How to fix the salary cap

Over the years, there have been many suggestions as to how to make the salary cap fairer or be better policed. I’ve previously advocated a points system or for the value of a player to be set by the NRL but both of those require a pretty fundamental shift in the cap.

 

However, I believe what I’m about to propose is a far simpler system, than instantly eradicates rorting but while keeping true to the market-driven salary cap system.

 

Quite simply, every bid for a player must be registered with the NRL. And what goes on to any team’s salary cap is simply the highest bid, regardless of whether it is the successful bid.

 

So let’s say in the Blake Ferguson situation. Ferguson asks for registration with the NRL, all teams lodge their bids with the player managers having first submitted then to the NRL.

 

Roosters can only afford $200k but the Titans want to make a $500k offer. The NRL tells the Roosters if they want to have Ferguson that’s fine but he will be on cap at $500k. [UPDATE: And just to be clear the Titans bid would have to be binding. If the Roosters decline to match, the Titans must take the player or have that amount deducted from their cap.]

 

Furthermore, it’s the only system I’ve seen that works with the NRL’s marquee player scheme. Let’s say Folau wants to come back to Rugby League at some point. All bids are lodged under the salary cap. Titans lodge the highest bid at $1 million. That’s clearly his salary cap value. However, if the NRL then wants to double that to $2 million to get him back from the NRL it can say to Folau, if you go to the Titans we’ll double the salary. No other club can cry foul because they all had equal opportunity to bid.

 

I would give teams maybe 10/20 per cent leeway in retaining players with a certain number of years service. So under a 20 per cent figure any team wanting to poach DCE or Foran from Manly would have had to have come up with $1.2 million if Manly had offered $1 million. That accepts that players will likely accept less to stay with their current clubs and encourages one-team players. You might also make exceptions for compassionate reasons like in the Beau Scott case this year.

 

Under this system, clubs get no advantage by organising TPAs. Good player managers can still go and get their client’s TPAs but it is not related to the clubs. Removed from the burden of having to introduce players to TPA sponsors, clubs can focus on generating proper revenue and getting additional sponsors. There are no losers in the system. Players are guaranteed the biggest genuine paychecks and also have no limitations on what they can earn over and above that. It enforces the integrity of the salary cap and all players end up being put on cap at genuine market value.

 

APPENDIX 1: In conjunction with the system, I would introduce two changes to the salary cap.

A) Squads would be made up of forty players and only players within those squads can play NRL. Within those forty players you have a squad of 25 who fit into the "professional" cap described above. The other fifteen all play on standard second-tier contracts at an agreed minimum wage. I would remove all bonus payments - the incentive of a Top 25 contract I believe is enough for emerging players. This way, the NRL knows exactly what each team is spending and then can be no cheating of the cap. The second change would be to introduce standard junior contracts that are almost totally focused on educational and training benefits rather than money. In doing this you remove the complications behind second tier and junior contracts. The Holden Cup would be scrapped and the good juniors on professional or second-tier contracts play in the new reserve grade competition that is apparently coming anyway.


And voila, you have a system that a) cannot be rorted b) doesn't limit player's earning options in any way c) encourages clubs to develop players but not giving them a ridiculous advantage d) establish true market-driven equity e) doesn't limit the development and opportunities of juniors and improving players.

Are there any kinks I haven't considered?

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Replies

  • Would never get in Phil, the roosters and dogs etc would be kept honest.

  • I like both your ideas 1Eyed, both previous and new. 1 think I can never get my head around is how teams breach the cap. All clubs have been guilty at some stage to differing degrees. Do the NRL have people in place that monitor teams? I understand that the clubs are responsible but surely the NRL has an obligation to manage the clubs as the governing body? Your proposal may help solve this.
    • It comes down to situations unfolding that you don't account for. ie you get more injuries than you were expecting so you have to call on more second tier players or a player you have on a bonus structure plays a lot more NRL than you were expecting so he gets paid more than you budgeted for. Bonuses really have no place in a market that is meant to be controlled and limited.

  • I don't think there is anything wrong with the salary cap.

    It has stopped clubs going broke and made the playing field as level as you can get.

    Every system will have positives and negatives.

    It's not the salary cap that invited spagnolo into our club and drove moss away. Sometimes bad and corrupt management is exposed for what it is.
    • Mate, I don't know you can say that. Have a look at the Roosters roster and then compare that to say the TIgers. If you can tell me that the salary cap is working/fair. Its the NRL's job as the architect of the system we play under to create the best possible environment - what they have created is an environment that encourages cheating and back-door deals. As I think I've shown above, it doesn't have to work that way.

  • The issue I see with your system is it may as well be a draft, because the player cant play for who they want to play for without major financial disincentive and the club gets no benefit in having a club that attracts players ie Coach, facilities etc. 

    What stops a club from throwing in ridiculous bids knowing certain players wont want to play for them? ie Parra and Lyon

    Just like changing the rules to the game, someone will always find a loophole/wrestle

    • Good example! So in this case, I could see a situation where Lyon submits to the NRL that he has issues with the Parramatta club and is not willing to go to that club. The NRL would then refuse to accept the Parramatta bid and it wouldn't be counted. 

      Let's remember that in many other Leagues around the world, where players are traded like commodities, the player often has very limited choices as to where they want to go so I don't see the reduction of choice as an issue. The salary cap in its current form already effectively limits choice to those clubs who can afford any particular player.

  • Clubs will just inflate a bid to kill another teams cap.
  • Your system appears to have a fundament flaw. It's not a use-value but a speculation-value driven market. Put differently, it has the same flaws as were introduced into certain commodities markets when elements of the futures market were introduced into them (examples being the disastrous effects on the oil market when futures trading came to set the oil price). By extension, if you think a speculation based market can be free of rorts, you're not paying attention to speculation-based market distortions.
    • 1eyed, I agree that if a bidder was bound to their bid in some way, that undermines a host of things that contribute to rampant speculation. It's an important "rider" to introduce and I take
      it you see the sense of my original point (made when no such rider was indicated).
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