Private ownership prompts rugby to consider salary cap

[travelling_gerry]

Private ownership prompts rugby to consider salary cap

GREG GROWDEN CHIEF RUGBY CORRESPONDENT

April 26, 2010
Rally cry . . . the Melbourne Storm fans turned Etihad Stadium into a sea of purple last night, coming out in droves to support their team. Photo: Penny Stephens

THE Australian Rugby Union wants to introduce a salary cap system to stop spiralling player payments, despite the Melbourne Storm NRL fiasco.
Describing the Storm saga as a ''wake-up call'', the ARU will closely investigate player contracts to ensure the five Australian provinces are not breaking the rules covering third-party deals. The recently formed Melbourne Rebels, where Brian Waldron served as chief executive until last week, will be included.
Since the rise of professionalism in Australian rugby in 1996, numerous league players have been tempted to switch because union does not cap salaries. However, ARU chief executive John O'Neill said yesterday the introduction of private equity at the provincial level through the Rebels had prompted a rethink.
''As private equity comes into our game, the prospect of a salary cap for Australian Super rugby franchises should be investigated,'' O'Neill said. ''Philosophically we're in favour of a competition where the playing field is level and where the rich don't get richer and the poor get poorer.
''You have a choice. If you go to a completely open market, you could well find the discrepancy of talent between a rich and poor club so dramatic it makes the competition less than valuable. The competitions that have salary caps work. It does spread the talent and we think the NRL's dedication to a salary cap, though they are confronted by rorting, is the right way to go. What we have in place at the moment is reflective of the ownership of our franchises. Apart from the Melbourne Rebels, they're owned by the unions.
''The ARU currently funds them equally with $4.3million a year, and we tend to have control over player salaries through Wallaby top-ups. But I can see a day where each franchise would operate under an identical salary cap. And like cricket, we would then have 30 to 40 players on Wallaby contracts.
''Whereas to date we've had dual employers - the state and ARU - we may need to look at a contracting system which has a dedicated contract to play Super rugby and a separate contract to play for the Wallabies.''
On top of that would be a licence agreement requiring owners to release players for international duty. Following the Western Force's recent campaign to snare the Queensland Reds five-eighth Quade Cooper, the ARU is also looking at ensuring the provinces abide by the protocol forbidding players from being offered third-party deals to move to Australian provinces.
''It is a protocol that can be rorted if people are dishonest enough to go down that path,'' O'Neill said. ''We have to ensure the protocols aren't simply a nice-to-have document sitting on the shelf, but are put into action.
''[The] inventiveness of people to rort the system, as shown by what has happened at Melbourne Storm, can't be underestimated.
''From my banking days I discovered you can't legislate against dishonesty. No matter how good your regulations are, if people choose to be dishonest, it can be incredibly hard to catch them. Often it is not so much the crime which is the problem, it is the cover-up.''
O'Neill said the ARU was not ''enjoying seeing what the NRL and Melbourne Storm are going through''. ''But it is a wake-up call to all of us to ensure that whatever rules, regulations and protocols you have in place are actually meaningful, and being complied with,'' he said.
''When you read about player files not being kept on the Storm premises, but off the premises in the home of the CEO, that really rings alarm bells. We need to re-invigorate our checking procedures. We are not doubting the integrity and honesty of the people with whom we are dealing, but it only takes one bad apple.''




http://www.smh.com.au/rugby-union/un...0425-tlqi.html

[Burgs]

You're the dick who put private ownership into the equation in the first place JO'N

[Darren]

with only 5 teams / 150 players, I don't think a salary cap is really necessary. esp on the back of what has been learnt over the last few season with buying "stars".

Even if a franchise managed to get the entire Wallabies squad, the other franchises would still do well, and player squads based on actual skill are so dynamic that it'd make little difference I reckon...

[beige]

I don't think it's necessary either - the Premiership in England has one of roughly the equivalent of $6.64 million at the moment but I don't think we're getting near to that any time soon. Not that I'm necessarily against one - I just don't want us to screw ourselves.

[Burgs]

I don't have a problem with there being a salary cap, just so long as it doesn't restrict how much you can offer a player...

[James]

There will be no salary cap. This is just an ARU ploy to get the Force to back off Quade Cooper. Even though our academy is doing a great job we are still rely pretty heavily on Eastern States imports and at the end of the day as wonderful as Perth its the extra money is the big drawcard. A team salary cap would bugger the Force- which is shit because we are the only team that actually makes a profit. The good news is that it would take a good 3-4 years to get a salary cap up and running and by then 1/3 of the Force should be local.

