What Is A Salary Cap, And Who's Broken It So Far?

Salary caps attempt to make sport fair for clubs and fun for fans.

The NRL club the Cronulla Sharks are currently under investigation for a possible salary cap breach while they prepare to play in the game's final series starting next week.

While this news is both shocking and disappointing, it's all too familiar for the Australian sports fan, who has become well-versed in the ways clubs across the NRL and AFL who break the salary cap rules.

READ MORE: Sharks Investigated For Possible Salary Cap Breach 

The salary cap is grounded in an attempt to make sport as fair a possible.

PM ScoMo will be upset that his fave team is under investigation. Image: Getty Images.

Here's what the salary cap actually is and what it means to break it.

What Is A Salary Cap?

A salary cap is the limit a club can pay their playing roster annually. There are strict guidelines for both the NRL and the AFL when it comes to how much the top talent are paid.

NRL- for the top 30 players the salary cap is $9.1 million in 2018, and this figure increases incrementally each year. Players are also entitled to a $200,000 Veteran and Developed Player Allowance plus $300,000 a year for the Retirement Account Contribution and $100,000 from the NRL for administration costs. Players are also entitled to third-party payments that aren't included in the salary cap.

AFL- new rules came into effect in 2017 that saw a 20 percent increase in player income. The salary cap for team is $12.45 million, with the average player wage being $371,000.

Salary caps attempt to make sport fair for all clubs. Image: Getty Images.
Why Sport Needs A Salary Cap

A salary cap for NRL was introduced in 1998 and the AFL imposed one in 1985 and there are a few reasons for this.

  1. The idea is that the best players are spread around so the competition is fair. Without a salary cap a club with more money and resources will be able to offer the best players more money and so they will simply outbid the other clubs.
  2. It protects clubs from getting into debt as they won't be able to spend money they don't have just to be competitive.
Most Famous Salary Cap Breaches In The NRL And AFL

Cronulla Sharks Investigation 2018

The NRL Integrity unit is currently investigating the Cronulla Sharks for possible salary cap breaches that date back to 2015. The Sharks insist that they haven't broken any rules and continue to prepare for the game's finals. It's believed that new chief executive Barry Russel discovered the breach believed to be worth about $250,000 in third- party payments that occurred while the club was under previous management.

READ MORE: Cronulla Sharks Investigated For Possible Salary Cap Breaches

Parramatta Eels 2016

The Eels were found guilty in 2016 of a major breach of the cap that spanned four years. They were reported to be $500,000 over the cap. NRL CEO Todd Greenberg announced the club would be docked the 12 competition points they had accrued during the 2016 season and that they would not earn any more until they fell under the cap. They were also fined $1 million and stripped of their 2016 Auckland Nines title.

Melbourne Storm 2010

The Melbourne Storm salary cap breach was one of the most famous in NRL history. Storm representatives confessed to having a well-managed system of paying players outside the salary cap where they had " two sets of books". This additional amount is believed to be $1.7 million. The break through in the investigation into the breach was when salary cap auditor Ian Schubert discovered a secret room at the Storm where contracts promising players extra payments were hidden.

The Melbourne Storm salary cap breach was one of the biggest scandals in NRL history. Image: Getty Images.

The Storm were stripped of their 2007 and 2009 premierships as well as the 2006, 2007 and 2008 minor premierships and the 2010 World Cup Challenge title.  They were fined $500,000 and made to pay back $1.1 million in prize money. They also had eight competition points earned in 2010 revoked and were made to play for the rest of the season without the ability to earn any points, forcing them to finish last on the leader board.

Canterbury Bulldogs 2002

In one of the earliest salary cap scandals in NRL history, the Canterbury Bulldogs were found to have breached the salary cap by over $1 million in the just two seasons. The club was fined $500,000 for deliberate breaches of the salary cap and they were stripped of 37 competition points, which meant they finished last, when many expected them to win the premiership.

Adelaide Crows 2012

Player Kurt Tippet was fined $50,000 and suspended for half the 2013 AFL season for irregularities written into his contract that saw him earning money outside the salary cap. Chief executive of the club Steven Trigg pleaded guilty to three charges in relation to paying players more and tampering with the season's draft.

Trigg was fined $50,000 and banned from any club for six months. The Crows also copped a $300,000 fine for salary cap breach and draft tampering.

Carlton 2002

Carlton was found guilty of sophisticated and deliberate breaches of the salary cap in 2000, which was a major scandal for the club. These breaches related to 'under-the-table' payments to four players Craig Bradley, Stephen Silvagni, Stephen O'Reilly and Fraser Brown.  The club was fined $930,000 and was stripped of the 2002 and 2003 drafts.