Please Explain The NRL Player Contracts!

[MightyMaggy]

For some years, I was responsible for the selling and signing of commercial contracts for the supply of products, which could be worth up to hundreds of thousands dollars per year. It was normal in these commercial contracts to have financial protection for both parties, where the other party failed to meet their part of the deal. If, we as the supplier failed to meet our supply undertaking, the purchaser could ask for financial recompense. If the purchaser failed to uptake their agreed minimum volume, we could charge them, as though they had purchased the stated minimum. In my training, admittedly some years ago, these contracts were **legal and binding**.
Whenever I raise questions about the Wests Tigers player contracts, I am told the contracts are NRL contracts. I assume this means the contracts have been prepared in accordance with the requirements of the NRL, so that the NRL can approve the contract.
If this is so, why do not both parties have to meet the legal terms of the contract and if either party does not, the other party should be recompensed.
**Please**, would someone with an understanding of the NRL contracts explain to me, why WestsTigers should be paying anything to Robbie Farah for the next two seasons, if he does not meet his contracted obligations of playing for the Wests Tigers?
Do the NRL contracts force the NRL Clubs to pay the player the monies agreed, even if **the player does nothing for the Club?**
Do the NRL contracts force the NRL Club to play the player, even though he may play for another NRL Club **against the NRL Club to whom he is contracted**?
If the **player asks to be relieved of his responsibilities under the contract**, why does the **NRL Club** have to continue meet their obligations outlined in the contract?

 

[2041]

For some years, I was responsible for the selling and signing of commercial contracts for the supply of products, which could be worth up to hundreds of thousands dollars per year. It was normal in these commercial contracts to have financial protection for both parties, where the other party failed to meet their part of the deal. If, we as the supplier failed to meet our supply undertaking, the purchaser could ask for financal recompense. If the purchaser failed to uptake their agreed minimum volume, we could charge them, as though they had purchased the stated minimum. In my training, admittedly some years ago, these contracts were **legal and binding**.
Whenever I raise questions about the Wests Tigers player contracts, I am told the contracts are NRL contracts. I assume this means the contracts have been prepared in accordance with the requirements of the NRL, so that the NRL can approve the contract.
If this is so, why do not both parties have to meet the legal terms of the contract and if either party does not, the other party should be recompensed.
**Please**, would someone with an understanding of the NRL contracts explain to me, why WestsTigers should be paying anything to Robbie Farah for the next two seasons, if he does not meet his contracted obligations of playing for the Wests Tigers?
Do the NRL contracts force the NRL Clubs to pay the player the monies agreed, even if **the player does nothing for the Club?**
Do the NRL contracts force the NRL Club to play the player, even though he may play for another NRL Club **against the NRL Club to whom he is contracted**?
If the **player asks to be relieved of his responsibilities under the contract**, why does the **NRL Club** have to continue meet their obligations outlined in the contract?

I don't think NRL contracts have any particular legal status over and above normal fixed-term employment contracts, other than presumably carrying numerous additional clauses.

The bottom line is this. If you're a boss and you want to fire an employee, you have a number of options. One is gross misconduct, which clearly isn't going to work in Farah's case unless the club wants to end up in legal battles for the next decade and never have a another free agent sign for them. The next is redundancy. Again, unless the Tigers are going to make the hooker position redundant (already impossible once they signed Ballin) this isn't going to fly.

So really all the club is left with is negotiating a mutually acceptable settlement. Basically, the Tigers have no grounds on which to fire Farah or make him redundant, so they're left with what amounts to asking him to resign. Which obviously he's not going to do unless (a) someone else offers him an acceptable deal or (b) the Tigers compensate him sufficiently that it's still worthwhile to take a less good deal from elsewhere.

Farah's position currently is that he will resign, but only if the club pays him the full value of his contract. Otherwise he is still prepared to fulfill the terms of that contract.

As for playing for someone else, this isn't part of contract law unless you include non-compete clauses in contracts. No NRL player would ever sign a contract with a non-compete clause, so presumably where Farah earns his living after departing the Tigers isn't in the club's hands. The dispute is purely and simply about how much the club is prepared to pay to be rid of him, and how much he's going to demand in order to leave. What he gets offered elsewhere will no doubt inform the second of those two facts, but it doesn't have much if any bearing on the first.

 

[MightyMaggy]

Thanks, 2041, for your information on player/employee contracts.
However, if the player/employee asks for a release from the contract, that is HE wants a release from his responsibilities under the contract, why doesn't this release the Club from their responsibilities under the contract?

