Salary Cap FAQ

[Fraggle]

We seem to have had the same questions about the salary cap several times recently, so here we attempt to answer your questions.

Please feel free to ask new questions, or contribute to answers. My thanks to those people have contributed so far.

1. When did we breach the salary cap?

The overspend occurred during the 2005 season, with the accounts as at November 2005 being audited by the RFL. As a result, on 7th August 2006 Wigan were deducted 2 points for the breach, and also fined £50,000 for "conduct prejudicial to the interests of the game".

2. What are the salary cap rules?

The rules in force for the 2005 season can be found here: http://forums.rlfans.com/viewtopic.php? ... highlight=.

3. To save me reading all that, what were the limits in 2005? Some people say £1.8m, others £1.7m or £1.75m...

The maximum limit for the 2005 season was £1.7m, or 50% of their income, whichever is the lower.

For the 2006 season, this has been increased to £1.75m.

The £1.8m was on old limit, in the earlier years of the salary cap it was as high as £2.3m, but rugby league has seemed to ignore inflation and instead reduced spending limits instead of increasing them to keep up with increasing costs. This finally seems to be changing.

4. Lots of clubs have been penalised this year. Why have other teams only received fines whilst we have been deducted points?

There is a sliding scale of penalties, depending upon the size of the salary cap breach.

14.0 PENALTIES FOR BREACHES OF THE SALARY CAP

14.1 Any club who at the end of the year has a salary cap between 50% and 52% may suffer a possible fine of 100% of the financial breach. This penalty to be imposed except where the breach has, in the opinion of the auditor being the result of unavoidable circumstances.

14.2 Any club who at the end of the year has a salary cap between 52% and 55 % will suffer a penalty of two points deduction or a fine equivalent to 100% of the financial value of the breach, whichever the RFL Board or Judiciary Panel deem most appropriate.

14.3 Any club who at the end of the year has a salary cap between 55% and 60 % will suffer a penalty of four points deduction or a fine equivalent to 100% of the financial value of the breach, whichever the RFL Board or Judiciary Panel deem most appropriate.

14.4 Any club who at the end of the year has a salary cap which exceeds 60 % will suffer a penalty of six points deduction or a fine equivalent to 100% of the financial value of the breach, whichever the RFL Board or Judiciary Panel deem most appropriate.

Wigan broke rule 14.2

5. It's not fair that they announce this so close to the end of the season.

Unfortunately that seems to be how things are done in this country. Wakefield were the first team to be docked points, in late July 2001. Their appeal, which reduced their penalty from 4 points to 2 points, was heard on 9 August 2001 http://news.bbc.co.uk/sport1/hi/rugby_l ... 482690.stm

On 29 May 2003, Saints, Hull and Halifax were also docked points for cap breaches. http://news.bbc.co.uk/sport1/hi/rugby_l ... 946556.stm

Unlike the NRL, the results of our audits are always done mid-season. Audits are carried out between February and mid-March, using information from the previous November which must be submitted by 31st January, and the auditors report their findings to the RFL Board.

6. If we broke the limit last year, surely we have done the same this year by a lot more?

Perhaps, but the difference this year is that we have either sold on or loaned out a large number of players to balance the ones we have brought in. This did not happen last year, so it is perhaps premature to assume we will be worse off in next season's audit.

7. So what about the Stuart Fielden signing, the RFL said we were ok under the salary cap rules?

This relates to the 2005 season, not 2006, so Fielden's signing is irrelevant. Any penalty for an overspend this year will be considered next season.

8. What about the 20/20, 20/25, 20/20/20 rules, what do they mean?

The 20/20 rule in place for the 2005 season meant that clubs could not register more than 20 players on a salary greater than £20,000 each. In special circumstances, eg long term injury, clubs could apply to have players temporarily or permanently de-registered from this to be replaced by others, but such players remain part of the overall salary total.

From 2007, the £20,000 limit is being raised to £25,000, but the limit of 20 players still applies (20/25 rule).

In the earlier days of the salary cap, there was the 20/20/20 rule which expanded on these restrictions, stating that any player who has made more than 20 first team appearances must be paid more than £20,000 and therefore be part of the 20/20 group. This rule was dropped for the 2005 season.

[Mike]

Here are some more usefull questions:

Various questions now added to FAQ...

Didn't someone clarify this with the RFL accountent?

Mike

[Fraggle]

Mike posted:
Didn't someone clarify this with the RFL accountent?

Mike

I think both myself and DaveO emailed the RFL about the salary cap during the off-season. I got a pretty quick reply answering my specific questions, but the information was nothing like as detailed as the full set of rules posted on RLFans.

[Mike]

The Bradford media http://www.thisisbradford.co.uk/sport/s ... breach.php
are reporting the 2005 salary cap limit to be £1.78M

This is not the same as the £1.7M cap that we know of, and is moe consistent with a rounded up figure of £1.8M that all other news sources are quoting.

Are we sure the cap was £1.7M in 2005?

If it was £1.7M, an £80,000 breach is 54.7% (52% limit gives overspend of £34,000)
If is was £1.8M, the overspend is 54.4% (52%= £36,000 overspend)

Not too much difference there I suppose, but I would like this cleared up.

[Fraggle]

Mike posted:
The Bradford media http://www.thisisbradford.co.uk/sport/s ... breach.php
are reporting the 2005 salary cap limit to be £1.78M

This is not the same as the £1.7M cap that we know of, and is moe consistent with a rounded up figure of £1.8M that all other news sources are quoting.

