Salary Cap Case Study

Has The NRL’s Salary Cap Been Successful?

In my opinion, the NRL’s salary cap venture has been unsuccessful, it has not worked because the same teams always qualify for the top eight, the more affluent teams. But what is the salary cap? The salary cap currently, is $6.8 million and it sets an amount that a team can spend on a 25 man roster, for the duration of the season. It is supposed to allow a level playing field for all 16 teams.

The Sydney Roosters, a very well off club, financially, has come top of the ladder, for the last 3 years, while less disadvantaged teams such as West Tigers, who have come consistently in the bottom half of the ladder since 2012. Their buying power seems substantially less than the Roosters, and the Roosters have afforded many highly rated players.

At the time when the breach was discovered, Melbourne was the premier team in the league, with such star power as Greg Inglis and Cameron Smith. This cheating of the cap had been going for 5 years, The Storm had dual bookkeeping and dual contracts, which left the NRL without $3.87 million in payments, in order to afford players outside the salary. Plainly, they breached the salary cap and disregarded the intent of the salary cap. This has been seen with numerous other teams within the NRL, such as the Parramatta Eels and the Gold Coast Titans.

Punishment for breaching the salary cap, usually, constitutes a deduction of all competition points (for larger breaches), fines and in Melbourne’s case, they were stripped of their two premierships and three minor premierships. People would think that teams and their administrators would not breach the salary cap again, as they do not want to suffer the considerable consequences of breaching the cap. But it has been broken numerous times since the 2010 breach, the most recent breach being the Parramatta Eels last