Quote: Ian 77 Redux "There's a decent argument for bringing the cap down unless most of the clubs can spend up to it. The Bulls spent at the cap, or close to it, for many years and their business model was flawed. Word on the street is that other clubs are about to hit the wall. If the sport can't manage a cap of £1.65 million then it needs to come down. If that means players leave then so be it. It doesn't matter if Sam Tomkins goes to Rugby Union. What matters is that Wigan don't get into financial meltdown - they don't have any family silver to flog any more. Similarly with us - we have a valuable asset in our stadium that has lots of equity in it. The day we start using that equity to pay the bills is the day we're on our way down.
I recall the whining from Brynn Hargreaves when he quit RL. He basically said "I was treated like crap by the Administrator at Bradford" and "There's not stability in RL, I can get more financial security elsewhere". No argument with the first bit. As for the second bit - so what? Good for you. I also recall ex player and all round complete **** Bobbie Goulding trying to make a massive issue of it on Twitter and saying "the sport needs more money". Ditto the normally sensible Mathers and the less sane Stankevitch. How? Where? Who?
It really is dead simple....
- The sport as a whole can generate X income through crowds, TV and other sponsorship.
- Clubs need to be able to manage existing debt, their current expenditure and compete on their share of X.
- If they cannot, if they say, spend 10% more than X, then on a long enough time line, the sport will collapse.
We have two options - increase the money that comes in, or reduce the outgoings. Unless we increase the money that comes in, as a sport we must spend less. That might mean the cap goes down. IF the sport is awash with money then by all means increase the cap. Doubt it will raise standards - just means that average players will drive slightly better cars and retire with £6,000 saved up rather than £2,000.
Sports finance works to the same principles as individual. We all have jobs and the people from St Helens know people who do. If we spent more than our salary every month, then on a long enough time line, we'd lose everthing. Again, if the sport can stomach it then great. But it can't.
Very interesting debate though.'"
Sensible post again from Mr Redux. Existing clubs desperate to get the players to compete are currently spending up to the cap and going bust because they don't have the income.
So the directors of HKR get fed up of putting their hand in there pockets and get rid of their players, Salford and Cas ( who were not even up to the cap I believe ) have to sell players, and London - well, London is a joke business model. So the only way you could really raise the cap is by getting down to a league of 10. I would guess that would reduce to a group of 4-5 teams over time as the remaining clubs overspent, or their backers disappeared.
As Ian and a previous poster says, clubs need to be self sustaining, they must generate the income to pay for their players. The only alternative is for a wealthy backer to constantly sub the club, and that is a dangerous position to be in, it's not 'sustainable' .