 

[2041]

To give an example, let's say I'm doing my job and making $100k a year and my boss decides my face doesn't fit. I can't be sacked for gross misconduct because I'm doing everything I'm meant to, and I can't be made redundant because my boss fully expects to hire someone else to directly replace me.

Unfortunately for my boss, the only job offers I can get are for a company miles away, where I don't want to work, and for a company down the road which looks great but only wants to pay me $60k. He can hope that my sense of pride will see me walk anyway, but unfortunately my sense of pride goes the other way: I've been here longer than him and I've outlasted incompetent bosses in the past, so I decide to sit tight.

At this stage all he can do is suck it up and accept that I'm going to be there for a while (which - awkward - because he's already hired the guy he had in mind to replace me) or offer me some sort of settlement to convince me to quit.

Unfortunately by this stage word has spread round the industry, because there are only a few companies in it and most of them already have people doing my job or can't afford to hire anyone more. Which means that the good job down the road has now reduced its offer to $30k, because the employer knows that my current one can't afford to keep me (because - oops - they've already hired my replacement and everyone knows their business is in trouble already) so will have to give me that inducement to quit.

So on Monday morning I walk into my boss's office and say, listen R Sole (the company is called R Soles and Sons), if you want me gone it's gonna cost you. I want a full payout and the right to come back when you're gone, which will be in about three weeks if past experience is anything to go by.

 

[2041]

Thanks, 2041, for your information on player/employee contracts.
However, if the player/employee asks for a release from the contract, that is HE wants a release from his responsibilities under the contract, why doesn't this release the Club from their responsibilities under the contract?

Because the language "requested a release" is misleading in this case. Most players seeking a release are doing so because someone else has offered them more money. This isn't the case here. Remember, Farah got told he could look elsewhere. What's happened here is that he's effectively saying "I've looked elsewhere and this is the best deal I can come up with, which is a lot less than what I'm currently making. I'm in a position to ask to be released from my contract (as you, the club, asked me to do) but only if you pay it out. Otherwise I withdraw the request to be released and remain available to fulfill the terms of the contract."

 

[ricksen]

Players are effectively contracted to the NRL, rather than the clubs, are they not?
From what I understand the NRL holds the contracts, and the players are simply 'registered' at their respective clubs.

 

[batboy]

Thanks, 2041, for your information on player/employee contracts.
However, if the player/employee asks for a release from the contract, that is HE wants a release from his responsibilities under the contract, why doesn't this release the Club from their responsibilities under the contract?

Because the language "requested a release" is misleading in this case. Most players seeking a release are doing so because someone else has offered them more money. This isn't the case here. Remember, Farah got told he could look elsewhere. What's happened here is that he's effectively saying "I've looked elsewhere and this is the best deal I can come up with, which is a lot less than what I'm currently making. I'm in a position to ask to be released from my contract (as you, the club, asked me to do) but only if you pay it out. Otherwise I withdraw the request to be released and remain available to fulfill the terms of the contract."

HAHAHA….
Yeah, He's tried to upper hand the club - The club has the money.... Therefore will ALWAYS have the upper hand.
Seems to have backfired on him somewhat.

Funny the Roosters only have 100k for Farah - How much will they have for Hayne (Who is best mates with Farah funnily enough)

 

[batboy]

For some years, I was responsible for the selling and signing of commercial contracts for the supply of products, which could be worth up to hundreds of thousands dollars per year. It was normal in these commercial contracts to have financial protection for both parties, where the other party failed to meet their part of the deal. If, we as the supplier failed to meet our supply undertaking, the purchaser could ask for financal recompense. If the purchaser failed to uptake their agreed minimum volume, we could charge them, as though they had purchased the stated minimum. In my training, admittedly some years ago, these contracts were **legal and binding**.
Whenever I raise questions about the Wests Tigers player contracts, I am told the contracts are NRL contracts. I assume this means the contracts have been prepared in accordance with the requirements of the NRL, so that the NRL can approve the contract.
If this is so, why do not both parties have to meet the legal terms of the contract and if either party does not, the other party should be recompensed.
**Please**, would someone with an understanding of the NRL contracts explain to me, why WestsTigers should be paying anything to Robbie Farah for the next two seasons, if he does not meet his contracted obligations of playing for the Wests Tigers?
Do the NRL contracts force the NRL Clubs to pay the player the monies agreed, even if **the player does nothing for the Club?**
Do the NRL contracts force the NRL Club to play the player, even though he may play for another NRL Club **against the NRL Club to whom he is contracted**?
If the **player asks to be relieved of his responsibilities under the contract**, why does the **NRL Club** have to continue meet their obligations outlined in the contract?

