Nix Face Salary Cap Nightmare?

Nix Face Salary Cap Nightmare?

Never mind the Nix, I think if the salary cap was removed then it wouldn't be too long before the whole A League simply imploded.

The FFA / A-League are too smart to let this happen, there'll be a salary cap in the league for many years to come.

Surely we're not the only countries to have salary caps, plus there's also the restrictions on A-League clubs that they can only have 4 overseas players... unless this would also be called "unfair restrictions" and blown out of the water as well.

To be honest common sense would state that these salary caps have their reasons, moreso in sports like football which are not largely dominated by Australiasia like league and rugby.  Then again there are ridiculous lawsuits being won all over the place and we can only hope that even if they do win this hearing the football associations of our countries are sensible enough to either not follow suit or find another way to restrict the budding A-League.

Sonny Bill Williams  (a hot headed 22 year old brat) vs the collective power and smarts of Australian football codes - I know who my money's on.

Think Bosman.

The nix are in one of the stronger positions financially in the A-league, compared to Newcastle. I loved the quote from Durante where he says Newcastle basically ran on the fumes from an oily rag.

Still they won the A-League last year, and this shows how important the salary caps are for keeping the league tight and fair.

i am hoping there is more to the sonny bill wiliams saga otherwise it will be hugely disappointing

The only reason Sonny Bill is coming back with this lawsuit is in the hope that they'll let him go to union and he can earn 3 times what he earns at league. If he loses he is in so much trouble.

I don't think the A-league will be in trouble in the near future.

This is just a reactive statement from SBW, an attempt to mitigate looking like an absolute c*nt for walking out after 1 year of a 5 year contract.

Agree that it is reactive, but things in this part of the world are not as litigious as the rest of the world, remember all of the salary cap, 6+5 issues are mainly due to the European union having an aggressive stance over labour laws, led mainly by some powerful countries like France.

The A-League may be smart in creating the "Marquee" status that allows clubs to pay market rates for people like John Aloisi.

This creates a loophole, that would mean SonnyDill could get the big money if it was available in the NRL.

Restraint of Trade can be a difficult one to define, and my view is that both parties sign a contract in good faith, it should be honoured by both sides. At the time of signing, he probablt thought he was onto a winner, remember he had big injury problems, so his value could have been somewhat reduced.

His problem is he has painted the NRL into a corner. On one hand if the NRL don't let him go then he follows through with his law suit and potentially the salary cap gets declared as illegal by the courts. On the other hand if they let him go then their fear is that he's the thin end of the wedge where the NRL gets plundered by both the European League and Union clubs and in 3 or 4 years time they'll be left with a bunch of reserve grade players to fill the NRL teams.

I think he's left them no other option than to go after him with everything they've got and make an example of him that will scare every other player in the NRL. At this point, unless the NRL's case fails, his only out that doesn't involve personal catastrophe for him financially is to return cap-in-hand, eat some humble pie and go back to the doggies. If they'll have him.

Although that is an important ruling, you have to consider the other rulings as well. such as the Kolpak ruling, which extended Bosman to countries with an associate trading relationship with the EU, most notably the ACP countries and the Webster ruling, a post-Bosman ruling which formalised the 'buy-out' rules for disputed transfers of players still within their contract term

This will mean that next time there should be a "buy out clause" between clubs.

However there are a few notable things in this case to really consider.

1.) This would be the first time anything like this would involved a transfer between codes.
2.) This is between clubs from two different countries. As Australia is not part of the EU but is very much has an associate trading relationship with the EU so the Kolpak ruling goes into Sonny's defence.
3.) As Sonny has only fulfilled one of his five year contract this may challenge a number of things and perhaps extends to the other football codes
            i.) FIFA has now a buy out clause in which an under 28 player can buy out the rest of his contract after three years. A 28 and over player can do so after two years. Should Sonny wins this case, this will be new case evidence gathered for a soccer player challenging this FIFA ruling that was the resulted after the Webster ruling.
            ii.) Salary cap is an unreasonable restraint of trade as well as the long term effects of a five year contract. As it does not seem to be a NRL clause, in which FIFA has already done as the result of Webster ruling, then simply because there is no formalisation of free of trade movement of players in the NRL within their contract period, it is likely that Sonny could succeed in his bid.
4.) The Bosman, Kolpak and Webster ruling does not apply auotmatically to Sonny's case as only Soccer, Basketball and Cricket sports have applied this. But this is only applied in the EU and not in Australian Courts but they are good templates for his defence. As union and league is a minor sports in the EU, it has a very good chance for Sonny to win as there a lack of professionals ply his trade. However if his does not succeed in the Australian courts, then it would very likely he would succeed in the courts for international arbitration on sports.
5.) There is also the question of duty of care to the club because of the secretive nature of his leaving. But that will also be countered by Sonny's saying that he have fears of being heavy handed by club officials thus doing irreparable harm to Sonny. Plus other problems that is most likely to appear between Sonny and the club officials that we did not know about.
6.) There is the question of criminal charges, seizing assets and jailing. This is a bit difficult to check out but basically the assets that he brought on the money he had earned are still his. Anything else that the club has "gifted" to him are his as well and can not be taken about because it is done on good faith. Only "privileges" of good faith from the club can really be withdrawn. However, it may be that the court will ask Sonny to pay reparations to the club at a certain fee, in which he could include the sell of certain assets if he has not the cash.
7.) Because the nature of players able to ply their trade at a certain period of time in their age, the fact remains that the earning capacity can only be available on a limited time span for a player. This argument will support that the salary cap is an unreasonable restraint of trade when given under long contract basis as the trade changes from year to year as well as the nature of good faith.
8.) The argument for the salary cap is that the quota is a protect of the game's infrastructure. However, this has in the past been severely challenged by all clubs in the past as the salary cap has been broken on numerous occasions. The past record will indicate that the salary cap has been very low and unreasonable. With the salary cap not changing with CPI, there would be grounds for unreasonable restraint of trade as the valuation of the players increase by CPI and experience. To reach the top end of the club value without affecting other players value at 22 years of year, there is grounds for unfair market value on the player if the valuation is significantly higher. $3 million in two years is major revaluation of the players services compared to the $450,000 per year for the next 4 years. Thats $900,000 NRL club valuation against $3 million in two years. The serious loss of earning potential is a restriction to his sport trade.

