NRL will tighten rules regarding back-ended contracts

The NRL has announced they will tighten the rules surrounding back-ended contracts in an effort to save clubs from salary cap hells of their own making.

Greenberg didn’t want more clubs dragged down by poor planning. (AAP Image/Dan Himbrechts)

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THE volatile NRL player market is ready to become even more frantic with the league to clamp down on controversial back-ended player contracts.

Following a season where the Canterbury Bulldogs were forced to shed a heap of star players after finding themselves engulfed in a salary cap crisis partly due to back-ended deals, a strict tightening of the rules around the problematic contract setups were approved at a CEOs conference in Sydney on Wednesday.

The NRL announced the salary cap auditor would draw up new guidelines restricting how much a player’s payment can rise from one season to the next in their contract.

Greenberg didn’t want more clubs dragged down by poor planning. (AAP Image/Dan Himbrechts)

NRL Chief executive Todd Greenberg said player contracts would not be registered if it discovered anomalies such as paying minimal amounts for the first year or two of deals before significantly increasing payments over the final year.

Set to come into effect in the new year, clubs could struggle to retain stars long-terms if they are unable to back-end deals. That has the potential to create a considerable amount of player movement.

Club CEOs also flagged introducing a trade window for players twice a year, while the NRL warned clubs about the possibility of publishing third-party agreements.

Penrith, Manly and Canterbury were among a number of clubs to experience cap issues in recent years through long-term or back-ended deals.

The Bulldogs have been torn apart by their own salary cap. (Mark Kolbe/Getty Images)

A working group will assist the salary cap auditor and the NRL will hold discussions with the RLPA before the ARL Commission makes a final decision.

“Effectively we will put rules in place to end back-ended contracts,” NRL chief executive Todd Greenberg said.

Eight years ago, Penrith’s salary cap was described as “mess” through then management paying ageing players inflated deals through back-ended contracts.

Penrith suffered to get their salary cap back on track. (AAP Image/Brendan Esposito)

“Back-ended deals are the only thing that will get you into trouble long-term,” Panthers CEO Brian Fletcher said. “If you manage your cap right, there’s never a problem.

“If you’re playing a bloke in year one $300,000 and then make him $500,000 in season two and then $800,000 in the third year — that third year is when clubs can be over and they do things they shouldn’t do because everyone wants to win a comp overnight.

“When Penrith got into trouble, when Phil Gould came to the rescue, our biggest problem was back-ended deals. It took a long time to get our cap balanced. We had to release players and get our cap back into order. This is something that should have been done years ago.

“As for players moving because of this, that will take its own course. That will come down to supply, demand and finances.”

Manly are another club to be struggling with back-ended deals. (AAP Image/Dave Hunt)

Souths CEO Blake Solly attended Wednesday’s meeting, later saying: “The clubs were really supportive of the NRL taking action with back-ended deals. Most clubs have experienced cap issues in recent years because of back-ended deals.”

A high turnover of CEOs and coaches, according to some senior officials, leads to rookie mistakes with club salary caps.

“Historically it’s been up to the clubs to manage their salary caps but there is a clear appetite from the clubs for us to be putting some rules in place,” Greenberg said following Wednesday’s meeting.

“It has become obvious that there is a very small number, albeit problematic, where clubs have got themselves in trouble by putting back-ended contracts into play.

“And that hurt certain clubs. There is a strong desire for us to get involved and make sure it doesn’t happen again. You will stop seeing heavily, heavily inflated contracts at the back and short numbers at the front.

“In really broad terms, what we’re not going to allow is a contract to come on the table for $200,000 the first year and $600,000 the second year. These deals can also give clubs an unfair salary cap advantage in the early years of a contract.”

The Roosters are the benchmark for how to play the cap. (Brett Costello)

Wednesday’s CEO meeting also agreed to set up a working party to investigate the feasibility of a trade window for players, which could be introduced by 2020 and may occur mid-season and post-season

“I do see merit for change,” Greenberg said.

A working party will also investigate “regulations covering coaching contracts” in the wake of a worrying trend of coaches signing with rival clubs while still under contract elsewhere.

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Originally published as NRL will tighten rules regarding back-ended contracts