The Storm in a Salary Cap.

By Various Authors

This issue of the blog sees a variety of people writing in their opinions on the whole Melbourne Storm and Salary Cap issue. As everyone by now knows last week the Melbourne Storm were found to have breached the salary cap for the last 5 years. Their punishment was that they had 3 minor premierships, 2 premierships stripped off them and $1.7 million in fines and returned winnings. Also they have lost all their points for the year and aren’t allowed to compete for points for the rest of the year. The question is: Does the punishment fit the crime or is it too harsh. and what of the salary cap? Does it need to be revisited and changed? There will be three views put forward from Dane Campbell, Chris West and Daniel Andruczyk. The purpose of this is to get a variety of ideas and views to the reader and to form a good concise discussion about the whole issue of the salary cap. Hopefully the you the reader will also learn a thing or two on the strains that apply to players and clubs on retaining talent as well.

Dane Campbell

Bio

Dane Campbell featured only 6 times for the Newcastle Knights in the NRL, but he has had a long association with the game at many levels. From Broncos scholarship player, Dane also had a short stint with the North Queensland Cowboys before finding himself in Knights colours and has had 5 years playing experience at QLD Cup level for both Redcliffe Dolphins and Easts Tigers. Dane now coaches the Noosa Pirates in the Sunshine Coast Gympie Rugby League competition. Apart from his playing experience and coaching aspirations, he also has a great love of the game internationally and was the founder of the West Indies Rugby League Federation (WIRLF) and has strong relationships with many nations of which include Fiji, PNG, Jamaica and USA.

Comments

Well last week took us all by surprise, but having either played with or against some of the players that were caught up in the Storm saga, I can only feel for them personally and for their families through this time.

Firstly, let me state that I believe in what the salary cap is attempting to do in terms of keeping an even playing field. Where I am concerned is that we are continually seeing the superstars of our game either leave the code or having to relocate their families to go and play for other clubs just because their club can no longer afford to pay them what they deserve. Phil Gould raised a very valid point last week when he stated that the salary cap is hindering our game to the extent that when clubs recruit young players and bring them through their development systems to a point where they not only become NRL regulars, but then further onto representative duties, the club is then getting penalised as a result.

In 2001 I played in a QRL Colts (U19) Grand Final for Redcliffe Dolphins. In that final we played against Norths Devils. In the North’s side that day they had the following names that you may recognise: Cameron Smith, Billy Slater, Jake Webster, Dallas Johnson, Cooper Cronk (and I am probably missing a few more as well). When I sit and watch the Storm and the culture they have created down there and see the likes of Smith, Cronk and Slater at the forefront of that and the camaraderie they share, for any player that is the type of team you want to play in. If you cold spend your formative years developing together and then getting the opportunity to play NRL and share your lives and experiences with each other is a wonderful feeling. Not only that, but your extended families become close, your kids grow up together, it all leads to a happy and content life and if you could continue to have this throughout your whole career you would be exceptionally happy in life.

When I first went to the Knights at the end of 2004, I was blown away how close the playing group was. In a one team town and with the support the Knights receive from the general public it was a great place to be and share many wonderful experiences. Unfortunately results were another thing! The point I am trying to make is that as a player, you want to be at a place where 1) you are wanted and 2) you feel you belong. I have no doubt that the likes of Dallas Johnson, Jeremy Smith, Matt King, Jake Webster etc. all would have loved to have stayed in Melbourne, but once they achieved success and progressed through to rep teams, their price tag goes up and they are forced out. The Storm are the one’s who first spotted these players and brought them into their system -in the case of Matt King and Jeremy Smith, when no-one else wanted them, yet the club are penalised for spending the time and money to develop these players careers, only to see them forced to leave.

