Salary Cap

[DimmestStar]

1 hour ago, The Future is League said:

With inflation running at around 8% the salary cap is retracting in real terms, unless the salary cap rises by 8% and that's not going to happen

The reason is that unfortunately TV income is running at MINUS 35%. 

[Damien]

27 minutes ago, DimmestStar said:

The reason is that unfortunately TV income is running at MINUS 35%. 

That isn't a valid excuse when it hasn't risen in line with TV income for 22 years.

[Dave T]

My personal view is that the cap should be linked to the revenues the clubs drive. So it should be set at something like 40% (or whatever is seen as optimal) of total average revenues. So if we average £6m per club then the cap would be £2.4m. If a weaker club only brings in £3m and can't afford £2.4m then that's tough tbh. 

I think linking it to revenues is fairer for players. If they are the valuable commodities within the sport, they should be better off when revenues increase. 

[Tommygilf]

3 minutes ago, Dave T said:

My personal view is that the cap should be linked to the revenues the clubs drive. So it should be set at something like 40% (or whatever is seen as optimal) of total average revenues. So if we average £6m per club then the cap would be £2.4m. If a weaker club only brings in £3m and can't afford £2.4m then that's tough tbh. 

I think linking it to revenues is fairer for players. If they are the valuable commodities within the sport, they should be better off when revenues increase. 

I agree generally with the sentiment, and I suppose the clubs that want to spend more can drive that average up collectively too (though they may not want to necessarily).

Do we actually know what our club's revenues are? How many are in 8 figure sums?

[Tommygilf]

14 hours ago, Damien said:

That isn't a valid excuse when it hasn't risen in line with TV income for 22 years.

Quite.

A bad thing about the previous TV deal where roughly £1.8 million was distributed to each Super League club was the idea, from Nigel Wood I believe as part of his pitch, that the TV deal would "cover" the salary cap for each club. That effectively froze the game at a stagnant level, when it had already been stagnant for a while, for even more time. 

It also changed the emphasis of the Sky TV deal. No longer was it a significant investment that helped clubs pay the cap, for some it was the only major investment full stop. Owners aren't needed to put money in if the cap is paid by Sky. The rest can be ran on the club shoestring revenue. Obviously this couldn't last and now we see the problems with Salford having their well off but not wealthy director mortgaging his home to secure what are relatively small (in sports team terms) debts on the club and Wakey effectively not running a SL quality squad. 

The marquee rules and other dispensations that have come in subsequently, along with the drop in TV funding, has at least put a bit more emphasis on owner investment in the clubs. However, I think the attitude still remains about getting as much out of as little spending as possible in some aspects of the sport, to our detriment.

[nadera78]

1 hour ago, Dave T said:

My personal view is that the cap should be linked to the revenues the clubs drive. So it should be set at something like 40% (or whatever is seen as optimal) of total average revenues. So if we average £6m per club then the cap would be £2.4m. If a weaker club only brings in £3m and can't afford £2.4m then that's tough tbh. 

I think linking it to revenues is fairer for players. If they are the valuable commodities within the sport, they should be better off when revenues increase. 

The NHL salary cap is based on a similar principle, with the players entitled to 50% of what's known as Hockey Related Revenue. It works pretty well for what is and has always been the 4th of the big 4 sports (in some ways similar to RL tbh, although they've expanded in a way we could only dream of).

[Dave T]

1 hour ago, Tommygilf said:

I agree generally with the sentiment, and I suppose the clubs that want to spend more can drive that average up collectively too (though they may not want to necessarily).

Do we actually know what our club's revenues are? How many are in 8 figure sums?

I expect it probably is around the £5m mark on average, so it would then depend on what % they deem appropriate. 

But I think it removes the constant debates, it is linked to income and isn't just left to voting and negotiation. 

[Dave T]

1 minute ago, nadera78 said:

The NHL salary cap is based on a similar principle, with the players entitled to 50% of what's known as Hockey Related Revenue. It works pretty well for what is and has always been the 4th of the big 4 sports (in some ways similar to RL tbh, although they've expanded in a way we could only dream of).

That's interesting. It feels a reasonable approach to me. 

[Dave T]

1 hour ago, Tommygilf said:

Quite.

A bad thing about the previous TV deal where roughly £1.8 million was distributed to each Super League club was the idea, from Nigel Wood I believe as part of his pitch, that the TV deal would "cover" the salary cap for each club. That effectively froze the game at a stagnant level, when it had already been stagnant for a while, for even more time. 

It also changed the emphasis of the Sky TV deal. No longer was it a significant investment that helped clubs pay the cap, for some it was the only major investment full stop. Owners aren't needed to put money in if the cap is paid by Sky. The rest can be ran on the club shoestring revenue. Obviously this couldn't last and now we see the problems with Salford having their well off but not wealthy director mortgaging his home to secure what are relatively small (in sports team terms) debts on the club and Wakey effectively not running a SL quality squad. 

