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FORUMS > Wigan Warriors > Salary Cap - Ian Lenegan's Views
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Quote: Paul Youane "He'd get slaughtered on here if he aired such views on the salary cap. Does he know what he's on about or is he completely wrong?'"


If you are happy for RL to play second fiddle to a second rate game like RU, then one way of doing this is to keep the salary cap as it is and let any star quality player go to the dark side. Maybe IL is happy to stay as a big fish in a small pond. Not criticising him, just making the point. Personally if I ruled the world, RL would be promoted to the hilt and we would never ever lose our best players to RU.

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Quote: Ovavoo "If you are happy for RL to play second fiddle to a second rate game like RU, then one way of doing this is to keep the salary cap as it is and let any star quality player go to the dark side. Maybe IL is happy to stay as a big fish in a small pond. Not criticising him, just making the point. Personally if I ruled the world, RL would be promoted to the hilt and we would never ever lose our best players to RU.'"


I always think it would be interesting if we did refer to ourselves as just "rugby" once in a while. The rah rah lot definitely seem to have the monopoly on the term at the moment; it would just be interesting to see if it would make any difference.

A small point and slightly OT I know, but your last sentence got me thinking of something I've thought for a while.

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Quote: Scouse Pie2 "But you know full well that the majority of clubs wouldn't go for it as it would lessen the "competitiveness" and we'd go back to the situation in the 90s that the SC was introduced to try and stop. At the end of the day, there are only a small number of clubs who could afford to pay players whatever they wanted and unfortunately as with things like this it's majority rule.

A salary cap can of course work, we only have to look to the States to see that. The NHL, NBA, MLB and NFL (current labour dispute notwithstanding) to see that players can still be paid what they deserved within a set of constraints.'"


Sadly SP2 you are swallowing the Pro Cap propaganda that has steadily infiltrated our sport.

The CC was not introduced to ensure "competitiveness". It was introduced to stop teams "overspending". Somehow it has been manipulated into it's current state and intent via a perverse osmosis....

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Quote: XBrettKennyX "Sadly SP2 you are swallowing the Pro Cap propaganda that has steadily infiltrated our sport.

The CC was not introduced to ensure "competitiveness". It was introduced to stop teams "overspending". Somehow it has been manipulated into it's current state and intent via a perverse osmosis....'"


Sorry, if I wasn't being clear: "competitiveness" was meant tongue in cheek.

If it can't be increased/scrapped then clubs need to work within its constraints by being given other incentives i.e. rewarding player loyalty/youth development. Surely a player giving 10 year's service to one club can't have their full salary counted towards the cap. Even a player giving 5 year's service should have some of their salary discounted.

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Quote: FearTheVee "And most teams still aren't spending full cap, therefore the incentive of a cap higher than you can pay doesn't seem to be working does it?'"


No it doesn't, you're right. At least in relation to the clubs that aren't making an effort to raise revenue even to the point where they could spend the full cap.

But you're still seeing things in isolation. We need clubs to be forced to put in place business plans which provide for stability and sustainable growth. We could then raise the cap, slowly and after a period to allow clubs with weaker management to sort themselves out.

You're also missing the point still that the status quo is unsustainable. If we don't change things then the pro game is not going to survive in its current form over the longer term. The SC has to be raised, if we don't then in 10 or 15 years time player wages will have been eroded by inflation to the point where there won't be enough cash in RL to support full time squads, and quality athletes will have left for other sports or will not have bothered to take up RL professionally in the first place.

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Quote: Deano G "No it doesn't, you're right. At least in relation to the clubs that aren't making an effort to raise revenue even to the point where they could spend the full cap.

But you're still seeing things in isolation. We need clubs to be forced to put in place business plans which provide for stability and sustainable growth. We could then raise the cap, slowly and after a period to allow clubs with weaker management to sort themselves out.

You're also missing the point still that the status quo is unsustainable. If we don't change things then the pro game is not going to survive in its current form over the longer term. The SC has to be raised, if we don't then in 10 or 15 years time player wages will have been eroded by inflation to the point where there won't be enough cash in RL to support full time squads, and quality athletes will have left for other sports or will not have bothered to take up RL professionally in the first place.'"


And this is the key point, (and one that many on here have laughed at when it has been made before).

Let me put it this way. How many youngsters grow up with a burning ambition to become full time volleyball players?

Q.E.D.

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Quote: FearTheVee "Quick question, has Wigan become a better and more stable club under the cap, or before the cap when they were losing money hand over fist with a mammoth wage bill?

Do you think the cap has held Wigan back?'"


That a terrible question.
Its so obvious that wigan have improved because they are a better run club under lenigan.nothing to do with the SC.

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Quote: XBrettKennyX "Simple yet flawed unfortunately.

It would be relatively easy to work around this. e.g. "Lenegan Paint Strippers sponsors Sam Tomkins".

Obviously the schemes wouldn't be that obvious but I'm sure you get the point.


Much better to scrap the CC completely and, if the intention really is to ensure the survival of the clubs, ensure that a MINIMUM amount of revenue is available to finance fixed outgoings.