I don't think NRL contracts have any particular legal status over and above normal fixed-term employment contracts, other than presumably carrying numerous additional clauses.

The bottom line is this. If you're a boss and you want to fire an employee, you have a number of options. One is gross misconduct, which clearly isn't going to work in Farah's case unless the club wants to end up in legal battles for the next decade and never have a another free agent sign for them. The next is redundancy. Again, unless the Tigers are going to make the hooker position redundant (already impossible once they signed Ballin) this isn't going to fly.

So really all the club is left with is negotiating a mutually acceptable settlement. Basically, the Tigers have no grounds on which to fire Farah or make him redundant, so they're left with what amounts to asking him to resign. Which obviously he's not going to do unless (a) someone else offers him an acceptable deal or (b) the Tigers compensate him sufficiently that it's still worthwhile to take a less good deal from elsewhere.

Farah's position currently is that he will resign, but only if the club pays him the full value of his contract. Otherwise he is still prepared to fulfill the terms of that contract.

As for playing for someone else, this isn't part of contract law unless you include non-compete clauses in contracts. No NRL player would ever sign a contract with a non-compete clause, so presumably where Farah earns his living after departing the Tigers isn't in the club's hands. The dispute is purely and simply about how much the club is prepared to pay to be rid of him, and how much he's going to demand in order to leave. What he gets offered elsewhere will no doubt inform the second of those two facts, but it doesn't have much if any bearing on the first.

In a black and white picture (Like the one you've painted) I'm sure underperforming at your job for many years could be considered mis-conduct - It would be in any other job….

 

[balmain boy]

Example of different types of 'releases':

Taupau wanted to leave of his own accord to earn more, he asked for a release - so we owed him nothing, pay him nothing for next season, and as we didn't really want to get rid of him we asked for an incentive to do so (Ballin).

Robbie didn't want to leave, we asked him to find alternate employment, he's reluctantly willing to do so on the proviso that we top up any contract offers he receives to ensure his total salary isn't less than what he's entitled to if he stays.

Why would he walk away from a 2 million dollar deal for 2 years, so he can take up a 400k deal with another team? It's the end of his career and he wants to set himself up for life. He's entitled to that $2 million and we have agreed that he will get what he's entitled to, but we want another club to pay some of his contract, for example $600-700k of that 2million. We don't want to release him for $1.8 million and have another club pay peanuts for the rest of his contract.

From his point of view the more we pay, the less another club pays and subsequently the more options he's likely to have as cap space becomes less of an issue.

 

[hammertime]

I think the underlying point to the top of the thread is that Robbie has requested the release with the condition that he is paid his contract in full. All players will request this, but at different subsidy levels. Blokes like Taupau would have been released with no ongoing payment. I think you could even find sometimes that the other club would pay the Tigers a bonus release sum if they wanted someone badly.

A nullification of the contract has to be accepted by both parties. In Robbies case with no (or very little) subsidy, it wouldn't be accepted by the Tigers with that condition.

However, if the Tigers are subsided $300k p.a. in the release, both cash and cap, then they might accept that.

 

[jirskyr]

My understanding, this latest manoeuvre is the same as when Sheens took legal action against the club.

There has been a dispute, one party has made their position fairly clear, and the other party has been weighing up their options. Sheens forced WT to court to get his settlement, which he was entitled to do.

Until last Friday, all Farah had done was engage legal counsel and fight a fairly damaging PR battle in the media. With the post-season break, he did not have official duties to fulfill, so there was really no front-line activity in this dispute; it was very much behind-the-scenes.

Now that he is back in full training, back in regular contact with those he holds dispute, the issue has come to a head. Now I'm not saying any of this is particularly fair, but Tigers have been fairly consistent about their position: signing Ballin, Farah giving up the captaincy (which I personally take as a face-saving move by all parties, because Farah has no automatic entitlement to the captaincy, but nobody wanted to see him "stripped" of it) and making official statements that Farah will be entitled to his full contract.

If Farah had ambitions of staying on at the club and going about his normal duties, clearly he was not comfortable with the long-term arrangement he was facing. It would almost be certain that he has been trying to work an alternative solution with a rival club, before coming back to WT to force a resolution.

That happened last Friday, and by requesting a release with full payout, Farah has provided the club a counter-offer. It's a ridiculous counter, there is no way the club will pay him out in full just to go to play for a rival. There is no legal requirement for Tigers to do this either. But it is a starting point in negotiations. Farah must feel in a strong enough position to make this silly request, trying to get on the high side of negotiations. The club will meet him somewhere, and he is trying to make it as costly as possible.

