FORUMS > The Virtual Terrace > 5 more Aussie clubs cheating the salary cap |
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| Quote: Starbug "Spot on , I was directly involved with sorting out the NL 1 salary cap at Leigh when it was introduced in 2004 , it is relatively simple , you assume that whatever bonuses that are in any players contract will be paid to the maximum amount and restrict your spending accordingley , if you do have anything left over [ assuming you actually have the cash ] you are then free to dish it as you see fit , there are no excuses'"
Jesus...if someone from Leigh can figure it out, then even people from Cronulla should find it simple
Sorry.....but breach of the cap is breach of the cap...no matter how it happened and all breaches should be treated accordingly....especially Wigan
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| Quote: Starbug "Spot on , I was directly involved with sorting out the NL 1 salary cap at Leigh when it was introduced in 2004 , it is relatively simple , you assume that whatever bonuses that are in any players contract will be paid to the maximum amount and restrict your spending accordingley , if you do have anything left over [ assuming you actually have the cash ] you are then free to dish it as you see fit , there are no excuses'"
Fair enough. Then why does it happen?
Didn't Saints get caught out a few years ago because of a slight overspend explained at the time as being due to payment of bonuses due to international selection?
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| Quote: gutterfax "Like any business, the clubs must surely forecast and budget for these "payments".
At the start of the year, I have 30 staff I control the budget for. I have a finite amount of money I am allowed spend on these staff members, with the sales guys commission potential capped. As an alternative to uncapped commission, I am allowed increase basic salaries for the FOLLOWING Year if I have star performers, but I can't spend 1 cent over my budget. If I have star performers, I will also have people who can't cut the mustard.....and therefore, they go, freeing up the money for these annual pay increases.
So, if an NRL club thinks that international caps, bonuses etc will impact on their budget, they should adjust them accordingly. Instead of overspending, they may well end up with asurplus which they can use to reward their stars, rather than overpaying them.
I still say that no other Business operates in such a way that they can overspend on wages........and to those that say if you restrict the earning potential of stars they will jump codes...so what? People change jobs for better money all the time....I know I have, but that is a discussion about the size of the cap, not breaching it.'"
I don't know how RL players contracts are structured but I imagine that with fixed salaries and capped commission it is fairly easy to operate within a fixed budget.
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| The bonus payments are part of the problem. And it's okay to say that clubs should forecast potential bonus payments and take the maximum value of these payments into account. But when some involve rep payments it makes it hard. If every player received a bonus for playing rep football and every player somehow made a rep side that might be a huge amount to take into account. It's not reasonable to expect a club to forecast that every single player will play rep football and therefore they need to account for rep bonuses for 25 players or more. So they probably account for some bonuses for rep footy, but not the absolute potential maximum amount that could be required. If they have had to pay $20,000 in bonuses for every year for five years they will probably budget for about that amount. But then one year they might get twice as many players picked for rep sides and have to fork out twice the bonsues, which is more than they bargained for. It's still their mistake and they are fined for it. It doesn't mean they are loathsome cap cheats that should be shot at dawn though.
But the main reason clubs go over the cap in minor ways is because of third party agreements. Players are allowed to earn money outside the game but only if these payments are not linked to the club. So sponsors of the club can't use a player to promote their product and then pay the player additional money to do so. This money would have to count on the cap. But where some clubs come unstuck is in the interpretation of what is an acceptable third party payment and what is not. Each situation can be different and clubs will sometimes claim that a third party payment is legit while the salary cap auditor will disagree. It might all depend on how strong the link between the club and the company involved is. The main thing is that the club reports these payments. The auditor will either agree that they are okay or disagree and add those figures to the salary total. If it pushes the club over the limit they can be fined.
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| Quote: ECT "The bonus payments are part of the problem. And it's okay to say that clubs should forecast potential bonus payments and take the maximum value of these payments into account. But when some involve rep payments it makes it hard. If every player received a bonus for playing rep football and every player somehow made a rep side that might be a huge amount to take into account. It's not reasonable to expect a club to forecast that every single player will play rep football and therefore they need to account for rep bonuses for 25 players or more. So they probably account for some bonuses for rep footy, but not the absolute potential maximum amount that could be required. If they have had to pay $20,000 in bonuses for every year for five years they will probably budget for about that amount. But then one year they might get twice as many players picked for rep sides and have to fork out twice the bonsues, which is more than they bargained for. It's still their mistake and they are fined for it. It doesn't mean they are loathsome cap cheats that should be shot at dawn though.
But the main reason clubs go over the cap in minor ways is because of third party agreements. Players are allowed to earn money outside the game but only if these payments are not linked to the club. So sponsors of the club can't use a player to promote their product and then pay the player additional money to do so. This money would have to count on the cap. But where some clubs come unstuck is in the interpretation of what is an acceptable third party payment and what is not. Each situation can be different and clubs will sometimes claim that a third party payment is legit while the salary cap auditor will disagree. It might all depend on how strong the link between the club and the company involved is. The main thing is that the club reports these payments. The auditor will either agree that they are okay or disagree and add those figures to the salary total. If it pushes the club over the limit they can be fined.'"
