Is the Salary Cap a Good Thing?

NRL Salary CapIs the NRL Salary Cap a good thing asks Ricky Ricardo? While there are claims its water tight and rarely avoided these days, are all the clubs abiding by the rules?

Despite the constant efforts over the past 15 years or so, some teams are still breaching the salary cap. Teams are desperate to hang on to key players and promising juniors that they will resort to any available methods to keep or obtain the players they want. The problem is, some teams are better at it than others – and essentially have more blackmarket cash to throw around.

The most recent example is the Willie Mason saga, the big forward being snared by the Sydney Roosters and many scratching their heads at the aquisition. Sure, poor old Ashley Harrison was bumped off and forced to look elsewhere to free up some cash – but the Roosters seemed unlikely to snare Mason on face value. It does make you wonder.

Do teams simply offload players to save money, or is the salary cap simply an excuse to appease fans and players?

While the salary cap has some merit and ensures a close competition for the most part, it naturally restricts the NRL from growing at a quicker rate and while many feel the loss of players to the Super League and Rugby Union is the biggest concern, what about the potential players we could lure from all international codes if we had more money to throw around?

Yes, at the moment club budgets are tight and some clubs are in the red. But think about the big picture, if we open the flood gates then potential new sponsors could be knocking on the door and the exposure would grow along with the paypackets.

Money makes money. It’s always been true and the NRL should take this into account.

The NRL Salary Cap for 2008 is $4.1 million for the 25 highest paid players at each club. If each players was aid an equal amount, they would get about $160,000 each. Clubs can exercise their discretion in relation to how much individual players are paid, providing that total payments do not exceed the $4.1m cap. In addition to the $4.1m cap for its top 25 players, each club may spend up to an additional $350,000 on players outside the top 25 who play in the NRL competition.

Breaching these strict rules of the cap can result in either minor or severe consequences as many teams have discovered. In 1991, the Canberra Raiders were fined $100,000 and ordered to pay $85,000 excess from 1990. In 2000, eight clubs were fined with the Newcastle Knights paying the most, $159,000. 2001 saw three teams fined for a breach with the North Queensland Cowboys paying up $100,000. In what has been the biggest breach of the NRL salary cap to date, the Canterbury Bulldogs were fined a massive $500,000 and were stripped of all 37 competition points for systematic breaches totalling $920,000.

That’s the equivalent of the payout of two of the best NRL players currently in the game. As a result of the fine, the Bulldogs finished as wooden spooners for that year and to make matters worse, two senior officials at the club were sentenced to seven years jail for fraudulent activity. Having suffered such severe consequences, does this incident tarnish the reputation of the Bulldogs? In 20 or 30 years, is this the main incident the Bulldogs will be remembered by? Or will they be remembered for their on-field results?

Again, only time will tell us what really happens. Breaches of the cap continued in 2003, 2004 and 2005 when yet another major breach arose in 2006 with the New Zealand Warriors being the main culprit. It was revealed that their former management had exceeded the salary cap in 2004-2005. The club were fined $430,000, had to start the season with a four point deficit, and were ordered to play 2007 under a reduced salary cap of $3.15 million (and a reduced salary floor of $2.79 million. Again the question must be asked, have the Warriors lost some credibility as a result of such a serious breach?

If you take into account the amount of breaches and these are the ones that were discovered, you immediately see that clubs are doing everything to get around the cap or well and truly push the boundaries. Even as the NRL cap auditing team continue to make inroads, we must try to look at the bigger picture. Reward the smart operators, teams that are more astute with their finances and recruit well should be rewarded.

Don’t break up the best teams, it simply promotes the mediocricy and doesn’t reward anyone. Put simply, it’s Communism by another name – maybe it’s time we lifted the cap and took our game to the next level?

(Ricky ‘Ricardo’ Ascenso continues his role with NRL News on work experience.)

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