Quite simply, in the courts, the restrictive manner of the sports infrasturcture verses player's freedom to ply his trade to the highest bidder when given the chance.

Because of the nature of being a professional sportman, it is not as clear cut as it would with other written business contracts. His sporting services are unique but the club could replace him with another sportman in the squad, the loss to the club is his unique/quality services not the function of the player in a team. So the price may not be a serviceable as the club would like. It is not ironclad that his services will reap montary returns (winning championship/gate-takings/sponsorship) to the club as no one player is bigger than the squad in order to wins as many other factors are involved.

Also it is close to the nature of someone "retiring" from the sport and since he has not gone to his NRL rivals but rather changed codes and has "virtually" left the sport all together then there is a basis for fair and equitable departure. Although the NRL officials may try and ban him from the sport, this can be overruled because it is not actually a conduct behaviour ruling but rather a contractual one which has mitigating factors involved so he should be able to return regardless of the decision.

Watertight contacts are always broken for the freedom for actors, dancers,comedians and sportmans and other entertainers are always a problem if there is not a get-out clause in the contact because the courts could see it as inequitable contract and therefore void.

Just a few things to either wet your appetite or make it more complex and confusing for you all.
AllWhitebelievr2008-07-29 15:28:56

Very good.

Well thought out piece Allwhitebeliever, interesting thing to me is how the EU jurisdiction interplays with the Australian courts. The ECJ have been very willing (in my limited understanding) to call anything even close to a restraint of trade illegal but in saying that they have no jursdiction in Australia.

Oska2008-07-29 19:04:32

Then, while they're at it....The All Blacks wanting to play overseas for more $$$ can sue the NZRU for restraint of trade when they get dropped from the national team.

The NRL might have problems making anything stick in court because the salary cap is not well policed. It's riddled with individual players receiveing 3rd party sponsorship to stay at specific clubs. SBW can just claim he signed under the impression that he was recieving a top market rate when in fact he wasn't.

WHAT!

No one was forcing him to sign the thing and what could have happened in a year to suddenly make him that unhappy. 1 of two things, either he doesn't like playing for a losing team and while no one likes losing he's supposed to be a professional so suck it up or 2, $3M a year sounds a lot better than $450K and then he's just being greedy.

I know there are a lot of other factors that could have made him unhappy but surely those factors existed a year ago so I'll restate my point, he didn't have to sign the contract in the first place.

Personally I would have thought as a professional sportsman that he would have appreciated the security of a long term contract and if he wasn't happy with the money then why didn't he move to rugby or to the super league back then.

  yeah ok good point, post edited

First, without salary cap, the A league will quickly become a Sydney-Melbourne duopoly, a la Celtic-Rangers.  No question about it.

However, I think this unlikely.  Bosman was about individual employment rights.  Employment contracts are treated differently than other commercial contracts.  Even though we have individual employment contracts, broader constitutional & case law also come into play.  As I understand it, the Bosman ruling was about the limits to which individual employment rights can be contracted away.

Salary caps seem to me quite different.  They are a commercial arrangement entered into between the league and participating clubs re their cost structures.  It is part of two-way consideration, including participation, sponsorship, stadium standards etc.  Hard to see where the infringment of employment rights comes in.  If the courts were to strike it down, I would think that would be a new ruling; don't think Bosman provides precedent.

So right now I'm not worried.  But I'm no lawyer, and this advice is worth exactly what you've paid for it.
Pacwarior2008-07-29 19:16:02

Well you have hit on a few points, but the reality is that Salary Cap restricts the ability for the clubs to pay for the player true valuation and therefore as this player has obviously has a fair greater value than the club is paying him shows that he is a highly regarded commodity.