It's actually a positive outcome in many ways, because without another club to go to, Farah was not going to just pack up and leave, and the issue would continue to cause damage. If Farah has another option, now we just have to go through the short-term pain of negotiations.

So back to MM, no, Tigers do not have to pay out Farah in full if he is not going to perform duties. There will be some point of mutual agreement to nullify or amend the contract, which is legally fine, though not necessarily painless.

 

[2041]

For some years, I was responsible for the selling and signing of commercial contracts for the supply of products, which could be worth up to hundreds of thousands dollars per year. It was normal in these commercial contracts to have financial protection for both parties, where the other party failed to meet their part of the deal. If, we as the supplier failed to meet our supply undertaking, the purchaser could ask for financal recompense. If the purchaser failed to uptake their agreed minimum volume, we could charge them, as though they had purchased the stated minimum. In my training, admittedly some years ago, these contracts were **legal and binding**.
Whenever I raise questions about the Wests Tigers player contracts, I am told the contracts are NRL contracts. I assume this means the contracts have been prepared in accordance with the requirements of the NRL, so that the NRL can approve the contract.
If this is so, why do not both parties have to meet the legal terms of the contract and if either party does not, the other party should be recompensed.
**Please**, would someone with an understanding of the NRL contracts explain to me, why WestsTigers should be paying anything to Robbie Farah for the next two seasons, if he does not meet his contracted obligations of playing for the Wests Tigers?
Do the NRL contracts force the NRL Clubs to pay the player the monies agreed, even if **the player does nothing for the Club?**
Do the NRL contracts force the NRL Club to play the player, even though he may play for another NRL Club **against the NRL Club to whom he is contracted**?
If the **player asks to be relieved of his responsibilities under the contract**, why does the **NRL Club** have to continue meet their obligations outlined in the contract?

I don't think NRL contracts have any particular legal status over and above normal fixed-term employment contracts, other than presumably carrying numerous additional clauses.

The bottom line is this. If you're a boss and you want to fire an employee, you have a number of options. One is gross misconduct, which clearly isn't going to work in Farah's case unless the club wants to end up in legal battles for the next decade and never have a another free agent sign for them. The next is redundancy. Again, unless the Tigers are going to make the hooker position redundant (already impossible once they signed Ballin) this isn't going to fly.

So really all the club is left with is negotiating a mutually acceptable settlement. Basically, the Tigers have no grounds on which to fire Farah or make him redundant, so they're left with what amounts to asking him to resign. Which obviously he's not going to do unless (a) someone else offers him an acceptable deal or (b) the Tigers compensate him sufficiently that it's still worthwhile to take a less good deal from elsewhere.

Farah's position currently is that he will resign, but only if the club pays him the full value of his contract. Otherwise he is still prepared to fulfill the terms of that contract.

As for playing for someone else, this isn't part of contract law unless you include non-compete clauses in contracts. No NRL player would ever sign a contract with a non-compete clause, so presumably where Farah earns his living after departing the Tigers isn't in the club's hands. The dispute is purely and simply about how much the club is prepared to pay to be rid of him, and how much he's going to demand in order to leave. What he gets offered elsewhere will no doubt inform the second of those two facts, but it doesn't have much if any bearing on the first.

In a black and white picture (Like the one you've painted) I'm sure underperforming at your job for many years could be considered mis-conduct - It would be in any other job….

Underperforming at your job is grounds for dismissal if you have been through a well-documented process of verbal and written warnings, continuous assessment and KPIs. If an employer says to you that they have decided, with no previous communication, that you've been no good for years and you're now being sacked as a result then you'd have a cast-iron case for unfair dismissal.

You absolutely cannot, in whatever industry, sack people purely because you now think you're overpaying them. They've signed a contract to do X duties for Y money and "we think Y is a bit too much for how much X you're giving us" is not grounds for dismissal. You can make them redundant (but only if they aren't replaced), or you can go through an extensive 'managing out' process which takes lots and lots of dialogue and documentation. But you can't just say 'you're no good, you're fired' to someone who has been working at a place for more than a decade without ever being warned about underperformance.

This is not to mention the fact that even if the Tigers tried to say Farah had been, to use your words, "underperforming… for many years" they wouldn't have a leg to stand on at the inevitable court case that would follow. Farah's lawyers would say, ok, if this guy has been underperforming why did you keep picking him for the first team, make him captain, use him in promotional activities, and never give him any warnings? Why did he get picked for NSW and Australia?

Even more, if the Tigers tried to boot Farah for underperformance I can guarantee that no agent would let their client sign with the club ever again. This team will give you a contract then try to wheedle their way out of it if they change their mind. It's utterly unsustainable.