In any occupation, if you are a boss you want your staff to become better and as a result you would be wiling to compensate them accordingly as their skills advance. In the NRL we are seeing great development clubs like Melbourne and Brisbane develop talent only to see them go once there are just starting to become integral parts of the club. I have no doubt that 4-5 years ago Broncos management would have been thinking the likes of Tate, Hannant, Stagg, Boyd and Ennis were going to be the cornerstone of their long term success as a club, yet now they find themselves in 2010 having to utilise young players before their time and the results are showing. The Broncos will be thinking, it’s ok, these players will be better off in 2-3 years time (which they will be), but in 2-3 years time some of them might become Origin players and therefore be squeezed out by the salary cap, thus punctuating their Premiership aspirations even further. So the cycle begins again and again.

So with the best development clubs getting penalised, how do we fix it? There in lies the problem. Do we follow the English system where the Salary Cap is a percentage of the club’s revenue? That would defeat the purpose as the big clubs will only get bigger and the small one’s fall by the way side! What about notational salary caps – where a player has a value associated under the $4.1mil salary cap, but they are allowed to earn what ever the club can pay them? Perhaps that is one idea? My thought though is why with all the profits the NRL apparently makes, can’t we see the elite players of our game on central pay contracts similar to the Australian Rugby Union and Cricket Australia? Jonathan Thurston this week came out and said that raising the State of Origin and Test appearance fee might be one answer, but why cant the NRL/ARL or the new Independent Commission not step in and “top up” player contracts to our best and brightest stars?

For instance, Greg Inglis could receive $400,000 from his club deal, but to keep the poachers away and Inglis in rugby league, why cant he then receive $300-400,000 from central contracting also? This would allow the NRL to keep a marquee player and Melbourne would get to keep a player of whom they developed from such a young age.

I am also a big believer in further exemptions in the salary cap for long serving players. So after a player has played 5 seasons with one club, they are entitled to “x” amount being salary cap exempt and every year from years 5-10 this figure goes up. This would allow a club to forecast for the future when determining long term contracts for their star players. These measures would take away conflict of interest which is a stumbling block sometimes for 3rd party arrangements and it rewards players that are advancing their skills who are remaining loyal to their clubs.

All in all, their needs to be a salary cap to keep the competition close, but we need to see more latitude for our elite stars to fend off union, AFL and even European Super League Clubs.

For the Storm and other clubs that are doing such a wonderful job at developing young talent, let’s just hope that for their organisation and their supporters, that they get to see their stars develop and not forced to leave!

____________________

Chris West

Bio

I’ve experienced some interesting things in my life; however this last week has been one of the most galvanizing and controversial of my memory. First let me introduce myself. I’m Chris West; a university student from Toowoomba, host of anything goes rock/talk show the one way roundabout on http://www.hkcradio.com, Maroon blooded twenty year-old, born and bred bronco having grown up in the Bennett era.

Comments

Having this rugby league background I’m used to winning, and playing fairly. I’m just a kid who spends too much time listening, reading, talking and thinking about his favourite sport, but a week of all of the above has yet to straighten my head out on this issue.

The unfairness of it to everyone, both storm and non-storm fan, all players from all clubs who didn’t breech the cap and just about everyone else involved in rugby league is utterly staggering. However, a week of serious thinking has yet to convince me that justice has been done with the punishments dealt out by the NRL. Sure, you can strip the club of a premiership or 2, deal out hefty fines, give cash back to the other teams, but is that really solving the problem? I’ll get to the future penalties later.

I agree with the financial penalties involved, and the stripping of the premierships. However, the storm players are still going to feel that they won, and it is nothing short of hollow for all the other teams involved. My broncos were knocked out of the playoffs 3 years running by this illegally assembled group of players, where’s justice for us? Where’s justice for the eels team of 2009, or the sea-eagles of 2007, and 2009 who were blown off the park in week 1 of the finals and, with the eels upset win over the dragons were eliminated, from position 5. At first I felt the grand final runners’ up were hard done by not to have the premierships given to them, however a team must win a game on the day, its not like an Olympic race where a medal can be passed on after a disqualification, I agree with the Manly player who said that he would feel like it was a hollow victory.

