Melbourne Storm salary cap breach

June 10, 2010

Joel Cosgrove, June 2010

Much has been written about the Melbourne Storm and their repeated breaching of the salary cap. Although there has been much comment on the issue, the vast majority has been shallow and generally misses some pretty obvious points.

To recap. The Australian National Rugby League (NRL) has a salary cap, the cap for 2010 is AU$4.69 million for the 25 highest paid players at each club. The Storm from 2006-10 breached the cap by at least AU$1.85 million in a process that involved two sets of financial accounts, a calculated fraud. The scandal came out when an insider at the club notified the NRL who then acted on the systemic breach.

Newstalk ZB talkback host Murray Deaker, talking on his show, made the point that the Storm breaching the salary cap was not an oddity; it is a process at the centre of things. Since 1991 there have been at least 50 instances of clubs being fined for serious or minor breaches of the cap. Deaker raised the point further by saying that the salary cap scandal was comparable to the recent financial crisis, in that greed is at the centre of things and that when you commercialise something greed becomes a part of it.

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