National Rugby League salary cap

In 1990, the NSWRL introduced a salary cap system to even the playing field of teams in the Winfield Cup.^[1] The National Rugby League has adopted the salary cap system from its predecessor. A special team headed by former Australian representative Ian Schubert deals with salary cap issues and monitors teams on a yearly basis.^[2]

As of 2013 the club grant is $7.1 million which covers the salary cap of $5.85 million for the top twenty-five players at each club. The salary cap will increase to $6.3 million in 2014, $6.55 million in 2015, $6.8 million by 2016 and $7 million in 2017.^[3]The minimum wage from 2013 onwards is $80,000 for the top twenty-five players.^[4]

In 2010, following the Melbourne Storm salary cap scandal, the NRL introduced requirements for players and their agents to sign statutory declarations pledging their contracts comply with salary cap regulations, where previously only club chairmen and chief executives did so for biannual salary cap audits.^[5]

Salary cap by season

Discussion over the salary cap limit

The NRL is one of the few major leagues to implement a salary cap in a sport that has competing leagues in other countries where there is either no salary cap or a much higher cap per club. As a result, there has developed a tradition of players from Australia moving to Europe where salaries for the elite, and even for average players, were considerably higher. The NRL chooses to continue with the cap, believing that any reduction in quality of the sporting product due to the loss of these players is less than allowing richer clubs to dominate. In practice, the goal of parity has been quite successful, with eleven different clubs winning the premiership in the 15 seasons between 1998 and 2015.

In 2008, the departure of Mark Gasnier and Sonny Bill Williams, two elite stars, to play French rugby union prompted calls for the cap to be raised. Australian rugby league players had suffered a 27% decline in their wages since 1999, whereas other Australian sportsmen had experienced steady, and in some cases explosive growth. Some of the blame has been apportioned to the fact that the media company News Limited was a 50% owner of the NRL, and would normally be expected to be a bidder for rugby league rights in Australia. Being an owner of the game meant News Limited could apportion rights to itself at a discount, reducing the overall income the league could make for itself through the sale of media rights. This had a flow-on effect reducing available income for players.^[6] Following the 2009–10 northern rugby union season, global exchange rate changes meant that payments in European currencies were not as attractive, and Gasnier returned to the NRL. Williams returned to his homeland of New Zealand in what proved a successful attempt to play rugby union with the All Blacks, and in 2013 returned to the NRL to play for the Sydney Roosters.

The new Australian Rugby League Commission secured a billion dollar television rights deal in August 2012, and both clubs and players expected a significant increase in the salary cap. Announcements that the cap for 2013 would increase from $4.4 million to only $5 million has resulted in the Rugby League Players Association agitating for an increase to $6.5 million. The RLPA is also expecting increased retirement funds, income protection and a boost for representative payments.^[7]

In July 2013, NRL CEO Dave Smith floated the proposal of a marquee player allowance which could be paid outside the traditional salary cap to help retain the game's biggest stars such as Sydney Roosters Sonny Bill Williams - and help lure back the likes of ex-league player and Wallabies star Israel Folau.^[8]

Breaches

The breaches of the salary cap and salary floor regulations outlined by the NRL are exceeding the salary cap, falling below the salary floor, not informing the NRL of payments, late or incorrect lodgement or loss of documents relating to player financial and contract details or engaging in contract tampering. Trading cash for players is also prohibited to prevent wealthier clubs from evading the salary cap and salary floor regulations.

Penalties for players, club officials and agents include fines of one and a half times the amount involved (until 2010, lesser of 10% of the amount involved or $100,000) and/or suspension. Penalties for clubs include fines of up to triple the amount involved (until 2010, the lesser of half the amount involved or $500,000), fines of $10,000 (until 2010, $2,500) for each document that is late or incorrectly lodged or lost, and/or deduction of premiership points. These penalties were increased after the Melbourne Storm salary cap scandal in 2010.

