then we may as well not have a salary cap at all. As it is we have TPA's which by and large circumvent the salary cap anyway. At least enforcing the salary cap with the obvious maximum but also with a minimum spend keeps the spirit of the salary cap intact. Either have a salary cap as i've indicated or just don't have one. You can't be a little pregnant. You're either pregnant or you're not.
no one in particular
Roar Guru
an independent valuation system wouldn't be needed if salaries were transparent.
Dwanye
Roar Rookie
First off, any player should be able to earn and ask whatever they can. My issue with the salary cap is it uses a metric that crosses multiple area’s that create conflict. The salary cap is to even out the comp. It however uses a unit that is decided and can be manipulated by the unit holder to benefit them self and a club which works against the salary cap task. ‘The perceived lack of integrity’ wouldn’t be with an independent valuation system, a system that also wouldn’t inhibit earnings. Like in the recent roar article ‘The player point system needs to replace the salary cap’, a PPS would let players earn and clubs buy and with something more see through and create a level comp.
Train Without A Station
Roar Guru
The reason why I disagree with many of these proposals to "change the game" that people make is I feel they rarely consider why things are the way they are. The reason why things are the way they are is because clubs collectively have decided for them to be that way as a result of their actions around recruiting. There is nothing to prevent teams offering a guaranteed contract at the minimum wage or above, with bonuses attached. Likewise contracts which are 1+1+1 with the options in the club's favour. The reason why they don't exist though, is because no player will agree to that, when another club will offer a better guaranteed deal. And there will always be a club that does, because they all need to look after their short term. Every club could offer 1 year deals for players, but then players would likely reject them for longer deals. Which one club would offer to get the players they want.
Andrew01
Roar Rookie
There are some good ideas here however it seems the players are making a lot of the sacrifices - Clubs spending less of the cap on salaries, reducing guaranteed money and introducing bonuses... The head of the RLPA who agrees to all of this won't be the head of the RLPA for long...