So fine, we’ve stripped them of things, made them pay, and dealt with the past as best we can. However, I’m extremely concerned with not only the future punishment, but the lack of any precedent for future offenders. The attitude of dealing with each situation on its own merits that seems to be coming from David Gallop and the folks at the NRL is a worrying sign. Teams ought to have knowledge of what exactly the penalties are going to be for breeching the cap, for the sake of quashing controversy and having a yardstick with which to beat CEOs into submission. At first I agreed with the NRL’s decision to disqualify the storm from competition in the 2010 premiership; however I am inclined to agree with and expand on Warren Ryan’s thoughts on the subject.

While the storm is playing with their current, illegally assembled line-up, disqualification is only fair. However, for this team to continue to play is not fair to the clubs they play, and prevent from gaining competition points. It doesn’t matter that Melbourne can not gain points themselves, we saw in their absolute obliteration of the Warriors last Sunday evening, and that this team still means business, for now at least. Melbourne play hard and they play to win, that is not going to change just because they are only playing for pride and the future beyond this season, although it will be hard for the players to keep up the intensity under these circumstances.

Having a team in the competition for no points makes no sense in so many ways. If they do well, they’re robbing other teams of competition points, and making a farce of the competition. The team, who finished eighth, will be looked down on as the team who shouldn’t have been in the finals. Their position will be hollow to their players and fans, as will the victories of both the minor-premiers and winners on grand final day. Season 2010 will be looked back on in a hollow manner, because I’m sure everyone will be well aware of the fact that Melbourne didn’t feature in the final standings, and the playoffs and regular season come September and October will be vastly different as a result. The premiership and minor premiership will be hollow.

If the euphoria of the support they received for the warrior’s game wears off, which it will, and if Melbourne does badly, then all kinds of things are going to start flying. Fingers will be pointed at players, firstly for underperforming, secondly for not caring enough, and then what happens if there’s a major upset? We end up with our game going down the road of Pakistani and South African cricket, with allegations of match-fixing. How can the team hope to hold its support in this situation, how can the game generate revenue in Victoria, or hope to compete with AFL. When a player is injured, what incentive does he have to come back early? If State of Origin or a Kangaroo match is on the horizon, players could conceivably make themselves unavailable as to not risk injuries, or play with a lesser degree of intensity. How is a team supposed to keep themselves motivated when there is no chance of them scoring a point on the premiership table? This is bad for the players, its bad for the teams, its bad for the media, and it’s bad for the game. For once in my life I find myself agreeing with Phil Gould. The NRL has been a little hasty in dealing out the punishment, and as a result the game could well suffer.

I don’t quite know what can be done myself, that’s why I’m not in the NRL, but somehow this situation has to be resolved in a way that is fair to every team. It isn’t fair that the storm are still playing, stripping both competition points and points for and against from the other teams, with an illegally assembled line-up. If they continue to play in this competition they must be under the cap. There are enough NRL, Super League and other teams under their caps to pick up whoever the storm offload. Once this is done, then and only then, I believe the storm should be allowed to play for premiership points. Until that period, whether it takes 2 weeks or 2 months to sort all this out, no, they should not be allowed to compete in the competition. I’m also in favour of point penalties for future years, or even a cap penalty. Why not hold Melbourne to a cheaper cap than other teams for the amount of years they went over, say a hundred thousand less. Whatever is done, needs to be fair for all the clubs including Melbourne, and needs to be a well thought out solution, not the day of the story breaking slap down that we have currently.

There are several ideas for salary cap improvements; however all have been knocked back by the NRL at this stage. The most prominent was the idea put forward by Broncos CEO Bruno Cullen to have a 10 % discount on the cap for players who have held loyalty to their clubs for over five years in first grade. This system would have clubs paying players more than what was being counted against them under the cap. Ideas for more simplified loyalty and marquee clauses have been put forward and rejected also.

