Rugby League: Salary-cap system levels the playing field

By PETER JESSUP

The pros and cons of the salary cap system are the subject of much discussion in most professional sports.

The intention is to even the playing field, by forcing clubs to release players.

Critics say teams are thus hampered by their own success: win a premiership and players increase in value and have to be let go, some of them juniors who have come right through the grades with one club. That nurturing investment deserves concessions, they say.

The cap is supposed to produce more even games. This year that argument got a thumping - there were more blow-outs than in any recent season.

From 1976 to 1988 four teams shared premiership honours. The cap was introduced for the 1989 season with amounts set up to A$1.5 million according to the financial viability of individual clubs. Then came the Super League war and payments of up to A$650,000 a season.

The allowances for contracts signed by Super League or ARL affiliates are finally expiring after this season, as are allowances made for clubs that merged. The St George-Illawarra Dragons have had to shed A$3 million from their 2000 salary bill.

From 1990 to 2001, seven clubs won the premiership title, including newcomers Melbourne. But the Storm had been granted a bigger envelope than other clubs so they could honour contracts signed with Super League clubs that News Ltd wanted folded - Hunter Mariners, Western Reds, Adelaide Rams. And, during that period, there were as many as 20 teams whereas before 1988 there were 12.

The salary-cap system has already been challenged in the Australian Federal Court by Australian Rules players. The court issued what is regarded as a landmark ruling, that a cap is justified if it can be proved to be in the best interests of the players and the public.



Many league clubs are struggling. They get A$2.5 million from the NRL annually as their share of television rights payments. Most carry sponsorship ranging between A$1.5 million and A$3 million. Earnings from clothes and other marketing are shared out by the NRL, which licenses production. They rely on grants from cash-rich leagues clubs, most of that from poker Machines.

But the pokie money is dwindling. Young people have more entertainment opportunities - fewer are keen to spend a night with mum and dad hauling on one-armed bandits.

The NRL is looking at several procedural changes to tighten up its governance of the cap. Foremost are plans to license player managers, the "six-and-a-half percenters", who have been unusually quiet during this whole affair, and to have all offers to off-contract players registered with the league.

Discussion will continue about an NBA-style draft, where the lowest-ranked club gets first chance at the highest-ranked young player, and so on down the list.

The New Zealand Warriors, owned by Eric Watson's Cullen Investments and minor partners, is financially well placed despite its lack of pokie money. Although its books are not opened to anyone other than the NRL, the club is expected to turn a profit this year for the first time since its first season, 1995.