The question that the Salary Cap brings is that the contract that the players are given prohibits the chance for the player to negotiate his true value and worth. Usually contracts are made in good faith and largely an estimation of the players worth. What is contest here this is the application of this worth on a global competitive scale. The worth of the player under the leagues Salary cap policy is only relevant and comparable between the players within league but not to the global market. So is the contract is fair representation for the player to re-negotiate his value? Therefore does the contract fairly represents the players worth? Yes when you compare to other players in the league and no when you compare to another sporting code form the another country.

So then the salary cap does restricts a player's worth and in doing so the contract prohibits a top player from re-negotiating a better terms and conditions.

Clubs can release players from their contract before their contract period is finished when the player is not useful to their needs. In terms of equity, is the player able to release the club from the contract as well if the club is no longer useful to his needs. There has to be equitable mean for both parties. Other factors includes whether the club has made all the necessary means to provided the ideal club environment for the player as stipated in the contract and whether any conflicts were followed as to the clubs procedures and whether these procedures are up to suitable equity as well.

So really there is problems with the salary cap the spiral down affect to the club and then down the the players. Salary Cap deals with the amount of income that a club is able to give the players as a collective and then divided into the written individual contract between the player and the club. What another player income in the same club gets, affects the other players incomes and re-negotiation of terms and conditions. this is were the infringment of employment rights comes in. BTW the Boshan ruling is not direct as it is a ruling in the EU but that ruling as well as the Webster ruling has bearing in this case because of the mitigating arguments it presents as a case in point. So not as a ruling but as a point by point representation from the players point of view for their arguments.

yeah, I kinda opened my eyes a bit when I heard rumours that a doctor was giving Sonny Medical advice that his knee wouldn't last and was pressured into signing for 5 years incase he suffered a career ending injury...sounds quite dodgy to me.
I sure don't agree with what he did to his team-mates (and most importantly to his country leading up to the WC) but something fishy is going on.
Either he and his lawyers have a plan or he is just down right stupid....

I am impressed by allwhitebelirs post. he obviously has more knowledge than me on the subject but what I dont understand is how all the leagues that operate under salary caps within the EU gets around it?
It shouldnt be too hard for the Australian leagues to use the same loophole, should it?

Or are they allowed to continue just because there havent been anyone that has challenged their salary cap in the European court?

If I also remember correctly, the EU ministers propsed a format that would allow salary capped leagues and this proposal was put forward by the Portuguese sports minister and the proposal was sent of to the comittee.
This new blueprint is now part of the Treaty of Lisboa if I understand it correctly. The treaty of Lisboa will be signed and implemented one way or the other that is something that is pretty certain, despite the Irish No, within 12 months. At least if we are to belive the french, spanish, italian and german etc presidents and they probably know more than the UK tabloids on this subject...

There's a slightly dated, but still very good post and discussion at this blog on the salary cap issue in European Football: http://elitefootballtalk.blogspot.com/2005/12/salary-cap-practical-solution-to.html some good comments here particulalry with  respect to EU law, and some discussion on various notable case law.

This issue about freedom of contract and football players has been discussed quite a bit recently with the petulant Cristiano Ronaldo saga in Europe.  Why is  a football player unable to exercise the same rights as any other employee and give notice to resign his employment and take up another job?  I don't know the answer except that there is a huge amount of cash at stake, and that footballers have a registration that is owned by a club, unlike other employees.  However, whether a footballer-employee can up sticks and go whenever they want seems to me to be largely unrelated to the salary cap issue.  Obviously the salary cap will affect what salary can be offered to a player, and hence the likelihood of players seeking to move to other clubs, but one issue relates to the relationship of clubs to the organising body, and the other relates to the relationship of employees to employers.  Whether contracts can be enforced or not by clubs does not necessarily decide the validity of the salary cap system.

League only need to bring in the marquee signing (or two) that the A-League use. That would have enabled the bulldogs to pay SBW what they thought he was worth. That would've also allowed the Warriors to get Price and Wiki and not get penalised for breaching the cap. Royal2008-07-30 10:37:14

I wish people wouldn't carry on about how SBW let down his team mates. I'd bet that most of them would do the same if in his shoes. In fact I'd bet that most of you reading this would also jump ship if someone offered you double your salary to do the same job for them. Of course there are considerations regarding moving overseas etc, but how much thought would you give to Sally in Accounts if you received a big offer to work down the road?

Big difference between Sally in Accounts and the guys who thought they were your mates after you had trained and played alongside them for some time.

As for most of us doing it,i for one cant comprehend just up and walking away without speaking to my supposed mates in the team.From the comments i have read some of the Bulldogs players are gutted and they have every right to be.What makes it worse is the news today that he know has a Samoan passport as that makes it easier to play in France,so there goes the sudden decision theory.
Or maybe he just wants the quick cash because he hasnt completed an NRL season due to injuries and realises he is operating on a smaller playing time than he had hoped for.

plus, 20% went to his shifty manager, so he's down $600,000 out of the $3mill before he plays. That's if Toulon actually sign him.

Back to the A-League, they've got it right allowing a marquee which gives each team the right to hire a SBW equivalent.

I hope Terry/Tony/Ricki don't sign an SBW equivalent... his left foot is sh*te and he's poor in the air.