Simpler solutions for the NRL salary cap, recruitment and contracts

Simpler solutions for the NRL salary cap, recruitment and contracts

Looking at the NRL’s salary cap compliance issues, the solutions have more to do with the clubs and the RLPA through the collective bargaining agreement (CBA), than with the ARL Commission.

Player rosters Most clubs use on average 28-29 players a season. In 2015 and 2017, the premiers (Cowboys and Storm) used 33 and 34 players respectively.

Any reduction in squad size (currently 30 plus six development players) would leave some teams struggling to put a competitive side on the field.

In this shortened season, there is a higher than usual injury toll, leaving teams having to recruit from outside. Players can be recruited in from outside the NRL on training contracts at $1000 per week plus $3000 per game, but they are short term. If you are limited to any less than 30 players in the squad, there is no room to move if injuries occur.

Development players can only play after Round 13 of a normal year. With Origin and representative games at the end of this year, clubs are not losing rep players during the season, however in a ‘normal’ season, some clubs may lose up to six or seven players.

The ’30 plus six’ model is the optimum number. Having spoken to recruitment managers, they ask: “If we don’t have the six development players, where will the next batch of players come from?”

Salary cap A reduced cap would mean a breach of the CBA and the RLPA would have to agree. The clubs are pushing for this so they have more money to spend on their administration and coaching staff, due to a COVID-induced lack of revenue. It has been a tough year but in a lot of instances, the clubs have spent poorly.

Currently, the grant from the NRL is $13 million. In 2020, the salary cap is $9.5 million with $200,000 in veteran and developed player allowances, and $100,000 in motor vehicle allowances.

The CBA states the clubs must spend 95 per cent of their cap on player payments – $9.31 million. Of course, 2020 is an aberration and the clubs only have to spend 80 per cent. But in a normal year, the wooden spooners are spending roughly the same as the premiers, which defies commercial logic.

Sydney Roosters

The cap should remain the same for 2021 but the clubs should only be required to spend around 75 to 80 per cent of it, which allows the clubs to build and maintain a high-quality roster if – and this is a big if – they recruit properly.

This is where the RLPA needs to agree to alter the CBA for the good of the game.

Contracts The solution to contracts is to not necessarily paying the full amount over 12 months, but paying a guaranteed amount and bonuses, including for semi-finals and grand final appearances. This is the model the NFL uses.

Each week there are only 17 match payments per team, so it is easy to fit a formula.

Subsequently, this model rewards performance and helps clubs who may suffer long-term injuries to highly paid players to seek out other players as replacements. To do this, the player who may be out for the season would go on an injury reserve list. A replacement player is only signed for that season, but may earn a top-30 spot for following seasons by performance.

As an example, a player on $1 million could be paid a retainer of $400,000 and paid $20,000 per game (or bonuses at five, 10, 15 or 20 games), with a further bonus for each finals game. This way, the player still gets their million-dollar contract, however he actually has to earn it.

If a player suffers a season-ending injury, it allows the club to contract other players to fill that hole with $400,000 or $500,000. This is also a great boon for players outside the top 30.

Agents’ influence Some agents have a majority of rosters, allowing them to hold back players, manipulate sides and salary caps.

Agents managing coaches as well as players is a conflict of interest, but nowhere as big a conflict as the management of assistant Coaches and recruitment staff. The NRL or clubs rail against this if they are to be successful.

The first club who takes this type of ‘Moneyball’ approach to signing players and puts their foot down on overpriced salaries will gain profitability in the short term, success in the medium term, and be in a position to move on two or three marquee players and win premierships.

Clubs with the right balance Some clubs will struggle because their recruitment and negotiation skills are poor and they suffer with unbalanced rosters.

Only one club can win the premiership every year but success is not always about the premiership – it is about being competitive year after year, as the Sydney Roosters and the Melbourne Storm have been.

Billy Slater and Captain Cameron Smith hold the NRL Premiership trophy

The Broncos previously had been this team, making the finals every year, however they have not managed their cap well over the last two years. Brisbane have suffered long-term injuries amd allowed too many options in certain players’ favour. This is the death knell of salary cap compliance, on-field performance and squad balance.

Summary The idea of dropping the number of players in a squad is false economy. Clubs often use more than the top 30 throughout their season – sometimes even the premiers.

Large squads allow for injuries and resting of key players around Origin time, assists in developing young players, and is a win-win for clubs, coaches and the NRL.

By allowing clubs to spend less of their salary cap, they can be more profitable and use their money more wisely.