Rep payments would need to be declared to the governing body prior to any season and they then become the governing bodies problem , as for 3 rd party payments , then same as , all it requires is for the club to contact the governing body and ask , if they dont they risk exceeding the cap
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| Quote: gutterfax "Jesus...if someone from Leigh can figure it out, then even people from Cronulla should find it simple
Cheeky get , having said that , at the meetings the RFL hadn't figured most of it out , and were actually led by the clubs on several issues such as community work payments and player/coach payments at NL level
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| Quote: Starbug "Rep payments would need to be declared to the governing body prior to any season and they then become the governing bodies problem , as for 3 rd party payments , then same as , all it requires is for the club to contact the governing body and ask , if they dont they risk exceeding the cap'"
It's not the governing body's problem. This is about players having clauses in their contract that says they will get bonus payments if they play rep football. Plenty of playes have this. And third party payments are generally done between player manager and company. It may be only later that the club has to declare these to the auditor even if they have nothing to do with it. Only a small fraction of these payments may be of any threat to the cap rules. It's only if/when the auditor interprets a breach of the rules that the issue is dealt with. If it was as easy as you make out there would be no problem, but clearly it is not. What must be of more concern is that SL doesn't seem to have a fulltime cap auditor. Who is monitoring the clubs over there?
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| Quote: ECT "It's not the governing body's problem. This is about players having clauses in their contract that says they will get bonus payments if they play rep football. Plenty of playes have this. And third party payments are generally done between player manager and company. It may be only later that the club has to declare these to the auditor even if they have nothing to do with it. Only a small fraction of these payments may be of any threat to the cap rules. It's only if/when the auditor interprets a breach of the rules that the issue is dealt with. If it was as easy as you make out there would be no problem, but clearly it is not. What must be of more concern is that SL doesn't seem to have a fulltime cap auditor. Who is monitoring the clubs over there?'"
It is if they set the cap , are you telling me this was not raised when the SC was discussed , if so then both the clubs and the governing body are stupid
As for 3 rd party payments , what happens quite often is the clubs just keep quiet , hoping they dont get noticed , then plead ignorance , ie they cheat
The RFL do have a F/T SC auditor [ well they did up to 2006 ]
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| Quote: Barnacle Bill "I don't know how RL players contracts are structured but I imagine that with fixed salaries and capped commission it is fairly easy to operate within a fixed budget.'"
Clubs have a fixed budget at the start of the season....it's called the salary cap. It is their job to stay beneath it......pure and simple. No "ifs, buts or maybe's"....stay under or get doscked points and fined.
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| Quote: gutterfax "Clubs have a fixed budget at the start of the season....it's called the salary cap. It is their job to stay beneath it......pure and simple. No "ifs, buts or maybe's"....stay under or get doscked points and fined.'"
Well that's fine if you want to ignore the differences that RL players contracts present compared to a fixed salary and capped commission.
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| The irony of people at Parra asking to made Premiers because Melbourne were over the cap.
Same old aussies.
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| Quote: Barnacle Bill "Well that's fine if you want to ignore the differences that RL players contracts present compared to a fixed salary and capped commission.'"
Don't want to ignore it.......just budget around it. If say, Thurston can earn a total of "x" if he plays every SOO, International and his club side win every game and the grand final, then x is what is entered into his column on the budget sheet........and "x" is deducted from the running total........therefore, if he doesn't play every SOO or his club don't win every game, then he gets his salary and the club will have a surplus to do with as they please.........but they won't go OVER THE CAP......
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| DO you think first graders get paid for wins? It ain't A Grade.
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| Quote: Wadski "I wonder if there are any in the Superleague that are employing the same methods?'"
I remember at least two being fined in recent years.
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| Quote: Rooster Booster "DO you think first graders get paid for wins? It ain't A Grade.'"
OK.....let's say that a club, any club, has assembled a squad of 30 players for a season and let's say there is a salary cap of $6,000,000. If there are 5 "star" players on $500,000 each, then the remaining 3.5 mil can be split between the other 25 at 140k each.
However, if there are bonus payments available to SOO players or internationals, then it is the responsibility of the club to budget for these. Let's say the 5 stars are all bolted on for SOO (3 games) and internationals (6 this year if they get to the final of the 4 nations) and let's say that the bonus figure is $10k a game, then those 5 players will receive another 450k...reducing the pot to $3,050,000 to be shared between the other 25 players. ($122,200 each)
Furthermore, if say 2 of these 25 players shine and get selected unexpectedly for SOO and/or Internationals....another $180,000 comes of the salary pool.($114,800)
The solution is simple.......if the club budgets for 7 players to receive the full $90,000 in bonus payments at the start of the season, the chances are they will not breach the cap as a result of SOO or International bonuses......and, if by some freak of nature that they had more than 7 called up, they could be open about it at the time the players are called up and explain that they had made provisions for 7....and ask for a temporary exemption.
I still say that any breach of the cap that isn't reported to the NRL immediately should result in a loss of competition points, a fine and a suspended points deduction that hangs over the club for 5 years......it is the responsibility of the club to manage itself and keeping a tab on salary payments shouldn't be too difficult for them. I bet you thay know exactly how many pints they sell, shirts they sell, pies they sell and I bet they know exactly how many tickets they sell.....so why can't they keep a record and by that I mean an accurate record of salary payments?
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