This whole fiasco makes me sick. Its making a farce out of the greatest game of all and ruining peoples and clubs lives. If people are not going to follow the rules, then they will be penalized, but are the rules really fair. I’m sure we will see over the coming weeks and months as this situation plays out, here’s hoping that this is the scandal to turn rugby league around in this country.

____________________

Daniel Andruczyk

Bio

My background is in Science. I hold a PhD in Plasma Physics and work in the field of Nuclear Fusion. Not something you would relate to Rugby League, but having grown up with the sport, being an avid Cronulla Supported, I got into working with the International game when living in Germany and have worked with a number of countries with volunteer work and promotion. I have written on occasion for a couple magazines, Rugby League Review in Australia and Rugby League World in the UK, and still write on the European game for Rugby league Review. I also run this website and blog, Rugby League International Scores, where I keep track of not only all the domestic and international fixtures from around the world in the one spot but also endear to promote and advertise the international game as well as provide consultancy to teams that need it. I also like to think that I am a thinker of the game, not so much in the way its played or the tactics but on its structure and the way it is run.

Comments

What I am going to do is play the Devil’s Advocate here. Everyone for the last week has been beating on about the Salary Cap and how it wrong for it to be broken and that the Melbourne Storm should or shouldn’t have been punished they way they were. Well I am going to attack this from the opposite point of view, one that maybe is not necessarily what I believe, but I believe none the less needs to be put out there and  discussed, and not just dismissed out of hand but actually looked at seriously. I of course refer to the notion “Do we actually need the Salary Cap? Is it right, just and Proper to have one?”

I’ll tell you why I am discussing this here, it comes from several discussion I have had with Rugby League personalities and non sporting personalities in general. There seems a notion that the Salary Cap is in place to equal things out, to stop clubs from spending above their means and for no one club to become an all powerful entity such as say Manchester United in the English Premier League (Association Football). But I think there are some flawed notions in this.

First look at the this concept that people seem to have that there is no money in Rugby League, or for clubs, but haven’t The Melbourne Storm and in my eyes more importantly the Canterbury Bulldogs and The New Zealand Warriors in the past show this is not the case? How so? Well the very act that they are being condemned for! The fact that these teams beached the cap by a range of $200,000 to over $1.5 Million shows that there is money in the sport and clubs. That these teams by ingenuity and a sense of being driven to win were able to go out and  secure this money for their players through various means. So why can’t the other teams go and do this? Why, because they are basically lazy, and yes I think my own team I support is the most guilty of it. There are many ways it can be done, private investment, getting proper businessman to run the clubs and game, not blinkered ex-players who have a nostalgia for the good old days. Sport is a business and in business you want to invest and have the best, so why does Rugby League need to take a back seat?

Which leads me to my next point, talking with some friends and family who are lawyers and work in areas dealing with law and business, they claim that technically the Salary Cap is illegal. It is after all a “Restriction of Trade” something that is not allowed to happen anywhere else in society? Do we have a Profit Cap on Banks? Or a Sales Cap for the IT industry? No! We expect these businesses to do what they need for themselves and the investors to pull a profit, weather that means more advertising, cost cutting, business restructure but most importantly the retention of the best talent to perform. Yes a company will pay an employee what they are worth to retain them to maintain their performance. A team should be the same. Why a team which is successful should be punished for this by having to get rid of their players to help teams that don’t do well does not make sense. Melbourne have invested time and money in nurturing many of their top stars, and as a reward they have to get rid of them. It will be interesting when we see the day when a team or player will say enough is enough and challenge this in court. The Salary Cap at its essence rewards mediocrity and punishes success.

