Thursday, March 29, 2007

Stephen Larkham: “That money could be better utilised.”

May 1, 2006

In more Matt Giteau fallout, the Sydney Morning Herald reports his absurd new deal reignites salary cap debate:

Matt Giteau should be remembered as a great Australian rugby player, but in years to come his legacy will probably be that of the bloke who sparked rule changes.

Rugby is the only major football code in Australia whose paymasters are not bound by a salary cap, a fact that led one senior administrator to warn the sport would implode if regulations weren't introduced.

Giteau's groundbreaking $4.5 million, three-year deal to move from the Brumbies to Super 14 rivals the Western Force might just bring about those changes. There may be vocal opposition to a salary cap from the players' union, but even many of its members believe something must be done to stop player payments destroying the game.

"It's really good for Matt that he's got that offer, but I think the system has to change now," injured Test five-eighth Stephen Larkham said during the week. "That money could be better utilised."


In that same newspaper, Ewan McKenzie comments on the worrying signs of Giteau's contract:

Gripped by gold fever

By Ewen McKenzie
Saturday, April 29, 2006

Super League has already shown us that spiralling player payments are unsustainable.

Rugby has catered for the third-party option in its contracting, provided it is not used as an inducement to sign a contract. Given there is a potential profile, you could argue that the Matt Giteau purchase by the Force is legitimate.

I am very concerned, however, because every negotiation on the table at the moment has been struck by MG fever. There is now a perception that there is suddenly all this extra money in rugby when, in fact, the budgets have not changed. The extra money has come from "other" sources. This potential has always been there and will not be curtailed by any regulatory activities, so let's not bother.

The real issue is dealing with unrealistic expectations that the MG decision has created. There is nothing stopping any player manager securing sponsorship for his clients at any time. This is regulated by the commercial viability of players. Peter O'Meara has indicated that realistically this applies to only six or seven players in rugby, and I agree.

What's lost in this is that the players and their managers think there is now more rugby money. MG's manager struck gold in the west. If we are to believe what we are told by the Force then the manager, unassisted by them, door-knocked his way around Perth businesses for a week or two and found $700,000 to $900,000 for MG, rumoured to be a five-year investment by local business.

There is nothing wrong with this approach provided it's sustainable, but I'm not sure it's going to be so easy the second or third time around. The Force will have around 15 players off contract in 2007 and I'm sure right now they are licking their lips.

Other managers are welcome to try the same approach. The only ARU stipulation is that there must be the potential for marketability and no inducement.

Players and their managers should not confuse the process that has happened here. My concern is if unions and managers get confused about players who fall outside the marquee group and start to assist them finding commercial opportunities that in the real world don't exist.

Now we would be getting into a difficult area to control, as we are not really letting market forces regulate. If middle-ranked players were found significant commercial top-ups way outside their profile we would be well on our way to super league status - ie: inflationary wage madness.

Regardless of how you dress it up, professional sport always relies on a spirit of co-operation to make things work. The AFL ploughs on with its draft system regardless of the fact that if challenged in court it would probably fail as a restraint of trade.

The reason it works is that all clubs accept it. When the spirit of co-operation is challenged, we are in difficult territory. The Force have added a new dimension to rugby which is terrific. They need to understand that there has been a spirit of co-operation for 10 years which has built successful rugby brands and a successful code. It would be a massive disappointment to undo this base and take rugby along a well-trodden but treacherous path.

Source: Sydney Morning Herald


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