Salary caps are, in essence, a measure implemented by many sporting leagues around the globe which help to ensure a level of competitive equality across all teams. Some leagues simply don’t use them, meaning teams with lots of money are able to far more easily attract quality players than the rest, but fortunately the NRL does not fall into that category.
What’s the NRL salary cap and how does it work?
The way the NRL salary cap works is simple — there is a maximum amount of money that clubs are allowed to pay their entire playing list over the course of the season, and that’s it. In other leagues it’s a lot more complicated — some leagues have salary caps which can be exceeded in certain circumstances, while others simply tax teams extra if they pay their players more than a certain amount. In the NRL, it’s a lot more simple.
Over the past few years the salary cap has sat at a little under $10 million, and it has been growing rapidly over the past decade. Just ten years ago, that number sat at $4.4 million, while as recently as 2017 it was at $7 million. After consistent growth, however, the salary cap has been cut by 6% over the next two seasons, meaning in 2021 it will sit at $9.024 million and in 2022 at $9.11 million.
Do teams have to abide by the salary cap?
They sure do. As mentioned, certain other leagues around the world have what’s known as a ‘soft cap’, which means it can be exceeded, but that’s not the case in the NRL. Teams don’t have to necessarily reach 100% of the cap — they can spend less and use that money elsewhere — but they do have to pay the four minimum wage earners on their list $77,500 per year. Other than that, they are free to pay each player what they please, as long as they don’t exceed the cap implemented for that particular season.
Numerous teams in the past have made the mistake of creeping over this limit, with the Melbourne Storm the most infamous example. Indeed, rather than just creeping over it, they committed ‘serious and systematic breaches’ of it, and the punishment was about as severe as it gets. They were stripped of their 2007 and 2009 Premierships, their 2006, 2007 and 2008 minor Premierships, and fined $1.689 million. They managed to bounce back and have continued to be successful since then, winning again in 2012, 2017 and 2020 and are one of the NRL Premiership favourites in 2021, but the penalty was a reminder of just how serious a role the salary cap plays in the NRL.
It exists to ensure competitive parity, and while there are invariably some teams who are consistently more successful than others, each team should theoretically be able to spend time competing for Premierships if the club is run well. Courtesy of this cap, no one team can stock up on an inordinate amount of the league’s talent, ensuring that it is, at least to an extent, spread evenly across the league. There are a number of equalisation measures the NRL employs to ensure this competitive parity but the salary cap is arguably the most important, and without it, the league would be very different to what it is today.
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