The following breaches of the salary cap and salary floor have occurred:^[9]

• In 1991 it was revealed that the Canberra Raiders had substantially breached their $1.5 million salary cap for the year.^[10]
• In 2000, the Newcastle Knights were fined $158,800 but did not have any points deducted after club officials revealed that they had exceeded the salary cap by a total of $454,100 and failed to disclose third-party payments during the 1998 and 1999 seasons.
• The New Zealand Warriors were fined $100,000 in 2000 for failing to disclose third-party payments made during the 1998 and 1999 seasons.
• Six other clubs were fined in 2000: Penrith ($80,900), Canterbury ($50,000), Parramatta ($40,000), Melbourne ($24,300), the Sydney Roosters ($12,800) and Cronulla ($6,900).
• The Melbourne Storm were fined $89,900 in 2000 but did not have any points deducted after it was found that they had exceeded the salary cap by $177,400 during the season.
• The Brisbane Broncos were fined $84,150 in 2000 but did not have any points deducted after it was found that they had exceeded the salary cap by $118,300 and were late in lodging documents relating to financial and contract details of 10 players during the season.
• In 2001, the North Queensland Cowboys were fined $100,000 but did not have any points deducted after it was found that they had exceeded the salary cap by $210,000 and failed to disclose third-party payments during the 2000 season.
• In 2002, the Canterbury Bulldogs were fined the maximum of $500,000 and deducted all 37 premiership points received during the season after it was found that they had committed serious and systematic breaches of the salary cap regulations described by NRL Chief Executive David Gallop as "exceptional in both its size and its deliberate and ongoing nature" totaling $2.13 million between 2000 and 2002, including $750,000 in 2001 and $920,000 in 2002. The points penalty meant that the club won the 2002 wooden spoon.
• The Sydney Roosters were fined $149,150 in 2002 for failing to disclose or incorrect disclosure of third-party payments made during the 2001 and 2002 seasons.
• The Newcastle Knights were fined $85,000 in 2002 but did not have any points deducted after it was found that they had exceeded the salary cap by $170,000 during the season.
• Three other clubs were fined in 2002: Melbourne ($66,700), the Wests Tigers ($58,550) and Brisbane ($57,550).
• In 2003, the Melbourne Storm were fined $130,950 but did not have any points deducted it was found that they had exceeded the salary cap by $25,000 during the season.
• Seven other clubs were fined in 2003 after a crackdown in light of the Canterbury scandal the year before: Penrith ($60,000), Newcastle ($40,000), Brisbane ($20,000), South Sydney ($15,250), the New Zealand Warriors ($15,000), and Cronulla and Canterbury ($10,000 each).
• In 2004, the Melbourne Storm were fined $120,000 after club officials revealed that their former management had failed to disclose third-party payments made between 2001 and 2004.
• In 2004, the Canterbury Bulldogs were fined $82,300 but did not have any points deducted after club officials revealed that they had fallen below the salary floor by $159,600 and were late in lodging documents relating to financial and contract details of a player during the 2003 and 2004 seasons.
• Four other clubs were fined in 2004: St George Illawarra ($32,300), Penrith and the Sydney Roosters ($25,000 each), and Canberra ($5,000).
• In 2005, the New Zealand Warriors were fined $430,000 and were ordered to start the 2006 season with a four premiership point deficit and cut their payroll by $450,000 after club officials revealed that their former management had exceeded the salary cap by a total of $1.1 million during the 2004 and 2005 seasons. The points penalty meant that the Warriors missed a finals berth in 2006.
• Four other clubs were fined for minor breaches in 2005: St George Illawarra ($20,000), Newcastle ($11,100), Canterbury ($8,500) and Canberra ($6,350).
• In 2006, the Canberra Raiders were fined $173,200 but did not have any points deducted after it was found that they had exceeded the salary cap by $286,400 and incorrectly lodged documents relating to financial and contract details of 12 players during the 2005 season.
• Seven other clubs were fined in 2006: Melbourne ($63,250), St George Illawarra ($62,400), Brisbane ($30,000), South Sydney ($28,600), Wests Tigers ($21,250), Newcastle ($19,250), and Cronulla ($5,000).
• Six clubs were fined for minor breaches in 2007: South Sydney ($70,150), Wests Tigers ($46,800), Canberra ($45,800), Canterbury ($25,000), Melbourne ($13,900) and Brisbane ($10,000).^[11]
• Five clubs were fined for minor breaches in 2008: St George Illawarra ($15,200), South Sydney ($12,500), Gold Coast ($5,450), Canterbury ($4,650) and Wests Tigers ($3,650).
• Seven clubs were fined for minor breaches in 2009: Melbourne ($15,000), Brisbane ($5,000), Canterbury ($3,750), and the Wests Tigers, Penrith, Sydney and the Gold Coast ($2,500 each).
• In 2010, the Melbourne Storm were stripped of the 2007 and 2009 premierships, 2006–2008 minor premierships and the 2010 World Club Challenge trophy, fined a record $1.689 million ($1.1 million in NRL prize money which will be equally distributed between the remaining 15 clubs, $89,000 in prize money from the World Club Challenge which will be distributed to the Leeds Rhinos, and the maximum of $500,000 for breaching the salary cap regulations), ordered to cut their payroll by $1.0125 million, deducted all eight premiership points received during the season and barred from receiving premiership points for the remainder of the season after Storm officials revealed that the club had committed serious and systematic breaches of the salary cap regulations between 2006 and 2010 by running a well-organized dual contract and bookkeeping system that concealed a total of $3.78 million in payments made to players outside of the salary cap from the NRL, including $303,000 in 2006, $459,000 in 2007, $957,000 in 2008, $1.021 million in 2009 and $1.04 million in 2010. The points penalty meant that the club won the 2010 wooden spoon. Legal action by the former directors of the club against the penalties collapsed, and the matter was referred to ASIC, the Australian Tax Office, the Victorian State Revenue Office, and the Victoria Police.^[12] The club's former CEO, Brian Waldron, and financial officers Matt Hanson, Paul Gregory and Cameron Vale were all suspended for life.
• Five other clubs were fined for minor breaches in 2010: Parramatta ($25,000), St George Illawarra ($22,500), Brisbane ($17,000), Sydney ($7,250) and Canberra ($1,800).^[13]
• In 2011, the Wests Tigers were fined $187,150 but had no points deducted after it was found that they had exceeded the salary cap by $374,300 during the 2010 season.
• The Gold Coast Titans ($78,900), Parramatta Eels ($45,000), Canberra Raiders ($31,650), and the St George Illawarra Dragons ($15,700) were also fined for exceeding the salary cap during the 2010 season, while the Titans were also fined for losing documents relating to the financial and contract details of a Toyota Cup player.^[14]
• In 2012, four clubs were fined for minor breaches: Parramatta Eels ($80,350), Gold Coast Titans ($41,200), Penrith Panthers ($39,650) and the Canberra Raiders ($5,350).^[15]
• After the 2014 season had ended, the Gold Coast Titans were fined AU$300,000 after an investigation into several clubs.
• In 2015, Parramatta were fined a total of $465,000 for breaching the salary cap in the 2014 season.^[16]