"Spend whatever you like guys, attract the very best talent that you can afford to pay, pay the players what they deserve, just ensure that you have enough put aside to cover the essentials of running a club"'"


Could you explain why "Lenegan Paint Strippers sponsors Sam Tomkins". Would be a problem? It's no different (in terms of this discussion) to "Ford cars sponsors Sam Tomkins". As long as the revenue comes from outside of the club's direct finances it makes absolutely no difference whatsoever. IL is as entitled to spend his money in this way if he so chooses as is Applicado, Engage, Ford or anyone else for that matter! The fact is we would be able to market, and so retain, our (and by that I mean Rugby League's) marketable assets without laying the burden at the door of the sport and it's clubs. Like I say, maybe it's too uncomplicated a solution for the RFL....

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Quote: jinkin jimmy "Nice try Phuzzy but there's not enough envy or bitterness in your proposal and too much common sense. Even though the cap is failing to prevent clubs going under it is essential that it is retained for its prime purpose of holding back the cream so that the rest don't have to try too hard.'"



Aye Jimmy! I notice it's being conspicuously ignored by most on here. I should have known better. Never get in the way of a good rant or vested interest! icon_lol.gif

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Quote: Phuzzy "Could you explain why "Lenegan Paint Strippers sponsors Sam Tomkins". Would be a problem? It's no different (in terms of this discussion) to "Ford cars sponsors Sam Tomkins". As long as the revenue comes from outside of the club's direct finances it makes absolutely no difference whatsoever. IL is as entitled to spend his money in this way if he so chooses as is Applicado, Engage, Ford or anyone else for that matter! The fact is we would be able to market, and so retain, our (and by that I mean Rugby League's) marketable assets without laying the burden at the door of the sport and it's clubs. Like I say, maybe it's too uncomplicated a solution for the RFL....'"


I would have thought it was obvious. If you are capping certain expenditure such as direct payment through the club (ultimately by IL), then setting up a "dummy" company and "sponsoring" a player is an easy way around it.

From the players perspective, there is no difference from earning £1 a week from the club and £999 a week from the "sponsorship" to earning £1000 from the club.

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Quote: XBrettKennyX "I would have thought it was obvious. If you are capping certain expenditure such as direct payment through the club (ultimately by IL), then setting up a "dummy" company and "sponsoring" a player is an easy way around it.

From the players perspective, there is no difference from earning £1 a week from the club and £999 a week from the "sponsorship" to earning £1000 from the club.'"


It only matters if you care about the mythical level playing field!

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Quote: Deano G "But in any case, your argument doesn't work, because if profit making were enough of an incentive then clubs would have grown their revenue and we wouldn't be having this debate! '"


Well I know that both Saints and Leeds have definitely grown their revenue so my argument works with the two teams with whose revenue totals I am familiar. How are the others doing do you know? I'm guessing the two Hull teams might well have increased their revenue and possibly Huddersfield and Warrington as well. That wouldn't be bad going and would match with the fact that they are also the teams who are consistently in the top eight. If that isn't an incentive for growing your revenue then what is?

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Quote: XBrettKennyX "I would have thought it was obvious. If you are capping certain expenditure such as direct payment through the club (ultimately by IL), then setting up a "dummy" company and "sponsoring" a player is an easy way around it.

From the players perspective, there is no difference from earning £1 a week from the club and £999 a week from the "sponsorship" to earning £1000 from the club.'"



I understand what you're saying BK, what I don't understand is why you see it as a problem. What does it matter where the sponsorship (or any other monies) come from as long as they are not from the club. The point is, clubs can't just set up 'dummy companies', as you call them, to pay players as they would have to be shown in the accounts. It's no more open to abuse than is an envelope stuffed with money. It simply wouldn't happen. Trust me when I say the Tax Man is way too smart for that! If IL wants to sponser a player through one of his other companies then fair enough. He's as entitled to do so as any other business...or at least, should be. I can't see any reasonable argument against it if I'm being honest! It's little or no different in principle than JJB sponsoring the Wigan team when DW was in charge...

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Quote: Deano G "Not sure I follow the second sentence of the second paragraph. Are you suggesting that the cap is too high at present and that 12 clubs are spending money they don't have? If this is true then things are even worse than I thought.
'"



From the last financial year that clubs have issued their accounts for only three clubs turned a profit: Leeds, Hull and Warrington (and Leeds only because of a big one off "windfall" against an option on the stadium) whilst the year before only Hull and Leeds showed a profit. So yes that means each year 12 clubs are spending money they don't have eg expenditure exceeds income = they make a loss.

Considering how veherently you seem to be supporting an increase in the cap the fact you didn't even realise this is astounding. So again where is the additional revenue going to come from to pay increased salaries in a sustainable manner?

Intertesting about sponsors paying players salaries. Where are theses sponsors going to come from? It was only the other season Wigan struggled to find a main shirt sponsor.

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Quote: Paul Youane "From the last financial year that clubs have issued their accounts for only three clubs turned a profit: Leeds, Hull and Warrington (and Leeds only because of a big one off "windfall" against an option on the stadium) whilst the year before only Hull and Leeds showed a profit. So yes that means each year 12 clubs are spending money they don't have eg expenditure exceeds income

I do realise what state clubs' finances are in. They can't afford to pay wages at the level in real terms that they could at the outset of the SC.

Additional revenue will come from increased crowds, merchandising sales and increased sponsorship revenue.

The RFL and the clubs need to bring in some proper business planning and financial controls.

If what you and the other pro-SC people are saying is true, that we can't even aspire in the long term to pay rises in line with wage inflation then we might as well call it a day now and start planning for a semi-professional future for the sport. That's where we'll be in 10-20 years time if we don't change things, so it would be sensible to start talking about that now.

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