What is interesting in the EPL is that there are 4-5 teams that dominate the competition there. No cap exists yet you have the sport and the clubs pulling massive profits and being hugely popular and this does not seem to have any adverse effects on the teams outside of this “top flight”. That fans and teams that are not successful aim to be as good as these top clubs, its something to strive for. One of the arguments about having a cap is to “even the competition”. But does this actually happen? Play offs aside. Lets try and compare things one to one in the League table like in the EPL. In the EPL year in year out you basically get 3 – 4 clubs that dominate the competition, Manchester United, Chelsea, Arsenal, Liverpool. The bench mark we can look at with rugby league is the top 8. How many teams have made the top 8 in the NRL and how do we determine them to be dominant. I looked at the last 10 years, 2000-2009 where the current teams have existed. If we set a definition of a team dominating, that in the 10 year period they must have appeared 2/3 of the time in the top 8, so 7 from 10 appearances in the top 8, then we find that even with the Salary Cap 4 teams meet this criteria easily. Brisbane (10), Melbourne (8), Parramatta (7) and St George/Illawarra (7). So this notion of “evening out the competition” just does not wash.

So what about this argument of teams going broke, well let them. If a team can’t get is business and finances sorted out so that it can turn a profit it does not deserve to be in the comp. I am against any artificial killing-off of clubs like what was attempted with Souths and what effectively has happened to Norths and Illawarra. But If a team on it own through the forces of “nature” die, well so be it. By getting rid of the cap, hopefully this should give clubs the kick in the back side to actually start getting their stuff together, a Salary Cap only encourages a club to be lazy, because they only have to do the minimum to survive, and that is never a good way to run things.

Finally a comment on the punishment. OK so Melbourne broke the rules of the cap, does the punishment really fit the crime though? There have been since 2000 many many cap breeches by nearly every club. The two biggest however were the Canterbury Bulldogs and New Zealand Warriors in 2002 and 2006 respectively. The Bulldogs were found to have breached the cap to the tune of $920,000 in the year, basically two extra players, and were deducted all of their points and finned $500,000. New Zealand had a similar breach and also lost their points and had to play at a reduced cap. But after loosing their points the teams were still allowed to compete for the rest of the season. Now here is what does not sit well with me. Melbourne’s breaches were to the tune of $1.7 million over 5 years. 2006 was a $200,000 breach, as were 2007 and 2008. In 2009 they breached it by $400,000 and this year the breach was $700,000. Basically what I am getting at is that the 2007 premiership should not be taken away from them. For the breach for that year it is a bit harsh. Also I understand them losing all their points accumulated thus far this year, but if they can come back to be a legal team then why not allow them to play for points. The way it is now, not only Melbourne but everyone gets punished. The NRL needs to be very careful that it is not seen to be doing knee jerk reaction that are tough to pull out from later.

I am sure there will be some out there that will call me a heretic and a conservative in thinking like this. I disagree, I like to see myself as a nostalgic evolutionist. What I mean by this is that, by taking what works in the present looking to the past and what worked there, we can evolve the sport and its components for the future of the sport. In the end what form this takes is yet to be seen but one thing is for certain, and that is the current format of the Salary Cap won’t be as we know it now, not just in the NRL but in Australian sport in general.

Daniel Andruczyk’s email: daniel@rugbyleagueinternationalscores.com
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2 Responses to “The Storm in a Salary Cap.”

  1. Joel M says:

    Great read from all guest bloggers.

    Junior % rewards/exceptions.

    central pay contracts
    (for best/brightest stars) – e.g. 300k

    Both points that are good but why do NRL not implement ideas like this earlier or at all! Why does rugby league have to be the “take a few decades” admin. – can also relate that to to the RLIF – major board members but that bring up another 100 ideas/arguments.

    Also each club could have one marquee player (could be similar to the “central pay” one)
    Broncos – Lockyer
    Cowboys – Thurston
    Newcastle – Gidley
    Cronulla – Gallen
    Titans – Prince
    Canberra- Campese
    etc..

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