Canterbury Bulldogs star, Sonny Bill Williams, wants more money. He is currently in the first year of a five year deal with the Bulldogs worth $400,000 a season. He says he is being underpaid.
He is right.
The NRL is starting to lose players to European clubs, not so heavily constrained by such meagre salaries. The wages and sponsorship of Williams, Gasnier, Lockyer et al, on the other hand, are kept artificially low by the NRL salary cap of $4.1mm per club. Williams supports the cap but wants the chance to earn more via sponsorship. This, the NRL correctly replied, is effectively the same as raising the salary cap.
NRL introduced a salary cap in the early 1990s with the laudable goal of increasing competition amongst the League’s teams. Who, goes the thinking, would want to watch a League in which only the richest three or four clubs stood a chance of winning?
Well, half the population of the U.K. for a start. The British Premiership is such a League and you’ll not find any salary caps here. In fact Christiano Ronaldo is currently negotiating a new contract with Man United worth $15mm in wages alone, three times as much as the entire Bulldogs squad combined. At the start of each Premiership season, everyone knows that only Man United, Chelsea and Arsenal have a chance of winning (i’m sorry Liverpool fans – it ain’t going to happen). The rest are there solely to make up the numbers. Hence fan attendance has plummeted and ticket prices are being slashed to try and bring back the fans.
Except it hasn’t and they aren’t.
The Premiership attracts the world’s best players and is watched each week by a global audience of nearly 500 million people. So successful is it that FIFA President Sep Blatter recently demanded that the Premiership restrict the number of foreign players per team. His reasons verge on the xenophobic, are inherently illiberal and are as useless as any other protectionist logic. In reality his opposition stems from the fact that a truly free market in players has created the best teams in Europe. And he doesn’t like it.
In short, the Premiership is a golden example of a fully functioning free market. The fans are coming in ever increasing numbers (despite the annual season ticket price moan), players are free to negotiate contracts bilaterally and come and go as they please and English teams are now the best in the world.
Keep Mr. Williams in Australia. Abolish the cap.