The marquee rules and other dispensations that have come in subsequently, along with the drop in TV funding, has at least put a bit more emphasis on owner investment in the clubs. However, I think the attitude still remains about getting as much out of as little spending as possible in some aspects of the sport, to our detriment.

I've often made the point that the word sustainability has become something of a problem for us. I accept that it was needed, we settled things down and broadly speaking clubs are in a better shape than pre-SL and it has certainly helped with things like Covid and tv reductions etc. 

But, there really does need to be an element of aspiration in any sport. I think RU has been a bit reckless, but we have been too focused on balancing books when there is a middle ground that would see some excitement and ambition that could be managed through some limits. 

Even the exciting things we do suffer from this. Magic is a perfect example. It's an exciting innovation, but it's all done as cheap as possible. 

[Tommygilf]

7 minutes ago, Dave T said:

I've often made the point that the word sustainability has become something of a problem for us. I accept that it was needed, we settled things down and broadly speaking clubs are in a better shape than pre-SL and it has certainly helped with things like Covid and tv reductions etc. 

But, there really does need to be an element of aspiration in any sport. I think RU has been a bit reckless, but we have been too focused on balancing books when there is a middle ground that would see some excitement and ambition that could be managed through some limits. 

Even the exciting things we do suffer from this. Magic is a perfect example. It's an exciting innovation, but it's all done as cheap as possible. 

Agree 100%

Sustainability is great, but it is rather boring.

I hadn't considered your point about Magic  but again absolutely right. A Great idea, but it seems like a lot of what makes it good is in spite of the organisation of it being on the cheap. 

Its in these areas that I think we can see a lot of good improvement, and with things like Magic being RFL/SL properties, IMG and RL Commercial have direct control over them. 

[Big Picture]

2 hours ago, Tommygilf said:

I agree generally with the sentiment, and I suppose the clubs that want to spend more can drive that average up collectively too (though they may not want to necessarily).

Do we actually know what our club's revenues are? How many are in 8 figure sums?

More than likely, none are in 8 figure sums.  Wigan's accounts for 2019 (the last pre-pandemic normal year) listed revenues of 6.6 million pounds and a loss of slightly over 900,000 pounds.

2 hours ago, Tommygilf said:

Quite.

A bad thing about the previous TV deal where roughly £1.8 million was distributed to each Super League club was the idea, from Nigel Wood I believe as part of his pitch, that the TV deal would "cover" the salary cap for each club. That effectively froze the game at a stagnant level, when it had already been stagnant for a while, for even more time. 

It also changed the emphasis of the Sky TV deal. No longer was it a significant investment that helped clubs pay the cap, for some it was the only major investment full stop. Owners aren't needed to put money in if the cap is paid by Sky. The rest can be ran on the club shoestring revenue. Obviously this couldn't last and now we see the problems with Salford having their well off but not wealthy director mortgaging his home to secure what are relatively small (in sports team terms) debts on the club and Wakey effectively not running a SL quality squad. 

The marquee rules and other dispensations that have come in subsequently, along with the drop in TV funding, has at least put a bit more emphasis on owner investment in the clubs. However, I think the attitude still remains about getting as much out of as little spending as possible in some aspects of the sport, to our detriment.

Owners shouldn't need to put money in over and above what they paid to buy a club.  Top-level pro sports clubs ought to be generating enough revenue to pay all their expenses and make a profit, they shouldn't be losing money at all.

[Tommygilf]

7 minutes ago, Big Picture said:

Owners shouldn't need to put money in over and above what they paid to buy a club.  Top-level pro sports clubs ought to be generating enough revenue to pay all their expenses and make a profit, they shouldn't be losing money at all.

You've never come across European football have you?

[Big Picture]

9 minutes ago, Tommygilf said:

You've never come across European football have you?

I'm well aware that European soccer has money-losing clubs too, that just shows that the European model based on the jeopardy of P&R is a bad business model for major pro sport and the franchised North American model (also found down under in the AFL and NRL) a good business model for it.

[Wigan Riversider]

Salary cap is, always has been and always will be a joke IMHO.

[eal]

What is the salary floor?

[Tommygilf]

31 minutes ago, eal said:

What is the salary floor?

There isn't one. There's a minimum wage iirc, but this was reduced during covid and never returned to previous levels. It was £12.5k iirc.

[HawkMan]

19 hours ago, Big Picture said:

I'm well aware that European soccer has money-losing clubs too, that just shows that the European model based on the jeopardy of P&R is a bad business model for major pro sport and the franchised North American model (also found down under in the AFL and NRL) a good business model for it.