Are we sure the cap was £1.7M in 2005?

If it was £1.7M, an £80,000 breach is 54.7% (52% limit gives overspend of £34,000)
If is was £1.8M, the overspend is 54.4% (52%= £36,000 overspend)

Not too much difference there I suppose, but I would like this cleared up.

I've just dug out my email reply from Steve Williams, Club Accountant at the RFL, last September as I'd asked him directly what the cap limit was, and his reply was:-

2 - The finite limit is £1.7m in 2005, and was £1.8m in 2004

I'd trust the man from the RFL rather than any of the media sources! And if the Bulls were thinking that it was £1.78m, that might explain why they have overspent... :doz:

[GeoffN]

Mike posted:
The Bradford media http://www.thisisbradford.co.uk/sport/s ... breach.php
are reporting the 2005 salary cap limit to be £1.78M

As Fraggle says, whatever the other versions reported in various press articles, the limit posted in the "Official Rules" above is £1.7m

This is not the same as the £1.7M cap that we know of, and is moe consistent with a rounded up figure of £1.8M that all other news sources are quoting.

Are we sure the cap was £1.7M in 2005?

yes.

If it was £1.7M, an £80,000 breach is 54.7% (52% limit gives overspend of £34,000)
If is was £1.8M, the overspend is 54.4% (52%= £36,000 overspend)

Not too much difference there I suppose, but I would like this cleared up.

Now your maths is getting confused, Mike.

Again:
The "finite limit"of £1.7m represents 50% of the allowed income of £3.4m. All percentages quoted are therefore percentages of £3.4m, not £1.7m.
We were allowed to spend 50%, which is £1.7m
We actually spent 52.3%, which is £1,778,200 (i.e. 78,200 over, which has been rounded up to £80k over by the press)
Had we only spent 52%, or £68k over, we'd have got away with a fine...so, effectively, a £10,200 overspend has cost us the 2 points.

[DaveO]

I have just got back from my holidays and am obviously appalled at the points deduction.

Don't have much time to post now except for this email from Steve Williams regarding the cap:

Dave – Sorry for the delay in responding.

The reports are correct in respect of the 20/20 which becomes the 20/25.

The Cap for 2006 is £1750k

In the Cap for 2007 there have been changes in its composition and consequently the level will be £1600k. This is not the reduction it might seem and is purely created by the exclusion of the Employers NI cost from the calculation, which for clubs operating at the finite cap of £1750k is approximately £150k.

The inflationary increase has been waived in favour of excluding Junior/Academy players from the Cap.

If GeoffN calculations are correct then given the moving goal post the salary cap obviously is (I mean would we have broken it last season if Junior/Academy players were excempt?) I find the whole thing ridiculous.

Dave (off to unpack and sulk)

[GeoffN]

DaveO posted:
I have just got back from my holidays and am obviously appalled at the points deduction.

Don't have much time to post now except for this email from Steve Williams regarding the cap:

Dave – Sorry for the delay in responding.

The reports are correct in respect of the 20/20 which becomes the 20/25.

The Cap for 2006 is £1750k

In the Cap for 2007 there have been changes in its composition and consequently the level will be £1600k. This is not the reduction it might seem and is purely created by the exclusion of the Employers NI cost from the calculation, which for clubs operating at the finite cap of £1750k is approximately £150k.

The inflationary increase has been waived in favour of excluding Junior/Academy players from the Cap.

If GeoffN calculations are correct then given the moving goal post the salary cap obviously is (I mean would we have broken it last season if Junior/Academy players were excempt?) I find the whole thing ridiculous.

Dave (off to unpack and sulk)

Welcome back, Dave!

Better late than never (the news, I mean, not your return!)- that's something I've been calling for for ages: one of my biggest gripes is that the whole thing inhibits the development of younger players.
How will they work it when Academy players have to cover in the first team though - will they then become Senior players and have the whole of their salary suddenly included, or would it be on a match -by-match basis?

[Fraggle]

GeoffN posted:
How will they work it when Academy players have to cover in the first team though - will they then become Senior players and have the whole of their salary suddenly included, or would it be on a match -by-match basis?

I guess Chris Ashton is the best example of this, an Academy player who would have expected to play no more than a half dozen games this season but instead has become our regular first-team fullback apart from a couple of games. They might bring back the extra "20" rule so that if a player appears more than, say, 20 times then they qualify as a "senior" player. It does make budgetting difficult though, you might not plan to use an individual so often but as we saw with Rads, we had to play someone at the back when he "retired". How can you leave space in your salary cap just in case one of your junior players ends up being considered as senior player based on whatever criteria they choose?

[DaveO]

Fraggle posted:

GeoffN posted:
How will they work it when Academy players have to cover in the first team though - will they then become Senior players and have the whole of their salary suddenly included, or would it be on a match -by-match basis?

I guess Chris Ashton is the best example of this, an Academy player who would have expected to play no more than a half dozen games this season but instead has become our regular first-team fullback apart from a couple of games. They might bring back the extra "20" rule so that if a player appears more than, say, 20 times then they qualify as a "senior" player. It does make budgetting difficult though, you might not plan to use an individual so often but as we saw with Rads, we had to play someone at the back when he "retired". How can you leave space in your salary cap just in case one of your junior players ends up being considered as senior player based on whatever criteria they choose?

A good question by Geoff and one I think I will ask Steve Williams! Ashton is a great example and if they bring back in the extra 20 or similar it really will be a farce.

The constant tinkering with the cap just shows they don't think these things through well enough form the outset.

Dave