Salary Cap Breach Case Study
Introduce the case facts
In 22 April 2010, News from The Age claimed that the Melbourne Storm rugby league club was involved in a long term salary-cap breach scandal. "They had a long term system of effectively two sets of books and the elaborate lengths they have gone through to cover this up has been extraordinary," said NRL chief David Gallop (2003).
It was disclosed that the Storm had been paid $1.7 million to their players for the past five years and including roughly about $700,000 in year 2010. However, this amount was over the salary cap amount, and strictly not allowed (NRL, 2010). According to NRL (2010), Gallop said "These payments have allowed them to employ and maintain some of the best players in the game. There's no option for the NRL in terms of penalty." …show more content…
DeKroo & Malone (2010) claimed that, Melbourne Storm had been punished by the NRL (National Rugby League) after being found guilty of long term salary cap breaches.
Firstly, Melbourne Storm had been stripped of their two premierships, which in year 2007 and year 2009, and three minor premierships in year 2006 to 2008. Secondly, their eight competitions point during year 2010 season had been cancelled, and disqualified from getting premiership points for the rest of the season. Thirdly, Melbourne Storm had been fined in total $500,000, and finally, they had forced to repay $1.1 million in prize money with the prize money being distributed evenly among the other 15 NRL clubs.
NRL (2010) chief David Gallop emphasised that Melbourne Storm was facing the hardest penalty for a salary cap breach case in NRL history.
By doing this, the Storm have disappointed their fans "In doing so they have let down the game, the players and the fans of the Melbourne Storm (Barrett, 2010).”
NRL claimed that, everyone knew the rules, particularly after year 2002, Bulldogs cases. For those who wish to challenge the rules must know what is the consequence after been caught
(2010).
On 22 April 2010 morning, the Melbourne Storm spokesperson had confessed that they have involved in a long term salary-cap breach (The Daily Telegraph, 2010).
The investigation was in charged by salary cap auditor, Ian Schubert. During the inspection, they discovered a file that contained player’s contracts and a letter that had been approved the extra payments were hiding in home of Former CEO (Chief Executive Officer) of Melbourne Storm, Brian Waldron (DeKroo & Malone, 2010).
After this case had exposed, Brian Waldron resigned from his position of CEO, and NRL believed that acting chief executive, Matt Hansen and Chairman, Rob Moodie were suspected have involved in this case as well (DeKroo & Malone, 2010).
Lastly, NRL point out that, “Clearly there were some individuals who knew what was going on and perhaps many who did not (2010) “.
Ethical issues
Based on the case facts, the Decision-Maker in this situation is, particularly, the senior management personnel / higher authorities of Melbourne Storm. This is because the NRL investigators have discovered a file that contained player’s contracts and a letter that had been approved the extra payments were hiding in the home of Former CEO (Chief Executive Officer) of Melbourne Storm, Brian Waldron. Furthermore, after the scandal have disclosed, Brian Waldron had resigned his CEO position and some of the senior management personnel have been suspected by NRL as well.
In addition, first, senior management personnel of Melbourne Storm have to aware of not to breach their salary cap amount from NRL. If their over using the salary cap, they will be caught, and having a big trouble.
Second, to having a better reputation and increase the club fans amount, the senior management personnel have to spend more money buying top players in order to win every competition and premiership. However, by doing this, they will break the rules by breaching the salary cap.
In 22 April 2010, News from The Age claimed that the Melbourne Storm rugby league club was involved in a long term salary-cap breach scandal. "They had a long term system of effectively two sets of books and the elaborate lengths they have gone through to cover this up has been extraordinary," said NRL chief David Gallop (2003).
It was disclosed that the Storm had been paid $1.7 million to their players for the past five years and including roughly about $700,000 in year 2010. However, this amount was over the salary cap amount, and strictly not allowed (NRL, 2010). According to NRL (2010), Gallop said "These payments have allowed them to employ and maintain some of the best players in the game. There's no option for the NRL in terms of penalty." …show more content…
DeKroo & Malone (2010) claimed that, Melbourne Storm had been punished by the NRL (National Rugby League) after being found guilty of long term salary cap breaches.
Firstly, Melbourne Storm had been stripped of their two premierships, which in year 2007 and year 2009, and three minor premierships in year 2006 to 2008. Secondly, their eight competitions point during year 2010 season had been cancelled, and disqualified from getting premiership points for the rest of the season. Thirdly, Melbourne Storm had been fined in total $500,000, and finally, they had forced to repay $1.1 million in prize money with the prize money being distributed evenly among the other 15 NRL clubs.
NRL (2010) chief David Gallop emphasised that Melbourne Storm was facing the hardest penalty for a salary cap breach case in NRL history.
By doing this, the Storm have disappointed their fans "In doing so they have let down the game, the players and the fans of the Melbourne Storm (Barrett, 2010).”
NRL claimed that, everyone knew the rules, particularly after year 2002, Bulldogs cases. For those who wish to challenge the rules must know what is the consequence after been caught
(2010).
On 22 April 2010 morning, the Melbourne Storm spokesperson had confessed that they have involved in a long term salary-cap breach (The Daily Telegraph, 2010).
The investigation was in charged by salary cap auditor, Ian Schubert. During the inspection, they discovered a file that contained player’s contracts and a letter that had been approved the extra payments were hiding in home of Former CEO (Chief Executive Officer) of Melbourne Storm, Brian Waldron (DeKroo & Malone, 2010).
After this case had exposed, Brian Waldron resigned from his position of CEO, and NRL believed that acting chief executive, Matt Hansen and Chairman, Rob Moodie were suspected have involved in this case as well (DeKroo & Malone, 2010).
Lastly, NRL point out that, “Clearly there were some individuals who knew what was going on and perhaps many who did not (2010) “.
Ethical issues
Based on the case facts, the Decision-Maker in this situation is, particularly, the senior management personnel / higher authorities of Melbourne Storm. This is because the NRL investigators have discovered a file that contained player’s contracts and a letter that had been approved the extra payments were hiding in the home of Former CEO (Chief Executive Officer) of Melbourne Storm, Brian Waldron. Furthermore, after the scandal have disclosed, Brian Waldron had resigned his CEO position and some of the senior management personnel have been suspected by NRL as well.
In addition, first, senior management personnel of Melbourne Storm have to aware of not to breach their salary cap amount from NRL. If their over using the salary cap, they will be caught, and having a big trouble.
Second, to having a better reputation and increase the club fans amount, the senior management personnel have to spend more money buying top players in order to win every competition and premiership. However, by doing this, they will break the rules by breaching the salary cap.