[jargan83]

Isn't there already effectively a salary cap in place with a maximum payment to what each Union/Franchise (State owned at least) can pay the players?

[beige]

Isn't there already effectively a salary cap in place with a maximum payment to what each Union/Franchise (State owned at least) can pay the players?

I think "effectively" is the key word - I don't know if there is a maximum payment but when you factor in fixed ARU allotments, minimum squad sizes and third-party-payment regulations it would place somewhat of a limit on squad salaries.

[shasta]

I don't have a problem with there being a salary cap, just so long as it doesn't restrict how much you can offer a player...

So how do you feel about the restriction of limiting player payments to $120,00? I think that's the current situation. I thought the idea floated by JO"N, vague as it is, would be almost as much a dogs breakfast as the current situation as the ARU would still be controlling Wallaby contracts. I just can't see the sense in that. I'm in favor of a salary cap system where monies are divided equally to the franchises with the ARU offering match payments to players good enough to make Wallaby selection for any given Test. Any players who don't back themselves can go take the NH money. Works for the NRL.

[beige]

Not sure I'm a fan of the test-by-test basis you're suggesting - it works for the NRL but they don't play anywhere near the amount of tests the Wallabies do...

[shasta]

Not sure I'm a fan of the test-by-test basis you're suggesting - it works for the NRL but they don't play anywhere near the amount of tests the Wallabies do...

So how does that change things? Maybe I'm missing the point. I can see why the ACB needs a contracting system but that's a whole different set of circumstances.

I think the players actually get match payments ATM on top of contracts. It would allow VERY big match payments as an incentive. It would also lessen the pressure to select players solely because they have a fat contract with the ARU.

[beige]

Just saying there's a difference between "woohoo! I'm playing in the ANZAC test!" and being in a national squad for the better part of 6 months where you'd expect to be looked after.

[Burgs]

Thought my statement would have cleared things up for you shasta haha
Kidding mate, basically I believe the players should be paid what they are worth and what will, combined with the potential of a Wallabies jersey (what value on that?), keep them in Super Rugby for the best years of their career.
There is enough wealth in Australia that things would find their own ceiling over a few years, look what happened after the Giteau recruitment to WA, everyone thought the world was going to collapse but payments levelled out (before the whole Firepower debacle happened).
A cap of your hypothetical $120,000 is well out of touch if that is what is being floated as they can get the same money driving a dumptruck on the mines, only work "half" the year and play the sport they love at a local Club.
Totally as a random figure, I think that a player should have the capacity to earn somewhere between $250-500,000 "officially", that is Franchise and ARU combined regardless of how that turns out to be officiated, and have open slather on third party payments with the full support and involvement of the Franchise.
A "cap" puts a cap on everything, the only reason it continues to work in NRL is because the NH is an inferior comp. Now that Union has something to offer better it is starting to buckle.

[shasta]

A "cap" puts a cap on everything, the only reason it continues to work in NRL is because the NH is an inferior comp. Now that Union has something to offer better it is starting to buckle.

Actually I think we may be in agreement. Sort of. I'm just probably not making things clear. But I know what I mean. I suppose the word " cap" is where I'm going wrong. What I'd like to see is.....

1. ARU player payment $'s equally divided and let the market decide who plays where.
If (Union owned) franchises are making profits they spend them where they see fit. Hopefully they will still put a fair whack into Community Rugby.

2. Match payments for Wallaby duties with perhaps a bonus scheme including extra for wins and stepped payments for consecutive tests played. Totally performance based. can see some great debate around here )

3. 3rd party sponsorships continue. Marquee players to be funded by sponsorships only. Some thought would need to be given to allowing clubs to have a hand in these especially for marquee players. The current regime is a bit of a joke anyway.

[Burgs]

You would think that "X" multinational should be able to go to "Y" franchise and say "We have a budget for $x,xxx,xxx to assist with attracting or retaining a brand player or players that we will then expect to use for marketing purposes. These are the character traits acceptable and the parameters of expectations, knock yourself out."

When you look at the NH Club player profiles on the Club websites it actually lists the individual company or person sponsoring each player. Most sponsor one but there are a few who sponsor several players.

Probably another aspect is deciding on the fundamentals of whether a Franchise is responsible for and should benefit from developing their own junior and amateur player catchment or if separation between state Unions and Franchise should occur so that the un-contracted player pool is a free for all.
So basically speaking, should the NSWRU and QRU pour money it their local development and then not get first crack or compensation for development of the players developed in their pools.
It will be a long time, if ever, that player numbers would flow the other way but it will increasingly happen.