NRL & AFL shows importance of footynomics & salary caps

Thursday, 25 September 2014  Media Alerts

​“The NRL plays an important role in civic leadership and social issues - and in economics,” said the UNSW Business School’s Tim Harcourt, who has been analysing their economic importance. “You only have to look closely at the data to see how important it is for the Aussie economy and society at large.”

The Sydney Roosters meet the South Sydney Rabbitohs at ANZ Stadium this Friday in the first NRL preliminary final - the first finals showdown between them since 1938.

Tim Harcourt is the JW Nevile Fellow in Economics at the UNSW Business School. “Foreign investors who want to get some profile in the Australian market look at the NRL for its national reach. It a great way to get their brand known in Australia.”

Four Sydney teams playing in the NRL's preliminary finals for the first time, and rugby league's governing body is forecasting bumper crowds. Meanwhile AFL fans are racing to secure seats for the grand final match between the Sydney Swans and Hawthorn at the MCG on Saturday.

He said the AFL wants to grow international participation in the game, serve the Australian expatriate market and international business interests. “The financial side of AFL is increasingly a global proposition. The AFL had also shown it has the ability to recruit in new territories. It recruits in the non-traditional areas that have been typically dominated by other sports. In this sense, they have set a good example to trade unions and political parties suffering from declining membership.”

UNSW academics have also been examining how the complex world of sporting salary caps work. “They are the agreed limit within a sporting code for the amount of money teams can spend on player salaries,” said Clinton Free, an accounting professor at the UNSW Business School.

“Salary caps at their best are crucial levers for leagues and clubs to manage their player rosters and help run the sport. Used inappropriately, they can be a means of cheating the books and illegally holding on to elite talent.”

Melbourne Storm were stripped of five titles for rorting the NRL salary cap in 2010. The NRL is now set to roll out changes to its salary cap next season, including a rise to A$6.3 million per club, and has indicated it may carve out salary cap exemptions for top players in a bid to keep them in the game.

He said salary caps should be designed to create competitiveness and limit the capacity of financially strong clubs to woo all the best players, as well as promoting financial sustainability through the prevention of budget blowouts. “Using salary caps is part of a strategy to appeal to a broader population who may not be a rusted-on fan, but who is drawn in by celebrity and high-profile athletes.”

For further comment call:

Tim Harcourt on 02 9385 3816, 0408 485 479, or tim.harcourt@unsw.edu.au.

Clinton Free on 02 9385 9705 or c.free@unsw.edu.au

Read more at http://www.businessthink.unsw.edu.au/pages/making-the-cap-fit-how-professional-sport-manages-around-salary-limits.aspx

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nrl--afl-shows-importance-of-footynomics--salary-caps