Someone really should tell the  billion pound generator that is the Premier League that their business model is bad and they need a closed shop. I'm sure masses of fans attending promotion play offs would agree. Also LaLiga  Bundesliga Serie A etc really should discount their global appeal that the NRL can only dream about and scrap their model too.

Tonight in Hamburg there's likely to be a 50,000 plus crowd for a p+r playoff.

Not to mention 85,000 for Championship and League 1 play off finals in England. 

Edited June 5, 2023 by HawkMan

[Saint Toppy]

On 03/06/2023 at 18:44, Damien said:

There is no need for a finite limit to keep teams equal. There are far better ways to do that if that was the real purpose. Its not.

Talent distribution was only part of the reason the SC was introduced, the other being to try and stop clubs from bankrupting themselves by spending more than they could afford in an attempt to be at the top. The level of the cap is set such that all SL clubs should be able to generate enough income to be able to spend up to the full cap limit.

The fact there are still some clubs unable to spend up to £2.1M shows that the game isn't that financially strong enough to look at increasing it further without potentially serious repercussions.

[Damien]

6 minutes ago, Saint Toppy said:

Talent distribution was only part of the reason the SC was introduced, the other being to try and stop clubs from bankrupting themselves by spending more than they could afford in an attempt to be at the top. The level of the cap is set such that all SL clubs should be able to generate enough income to be able to spend up to the full cap limit.

The fact there are still some clubs unable to spend up to £2.1M shows that the game isn't that financially strong enough to look at increasing it further without potentially serious repercussions.

It does nothing to stop clubs bankrupting themselves.

Edited June 5, 2023 by Damien

[Saint Toppy]

28 minutes ago, Damien said:

It does nothing to stop clubs bankrupting themselves.

Tell that to Wigan who pre-cap bought up every top player they could, dominated the game and very nearly went under as a consequence. They were originally planned to sell the club to Dave Whelan who had promised to build a new stadium for both football & RL clubs but so deep were Wigan in financial trouble Robinson sold the ground up to Tesco instead to pay off some of the massive debts and then had to move into the DW as rent boys only.

The cap in its current guise may not be perfect but it certainly serves a purpose, particularly for those clubs still recovering from the Covid situation.

[Bedfordshire Bronco]

5 minutes ago, Saint Toppy said:

Tell that to Wigan who pre-cap bought up every top player they could, dominated the game and very nearly went under as a consequence. They were originally planned to sell the club to Dave Whelan who had promised to build a new stadium for both football & RL clubs but so deep were Wigan in financial trouble Robinson sold the ground up to Tesco instead to pay off some of the massive debts and then had to move into the DW as rent boys only.

The cap in its current guise may not be perfect but it certainly serves a purpose, particularly for those clubs still recovering from the Covid situation.

Is there a consensus on whether owning a stadium is better or worse for a club?

Genuine question 

[Saint Toppy]

Just now, Bedfordshire Bronco said:

Is there a consensus on whether owning a stadium is better or worse for a club?

Genuine question 

An old decaying stadium is a huge financial drain, a new stadium that you own brings in massive additional revenues from match day drinks & food etc. through to it being used for other events. Renting a stadium means you miss out on all the extra revenue generation

[Damien]

8 minutes ago, Saint Toppy said:

Tell that to Wigan who pre-cap bought up every top player they could, dominated the game and very nearly went under as a consequence. They were originally planned to sell the club to Dave Whelan who had promised to build a new stadium for both football & RL clubs but so deep were Wigan in financial trouble Robinson sold the ground up to Tesco instead to pay off some of the massive debts and then had to move into the DW as rent boys only.

The cap in its current guise may not be perfect but it certainly serves a purpose, particularly for those clubs still recovering from the Covid situation.

Oh dear, the bitterness just oozes out of every pore. I'll just ignore that much of this is completely wrong because its irrelevant to the debate.

The salary cap does not stop clubs going bankrupt, that's a fact. Bradford and Toronto did. Salford only didn't, and haven't, because of Koukash and countless Council loans. Others are still propped up by backers saving them. The salary cap hasn't prevented any of that.

[Saint Toppy]

3 minutes ago, Damien said:

Oh dear, the bitterness just oozes out of every pore. I'll just ignore that much of this is completely wrong because its irrelevant to the debate.

The salary cap does not stop clubs going bankrupt, that's a fact. Bradford and Toronto did. Salford only didn't, and haven't, because of Koukash and countless Council loans. Others are still propped up by backers saving them. The salary cap hasn't prevented any of that.

You just keep thinking the cap is the root of all evil and a game without it will be all rainbows & unicorns 

[Damien]

Just now, Saint Toppy said:

You just keep thinking the cap is the root of all evil and a game without it will be all rainbows & unicorns 

I dont, you do like to make things up don't you?

Its a thread about the salary cap and the recent changes. The clue is in the title, staggering I know. If you wish to discuss something else move to a different thread.