Salary sombrero

The NRL “Salary Sombrero”

If you’re a rugby league fan then you know exactly what the “salary sombrero” is. If you’re not then a little background is in order.

For a long time the NRL has tried to “level the playing field” with an ill thought out salary cap concept. The idea was that the value of all player contracts were added up and each club had to keep that total under the amount dictated by the salary cap. This in theory would make the competition fair by keeping rich clubs from having all the best players.

The “sombrero” joke comes from the fact that some clubs seem to have a bigger “cap” than others. Of course you can only fit so many players under the “cap” but there’s plenty of room under the “sombrero”.

Spreading the playing talent around is actually a pretty good idea. But using how much the clubs say they are paying a player to achieve that is never going to work. Let me expand on that.

Creative accountancy

It’s been a running joke among fans for many years that what the clubs say they are paying players versus what they ACTUALLY pay them are two entirely different figures. The clubs with the best “creative accountants” have been rorting the system and the rot doesn’t look like stopping anytime soon. We’ve seen it many times where a player who is being courted by several clubs who are all offering big dollar contracts ($500,000 for example) ends up signing with a rich club for a reported $350,000.

Now why would he do that? He might want to be part of a club with a winning record and be prepared to take less money. Sure. He might be prepared to take less money to be closer to friends and relatives. True. But the reality is that many times that player ends up with several “third party agreements” (TPA’s) that make up the extra money. Quite often it’s more, much more.

So why would clubs and players value TPA’s so highly? Because they don’t count under the cap and players can have as many as they want. The only limitation is that clubs can’t directly organize any of these. They must be done independently of the club otherwise they have to be counted under the cap.

Money under the table

Prove it…

It seems to be a badly kept secret that many TPA’s are indeed facilitated by the clubs. Allegedly of course. Even if it’s just introducing players and managers to company CEO’s who just so happen to be sitting at the neighbouring table at the restaurant where they are having lunch…

It’s also rumoured that clubs have been known to even go further. Allegedly, they often give player’s partners and wives well paying jobs within the club or with club sponsors. Of course none of those count towards the salary cap and can’t be directly linked to player contracts.

It’s the old “where there’s smoke there’s fire” scenario. But most of this can never be proven to be linked to player contracts and therein lies the problem. The fans can see it and it’s openly joked about. But the NRL aren’t willing or able to do anything about it under their current system.


But everybody is doing it

The NRL claim that their current deterrents and punishments are working but they’re not. In fact it’s been so bad, practically from day dot, that I can’t think of a single club that hasn’t broken the rules. Many have done so on several occasions and will continue to do so as long as there is an advantage to be gained. Don’t believe me?

History of NRL salary cap breaches

So how can it be a fair system when clubs can so easily cheat it? The answer is: it’s not…

How then do we manage the fair and balanced spread of playing talent in a way that is NOT open to cheating? Well, over the last few months I’ve given it a lot of thought and come up with an alternative.

“The NRL Points Cap”

Simply put it gives players a value based on their playing experience which can’t be fudged.

Sure, rich clubs can still offer players bigger and better contracts. They do now. The Points Cap however, will mean that there is a black and white, fully transparent limit to how many of those players they can sign. There’s a little more to it than that but I’ve outlined my full proposal in the following document:

The NRL Points Cap

At the end of the day the current salary cap system is majorly flawed. Unless the administration changes to a simpler, more transparent way of doing things diehard fans like myself will start to walk away from the game. I’m hoping those in charge have a long hard look at the alternatives like this one and decide to make a change for the betterment of the sport.