The Salary Cap: The NRL’s Final Frontier Breached

The NRL announced sweeping changes to the salary cap structure last night, which are scheduled to take effect as soon as the clock rolls over to 2015.

In part, it is a long overdue adjustment to the way clubs can be disadvantaged at times, particularly when developing local talent and retaining that talent over extended periods, as well as paying money still included under the salary cap to players no longer at the club.

Mostly, however, it is a recognition that if Rugby League wants to clearly be recognised the pre-eminent footballing code in the country, it has to work harder to retain the most precocious and thrilling talents it possesses. In a world where competition doesn’t merely exist between clubs intra-code, but is increasingly being felt inter-code, fan entertainment and engagement are of paramount importance.

And it’s not just the tidal wave of player professionalism seeking higher compensation and return on effort that has engulfed Rugby League and other codes (with which many clubs and commentators continue to struggle). The audience is far more wide-ranging than the fans. It is a competition to attract new devotees, as well as ringfence the corporate dollar as effectively as possible. Maximising memberships and game-day spectators, along with attracting lucrative sponsorship deals, are the game’s new bread and butter. More than ever, Rugby league is a business.

For these reasons, yesterday’s announcements are to be greeted enthusiastically, and with a sense of optimism for future years. Sure, there will be the inevitable niggles, details and loopholes, but with any luck, the NRL can build on this initiative (the type the Dr has been agitating for over a long period) and waterproof the policy to a relatively high degree.

What is of utmost importance is to have the new policies actually reflect the spirit in which they were created.

The most obvious change relates to the retention of marquee players. At this early stage, there is not a lot of detail to wade through, but the idea is a sound one. Leaving aside the fact that the NRL made an enormous mess of capturing Israel Folau in 2012, and could easily have done so without contravening any rules, money should not be the singularly defining factor for a player to sign a contract. We know that those who have joined the Rugby and AFL ranks went for this very reason, and the new policy means that this is unlikely to happen again. Essentially, the richness of a rugby league contract for the super-elite should now be equal to competitors, or at least close enough for them to think more than twice about what sport they actually want to play.

It is also crucial that the new power David Smith wields in topping up a players’ contract is seen to be fair and equitable. No-one I know wants to see favourites being picked, or even the appearance of certain clubs being favoured. Rugby League has enough internally-generated controversy without introducing more! Some will quite rightly question why the NRL doesn’t simply increase the cap for all clubs.

And the last thing we want to see is a club mismanage their salary cap under the assumption they were to have a player payment topped up, only for them to join another club (with similar top up).

There are quite a few hairs on this policy that need a shave, and we will need to see more detail before engaging in a definitive critique.

The downside of paying the super-elite to play is that the level below them will inevitably be targetted by other codes. Unless the money pool deepens yet again, this cannot really be avoided in the short term under this policy. Noting is perfect. Fortunately, there are ways to think about combatting this.

Developing the representative culture further, particularly internationally, is one way to keep money flowing into Rugby League. It is an area where AFL and Soccer can’t really compete at this point, and Rugby in its Super Form is now franchise-based rather than represntative-based. This is why fixtures such as City-Country need to be retained.

Another area is tightening the rules around player behaviour, to the point where they cannot help but realise they are all in this together. Reputational risk is as much a clear and present danger to the NRL as it is to banks, corporations, governments and so on.  Nobody realistically expects Rugby League players to be statesmen and beyond reproach (many of the list above fail this metric anyway – badly), but when there is competition for hearts and mind (and dollars), there is an incentive to be providing more reason to stay within, or join, the fold. And where people go, sponsors go …

The NRL has its own role to play in this respect. For far too long it has been lazy in formulating common sense rules, and in enforcing those relating to illegal and dangerous play, almost to the point of negligence (the Alex McKinnon lifetime job shows that they recognise this now). The NRL’s management needs to be focussed as much on the next generation as it is on the current sponsorship and broadcast arrangements. After all, a large shift of kids towards alternative sports now (and away from Rugby League) means a smaller pool of players and fans in the future.

Another welcome addition to the policy suite is the (Dr-endorsed – repeatedly!) sliding scale for veteran players under the salary cap. Loyalty in a professional sporting world is somewhat of a quaint concept, but rewarding loyalty, particularly extending back to the junior ranks, is long overdue.

We are yet to see the scale, but it shouldn’t be linear (clubs should get more offset for longer term players, who will also be older). Another issue I have with this idea is that it is capped at $250,00 next year. Other than mother-henning clubs into spending within their means, I’m struggling to see the benefit of this cap. It is a fraction of the total cap, and is still restrictive. If clubs want to retain 10-year veterans, they should be allowed to under the salary cap. The allowance should either be increased (preferably) or open-ended, in my view. Each club will have to weigh the pros and cons of having a certain number of older stalwarts against cap mitigation.

Allowing salary cap exemption for terminated player payments is an excellent move, but one that should apply immediately, as is the allowance for extra replacements to cover concussed players. Concussed players have played on in the past (and even this season, to the shame of those involved), and the possible long term effects of doing this mean they have to be protected with resolve. Injuries are quite different in this sense because they usually mean the player cannot physically continue, saving them from further complications.

There are a few more initiatives in the attached article relating to transfer fees, rookie players and more which I’ll leave for now. Suffice it to say, the battle lines have been drawn in the competition for talent, making it a far easier proposition to retain and attract the type ot talent the game of Rugby League is built to showcase.

 

 

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