Notable breaches

Canterbury season 2002

In 2002, the Canterbury-Bankstown Bulldogs were fined the maximum of $500,000 and deducted all 37 premiership points received during the season after it was found that they had committed serious and systematic breaches of the salary cap totaling $2.13 million over the past three years, including $750,000 in 2001 and $920,000 in 2002; these were described by NRL Chief Executive David Gallop as "exceptional in both its size and its deliberate and ongoing nature". The points penalty meant that the club won the 2002 wooden spoon (South Sydney would have finished last if not for the breaches), and as the club had been leading the competition table prior to the imposition of the penalties, this was a shattering outcome for the club and its fans. Two senior club officials were jailed for fraud as a result of these breaches.

New Zealand Warriors season 2005

In 2005, the New Zealand Warriors were fined $430,000 and were ordered to start the 2006 season with a four premiership point deficit and cut their payroll by $450,000 after club officials revealed that their former management had exceeded the salary cap by $1.1 million over the last two years. The points penalty meant that the Warriors missed a finals berth in 2006.

Melbourne season 2010

The Melbourne Storm salary cap breach was a gross breach of salary cap over a period of five years. The NRL's discovery of these breaches in 2010 resulted in the Storm being fined a record $1.689 million, stripped of the 2007 and 2009 premierships, the 2006, 2007 and 2009 minor premierships and the 2010 World Club Challenge, and ordering them to play for zero points, effectively sentencing them to finish the 2010 NRL season (of which 75% was still to be played) with the wooden spoon.

Paramatta Eels season 2016

The Parramatta Eels were fined $1 million and stripped of their 2016 NRL Auckland Nines title after they were found to be over the salary cap by over $500,000. They were also stripped of the 12 competition points they had earned so far. They were not allowed to earn any further points until they fell back under the cap.

External links

• Salary cap details and history on NRL.com

References