The salary cap, rugby league’s great equaliser of playing talent, is about to undergo its first proper review, with smaller elite squads and exemptions for international player signings to be discussed.
The NRL is poised to form a taskforce to examine the salary cap, a move that will have huge ramifications for the 17 existing clubs and the two new franchises that will soon join the competition.
Introduced by the NSWRL in 1990, the cap has been credited with levelling the playing field, stopping clubs from spending themselves into oblivion and giving all supporters hope that their team can prevail on any given day.
While there is no suggestion the cap will be scrapped, league powerbrokers want a full examination of whether tweaks could improve the system, given it has operated largely unaltered for 35 years.
While it has been argued the salary cap does not allow any team to stay at the top or bottom for too long, recent history suggests otherwise. Penrith have contested the past five grand finals, winning four of them, and are one of only three teams to taste premiership success – the others are Melbourne and the Sydney Roosters – in the past eight years.
There has been little movement at the bottom of the ladder as well: Wests Tigers are this year attempting to avoid their fourth straight wooden spoon.
“What we’ll do is commit to a review and put a team together from all parts of the game – the RLPA [Rugby League Players’ Association], the agents, the coaches and a few others – to have a look at the whole salary cap situation,” ARL Commission chairman Peter V’landys said.
“It hasn’t had a proper review for a long time.
“It’s not my idea; it came from a club CEO. He said it was time for it to be looked at, and I agree with him. Andrew [NRL chief executive Andrew Abdo] and I have been talking about it, so once the commission signs off on it, we will implement it.
The Penrith Panthers celebrate their fourth straight grand final triumph in 2024.Credit: Getty Images
“Everything will be looked at – squad sizes, do we give exemptions to international players – all of these different things will be looked at.”
The review is timely, given there are concerns about how the new expansion teams will be able to build competitive rosters. PNG will enter the league in 2028, while Perth are expected to do so a year earlier.
One leading club official, likely to be invited onto the taskforce, believes the only way for the new teams to be competitive is for the current top-30 squad size to be reduced to a top-25. That would result in 85 contracted players becoming free agents, which could be picked up by the Perth or PNG franchises.
The flow-on effect would be that players would receive a pay rise, as there would be less of them at each club jostling for the same pool of salary cap funds.
Other issues likely to be considered include compliance – there have been three major salary cap scandals, involving the Bulldogs, Melbourne and Parramatta – third-party agreements and greater rewards for players loyal to one club.
The issue of whether to introduce trade windows could also be examined.
The salary cap: key points
- Introduced into the NSWRL in 1990.
- The current salary cap limit for each club’s top-30 squad, including allowances, is $11.8 million.
- At the conclusion of the existing collective bargaining agreement, which ends in 2027, that figure will rise to $12.1 million.
- While a PNG team will also be governed by the salary cap when it enters the NRL in 2028, player earnings will be tax-exempt.
“It could form part of that; we haven’t finalised the terms of reference,” V’landys said. “Once we finalise those … we’ll get it going straight away.”
The salary cap limit for each club’s top-30 squad, when car and veteran players’ allowances are factored in, is $11.8 million. That figure will rise to $12.1 million once the current collective bargaining agreement expires at the end of 2027.
While there have been calls to allow Perth and PNG to be given a recruitment head start on existing clubs, V’landys said that won’t happen.
“No, it will be the first of November,” V’landys said of the rule about when clubs can begin negotiating with free agents.
“We won’t disadvantage any of the current clubs.”
The NRL has previously toyed with the idea of introducing a “war chest” that would result in head office subsidising the signing of players poached from rival sports. However, that option is off the table.
“The NRL won’t be paying for any players, that won’t be happening,” V’landys said.
“That war chest is long gone. The beauty of our competition is that every club is treated the same. [They will] naturally think you have a bias if you give your war chest to one club over another club.”
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