Players put pressure on salary cap

New Zealand's professional players are poised to throw next year's 14-team NPC into chaos by rejecting a salary cap proposal designed to cut spending trends and disperse talent around the provinces.

The players will agree to a salary cap as part of their collective agreement but want it set so the major unions can carry on spending at current levels.

The New Zealand Rugby Players Association (NZRPA) will not agree, then, to the New Zealand Rugby Union's proposal that next year, NPC squads can spend a maximum of $2.3 million on player wages, with the figure dropping to $1.7 million by 2008.

The NZRPA believes players will be faced with the option of taking major pay cuts or heading overseas if the cap comes down to $1.7 million in 2008.

Auckland runs with the highest NPC costs which are thought to have come in at about $2.5 million last season.

Operating within the cap would present no significant problems next season but over the next three years Auckland would be required to trim almost $800,000 off their wage bill.

Canterbury and Wellington would have to cut by an estimated $500,000 over the same period. NPC sides normally contract 28 players a season, which means Auckland's players are facing an average cut of $28,500, and Canterbury, Wellington and Waikato $17,500 per man.

The NZRPA is pushing for the limit to be set at a level that will still provide the major unions with the financial freedom to contract all the players they want.

That would effectively prevent the cap from serving its main purpose of distributing talent around the provinces. And if that happens, it has to be asked whether a 14-team division is in the best interests of New Zealand rugby.

The gap between the top five and bottom five teams is considerable.

The NZRU is prepared to tolerate mismatches in the first few years as the smaller unions build competitive squads. But if the cap isn't encouraging player movement it is hard to see how the likes of Manawatu and Hawke's Bay can ever get to the required level.

The innovative formatting of next year's competition will reduce the number of one-sided contests as the best teams will be paired against the best teams from the second round on. But that hasn't stopped the bigger unions worrying they will lose money in the long run as it will be hard to attract major crowds to watch non-competitive fixtures.

The other nine non-Super 12-base unions, who are all in favour of the proposal as it stands, are worried the players will get their way and defeat it.

Northland chief executive Tim Hamilton said: "We formed our bid for Premier Division status on the premise of the Competition Review which stated its intention to create a level playing field. We would like to see a more even competition and there would be frustration and disappointment if there is deviation around the Competition Review format."

Lengthy negotiations loom before the NZRPA signs the collective agreement, and not just over the size of the cap.

The NZRU proposal of getting the limit down to $1.7 million by 2008 includes a nominal payment to Super 12 players. So, though Super 12 players are paid by the NZRU, 40 per cent of a player's Super 12 salary will automatically sit on the NPC balance sheet.

In practice, a player earning between $71,000 and $100,000 in Super 12 will be deemed to be earning a mid-point of $85,000 and $34,000 (40 per cent of $85,000) will be added to the NPC wage bill. If the union also pays that player a salary to play NPC, say $50,000, 40 per cent of that figure - $20,000 - will be added to the wage bill.

Auckland are likely to have as many as 20 contracted Super 12 players in their squad, which could add as much as $700,000 to their wage bill. Canterbury, Wellington, Waikato and Otago will also have big numbers of Super 12 contracted players. If the cap drops to $1.7 million, Auckland will effectively only have $1 million to spend.

The NZRU has to have the cap approved by the Commerce Commission before it can be enforced and that will not happen if it can't get the NZRPA onside.

At this stage it looks a very long bet indeed that the 14-team NPC is going to operate with the financial controls in place to be successful.


- HERALD ON SUNDAY