The retirement of Billy Slater and Sam Thaiday is set to result in a dramatic fall in the total value of third party agreements, with the star duo responsible for up to 25 per cent of earnings from private sector TPAs between them.
Salary cap allegations against Cronulla have sparked renewed debate about third party agreements but the NRL revealed earlier this year that there had been a sharp decline in private sector TPAs since 2016, and that trend is expected to continue.
While some clubs argue that TPAs should be capped or scrapped as they favour one-town teams such as Slater's Melbourne and Thaiday's Brisbane, others point out that rules were loosened after Greg Inglis was almost lost to the game and Israel Folau's return from AFL was blocked.
The salary cap breaches by Parramatta in 2016 and Manly this year involved illegal third party agreements, while the investigation into the Sharks is over an unreported TPA and some believe that such practices would become more prevalent if the NRL introduced greater restrictions.
The overall value of all third-party agreements is forecast to drop from 13.1 per cent of the salary cap in 2016 to 6.4 percent this season, including:
- Marquee player allowances, capped at $600,000 per club;
- Whole of game sponsorship leveraging, often with State of Origin sponsors or government organisations;
- Tools of trade, usually contra deals for boots or headgear; and
- Arm's-length agreements, which are private deals between players and sponsors.
Of most significance is the reduction in private sector TPAs from $5.68m to $3.76m in the past two years.
This represents a halving from 5 percent of the value of the $7.1m salary cap in 2016 to 2.5 per cent of this year’s $9.4m ceiling for player payments.
The $3.76m is shared between 93 players but two – understood to be Melbourne’s Slater and Brisbane’s Thaiday - earn 25 per cent of that amount between them.
Slater has well documented TPAs with Australian Bananas and Powerade, while Thaiday has deals with media companies and a number of government and indigenous organisations in Queensland.
The pair have been able to secure such deals because of their wide-reaching appeal and they are likely to continue after they retire.
Another six stars, including Storm captain Cameron Smith, earn the next 25 per cent of third sector TPAs, with 11 more players receiving a further 25 per cent.
Of the other 74 players who share the remaining $940,000, 43 of them receive $10,000 or less.
Deals between players and private sponsors not associated with their clubs comprised 53 per cent of all TPAs last year, with a further 20 per cent being in the form of marquee player agreements and 19 per cent from whole of game sponsorship leveraging.
In total, 198 players had some form of third party agreement – of whom 164 were State of Origin or Australian, England or New Zealand internationals.
Melbourne had the highest value of private sector TPAs, totalling $788,000 last season.
Brisbane and Penrith had $550,000 each, while only one other club totalled more than $300,000 and six clubs were below $100,000 in private sector TPAs.
The NRL is undergoing a review of third party agreements and one CEO told NRL.com they should be capped or scrapped completely as one-city teams such as the Storm, Broncos, Cowboys and Warriors have an advantage over their rivals.
However, another official from a non-Sydney team said the NRL would risk losing star players to other codes if they weren’t able to boost their income from third party agreements.