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NRL to fine Parramatta Eels $1 million for salary cap breaches

NRL to fine Parramatta Eels $1 million for salary cap breaches
May 3, 2016

The Parramatta Eels are to be docked 12 competition points and fined $1 million by the NRL for salary cap breaches.

Preliminary findings by the NRL’s Integrity Unit found that the Parramatta Rugby League Club had been operating a system designed to enable it to exceed the salary cap without detection and give its team an unfair advantage since at least 2013.

The investigation found that a series of payments were either hidden from the NRL or misrepresented as suitable for exclusion from the salary cap and that these actions were taken with the knowledge and approval of various club Directors and senior executives.

As a result of these preliminary findings the NRL has today issued the Parramatta club with a breach notice proposing that:

• The club will be fined the maximum penalty of $1 million (with $250,000 suspended if the club accelerates governance reforms within a specified time frame)
• The Parramatta Eels will be docked all competition points accumulated so far this season while their team was in breach of the salary cap. The club will be able to begin accruing points as soon as it makes the necessary changes to comply with the 2016 cap. This includes shedding players
• The club will be stripped of its Auckland Nines competition title won earlier this year

The preliminary findings are a major blow to the Eels' hopes for the NRL season with the club standing in fifth place after round nine. They but now drop to zero points.

The NRL has also issued notices asking three members of the club's board and two of the executive to show cause why their registrations should not be cancelled.

They are Chairman Steve Sharp, Deputy Chairman Tom Issa, Director Peter Serrao, Chief Executive John Boulous and Football Manager Daniel Anderson.

Parramatta has been given the opportunity to respond to the breach and last week engaged a law firm to prepare for a legal battle.

The NRL stressed that these penalties are recommendations from the integrity unit's preliminary findings and will not be imposed before the club has the chance to respond.

NRL Chief Executive Todd Greenberg said that if the preliminary findings prove to be justified then these serious sanctions will be required given the club's conduct over salary cap management.

Greenberg stated "as the governing body, we have a responsibility to act in the interests of the game for the long term.

“At times, it gives us no pleasure to have to do so and this is one of those.  But we have to take a stand on behalf of the fans, the club and the game.

Greenberg said the club had been fined for breaches of the salary cap rules in five of the last six years and now it had been exposed for operating a system designed to cheat the cap.

He added "we will need to take a stand on behalf of the fans, the club and the game.

“This would be a tough outcome for many people, particularly the players and fans, but we believe it would be the start of a process to make the Parramatta club the powerhouse it should be.

“Unfortunately, we may have to go through this pain for the long term health of the club and the game.”

Last year Parramatta was fined $465,000 and put on notice for salary cap breaches in 2015.

It was given until the end of February by the NRL to bring its books into order and enact 52 governance reforms or lose four competition points for the 2016 competition.

The NRL was satisfied that it had met those requirements and Parramatta Chairman Sharp said in March the club was implementing 117 reforms under advice from Price Waterhouse Coopers.

New investigations began following allegations emerging in February that the Eels had failed to disclose that a company sponsoring a third-party deal for Anthony Watmough was a wholly owned subsidiary of the club.

Sharp has been heavily criticised during the latest salary cap scandal and on Monday at the club's annual general meeting night he said he would resign from his position if it would spare the club losing points.

The NRL's decision follows previous action to strip points from the Canterbury Bulldogs in 2002, New Zealand Warriors in 2006 and Melbourne Storm in 2010.

The Bulldogs were stripped all of its 37 points and fined $500,000 for salary cap breaches totalling $2.13 million between 2000 and 2002. As a result the club finished with the wooden spoon in 2002.

The Warriors were found guilty of salary cap breaches to the value of $1.1 million over 2004 and 2005 and as a consequence lost four points at the start of 2006.

In 2010 the biggest salary cap scandal hit when Melbourne was stripped of its 2007 and 2009 premierships, 2006-2008 minor premierships, fined $1.689 million and barred from receiving premiership points in 2010.

Image: Parramatta Eels 2016 promotion (middle - courtesy of Facebook) and Todd Greenberg (below).

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