Why the NRL's salary cap makes no sense

Why the NRL's salary cap makes no sense

I hesitate, of course, to draw parallels with the structure of rugby league and the illegal drug trade, but ... here we go.

(Hold on to your hats, sports fans, this might get ugly.)

Whether you and I like it or not – and I don't – trying to enforce a law against illegal drugs when there is a huge demand for those drugs doesn't work, never has worked, and never will work. When market forces contrive to give an illegal drug that is in high demand the value of "X" dollars a kilo, a simple factor comes into play when you put huge resources behind stopping that drug.

Supply is limited, and people go outside the law to provide it anyway, even as the value goes up to "3X" or "4X" or "10X". So now you want to put even more resources to stopping that drug, put more people into prison dealing in it? OK, it becomes rarer still and it's value is now up to "20X" meaning the Mr Bigs that provide it, are rolling in it!

Four year deal: Anthony Watmough

Four year deal: Anthony Watmough

Photo: Getty Images

As your humble correspondent has long maintained, simply passing a law against something that is in such high demand, moves it beyond regulation, and the net result is the government loses control, and revenue, and the drug itself is more dangerous than ever. The drug is still out there, and the only result is the baddies make profits that would kill a brown dog.

Which brings us of course to rugby league ...

(He pauses. Shifts uncomfortably. Hopes he can bring this off ...)

The current system, as you know, is that rugby league is a fabulously popular game. People love it, television stations pay squillions to broadcast it and the players who provide the raw material for that spectacle are rightly paid a lot of money for that trouble.

But they are not paid their true market worth.

In fact, an illegal cartel formed by their employers, the clubs, under the auspices of the NRL, contrives to pay them well below what they are worth by virtue of the salary cap. Other employees work with the benefit of a minimum wage. The league players work under a collective maximum wage.

The net result, when a whole slew of players have a worth far beyond what they are actually being paid? Well, back in 1995, it resulted in Super League. Rupert Murdoch came in, started a competition of his own, and there was hell to pay. The whole shemozzle was only possible because the players were being paid only a fraction of their worth.

But, here and now, a more obvious example of what happens when a club can afford to pay a player more than the NRL will allow them to pay, is any variety of third-party arrangements. For decades the cliche used to be that they would sign the player for X dollars to play for the club, while employing his wife in the office for 2X – and not worry too much if she didn't turn up. These days, third-party agreements are OK under the rules, with several caveats. One of them as noted in the Herald yesterday is that "salary cap rules forbid any company involved in a commercial relationship with an NRL club to also serve as a third-party agreement sponsor". It is under this regulation that the Eels are being investigated for their TPA with Anthony Watmough.

Ummmm, can I ask what the point of that regulation is? If the Parramatta business community has the wherewithal to come up with the money to bring a player the calibre of Watmough to the Eels, what precisely, is the downside? Where is the conflict of interest, that the TPA is with a club sponsor?

Does it damage Watmough? Clearly not. It gets him closer to his actual market worth.

Does it damage the Eels? Clearly not. Their ranks are stronger for his presence, and he helps make the turnstiles click.

Does it damage the NRL? Obviously not. The more money they can get to their players, particularly money that doesn't come from their own hide, the better. Beyond everything else, it helps keep their players from the ravaging rah-rahs who risk descending from the hills on their regular raids and carrying off their best and brightest to their hilltop citadels to have them play in English, French and Japanese rugby.

So why persist with the nonsense?

Let the players get their market worth, and all is sorted ... except the proclivity of one or two, not Watmough, to partake of illegal drugs ... but that is another story!

Twitter: @Peter_Fitz

Peter FitzSimons

Peter FitzSimons is a Herald journalist, columnist and author, based in Sydney. He is also a former Wallabies player.

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