NRL salary cap fine could break Cronulla Sharks, with club already set to make $4 million loss
EVEN with the NRL’s $13 million grant, Cronulla are on track for big financial losses — meaning a potential six-figure salary cap fine could cripple the former premiers.
Sharks
Don't miss out on the headlines from Sharks. Followed categories will be added to My News.
A POTENTIAL six-figure fine from the salary cap scandal could cripple cash-strapped Cronulla, who are on track to lose another $4 million this year despite a record grant from the NRL.
The Daily Telegraph understands the Sharks lost $4 million last year and are on the verge to match that figure again, even with the NRL’s $13 million grant
PUNISHMENT: Fears Sharks could lose Holmes
FOX IT: Why does this keep happening?
Any potential salary cap fine could be damaging to the club. A host of clubs have been significantly stung in recent years. Manly were fined $750,000 earlier this year while Parramatta’s penalty topped $1 million. Canterbury ($500,000), the New Zealand
Warriors ($430,000) and Melbourne ($1.689 million) have been among the heaviest fines in NRL history.
Cronulla trumpeted their $300 million property development as the club’s saviour in 2014. The deal helped pay off the club’s $13 million bank debt but has yet to prove the ongoing financial stability the club has long craved.
Residents moved into stage two of the Woolooware Bay development site in June with another two stages to come.
Sharks boss Barry Russell admitted the club had financial “challenges”.
“The club financial position at the moment — we have challenges but we have an unbelievable development,” Russell said. “Which you will see by the residential units being built. We have an amazing retail shopping centre, commercial hotel and residential units being built. The future for our club is very exciting.”
Cronulla have also underspent more than $500,000 on their salary cap for this year despite pushing for a second premiership in three years.
While there were suggestions the underspend had occurred because of cash flow problems, The Daily Telegraph has learnt the club intends to spend their full cap by October 31. That could mean forward paying some of its current stars, including Valentine Holmes.
Coach Shane Flanagan has board approval to spend the full cap by the end of this season.
“We are very prudent in the way we spend,” Russell said. “Shane plans things out, we’re working with him.
“This year we’ve been fortunate enough to keep some power dry.”
Russell confirmed he had self-reported a potential salary cap problem he had discovered after being appointed as the club’s chief executive in February.
The former Sharks halfback said the issue was limited to the 2015 season and was a third-party payment made to a player no longer at the club.
“I made it my mission to ensure the integrity and reputation of this great club was upheld,” Russell said.
“Part of my initial role when I started was to conduct a full governance review. Like any new CEO I wanted to have a good look at the business. In doing that I came across some salary cap discrepancies relating back some years ago which I felt weren’t appropriate and weren’t within the NRL guidelines.
“I took it upon myself to contact the integrity unit and self-declare these discrepancies. I wanted the reputation of our club, given our past, to be intact.
“I’ve allowed the integrity unit to come in and download information from our server and other information or hardware they required. We have nothing to hide. I want to get to the bottom of any issues or discrepancies which I believe we’re doing. I envisage this investigation will go through until the off season.
“It is nowhere near the amounts previous clubs have been breached for. I don’t want to speculate on any individual, but past and present employees are being investigated as part of this investigation.”
The Sharks employed former NRL salary cap auditor Jamie L’Oste Brown midway through this year to prevent such issues arising. L’Oste Brown spent a decade working as an NRL salary cap auditor and was chief salary cap auditor in 2015.
“I brought (L’Oste Brown) into the organisation to assist me to ensure we have best practice governance in that area,” Russell said.
Get 3 months free Sport HD + Entertainment on a 12 month plan and watch every game of every round of the 2018 NRL Telstra Premiership on FOX SPORTS. T & Cs apply. SIGN UP NOW >