 

[batboy]

Yes mate, I know, And I agree with you… You're dead on.
As an employer of more than a few people for more than a little while - I have "some" understanding of how that all works, That still doesn't mean it's right.
From my point of view - If your paid to do a job, And you're not doing it...
You shouldn't expect to be paid top dollar for it.

 

[2041]

Yes mate, I know, And I agree with you… You're dead on.
As an employer of more than a few people for more than a little while - I have "some" understanding of how that all works, That still doesn't mean it's right.
From my point of view - If your paid to do a job, And you're not doing it...
You shouldn't expect to be paid top dollar for it.

Sure. But I also think it isn't right that employers can just change their minds and cut off people's living because they decide they can do better. If I'm in Farah's shoes, I'm thinking "well hang on, you gave me this contract two years ago when other clubs wanted me and so far as I'm concerned I've worked as hard as I can to fulfill it - I'm not going to conveniently disappear because you've got buyer's remorse".

 

[batboy]

Point taken mate….
I feel Buyers remorse doesn't appear if Buyers feel they are getting what they paid for
(And what was promised to them)?
As a customer - How would you feel if you took a Ferrari for a test drive, It was amazing - Then signed up to pay it off drove it 10 k's and then it started driving like a clapped out combie?
I think the whole system is floored
- Like Manly signing DCE for "Life"
What happens if now (Being only a human) he decides - I'm set for life, Now I just gotta go through the motions once a week... And don't get injured - What happens if he stops caring (As employees do since the dawn of time) Shouldn't the employer have some recoil?

 

[stevetiger]

To give an example, let's say I'm doing my job and making $100k a year and my boss decides my face doesn't fit. I can't be sacked for gross misconduct because I'm doing everything I'm meant to, and I can't be made redundant because my boss fully expects to hire someone else to directly replace me.

Unfortunately for my boss, the only job offers I can get are for a company miles away, where I don't want to work, and for a company down the road which looks great but only wants to pay me $60k. He can hope that my sense of pride will see me walk anyway, but unfortunately my sense of pride goes the other way: I've been here longer than him and I've outlasted incompetent bosses in the past, so I decide to sit tight.

At this stage all he can do is suck it up and accept that I'm going to be there for a while (which - awkward - because he's already hired the guy he had in mind to replace me) or offer me some sort of settlement to convince me to quit.

Unfortunately by this stage word has spread round the industry, because there are only a few companies in it and most of them already have people doing my job or can't afford to hire anyone more. Which means that the good job down the road has now reduced its offer to $30k, because the employer knows that my current one can't afford to keep me (because - oops - they've already hired my replacement and everyone knows their business is in trouble already) so will have to give me that inducement to quit.

So on Monday morning I walk into my boss's office and say, listen R Sole (the company is called R Soles and Sons), if you want me gone it's gonna cost you. I want a full payout and the right to come back when you're gone, which will be in about three weeks if past experience is anything to go by.

This is a great post. Voted up.

 

[Moh]

I know Taupau asked for a release, but that was obviously because Manly negotiated a deal… I always thought that clubs were not allowed to negotiate with a player with more than a year on his contract left?

 

[2041]

Point taken mate….
I feel Buyers remorse doesn't appear if Buyers feel they are getting what they paid for
(And what was promised to them)?
As a customer - How would you feel if you took a Ferrari for a test drive, It was amazing - Then signed up to pay it off drove it 10 k's and then it started driving like a clapped out combie?
I think the whole system is floored
- Like Manly signing DCE for "Life"
What happens if now (Being only a human) he decides - I'm set for life, Now I just gotta go through the motions once a week... And don't get injured - What happens if he stops caring (As employees do since the dawn of time) Shouldn't the employer have some recoil?

Well presumably a club can go through the normal process of having someone dismissed for poor performance: verbal and written warnings, KPIs etc (all carefully documented and monitored by lawyers). The problem is that it's very difficult to demonstrate underperformance in an elite sporting context.

To use your example, there is objectively a way a brand new Ferrari ought to run, and if it's not doing that the owner should be able to get it fixed or replaced. If a sportsman is vaguely not as good as his employer hoped he'd be it's very, very tough to demonstrate that it's because he's being negligent rather than because he's getting older or just, maybe, wasn't as good as his employer hoped in the first place.

Fundamentally the issue with DCE is the same as it is with Farah: clubs ought to be bloody careful giving our rich, long-term deals which will take players beyond their prime. They backfire more often than not even when the player is giving their all, because players get old really quickly. And they're almost impossible to get out of.

 

[Blackpearl]

Is the NRL going to review player contracts, tpa's etc to actually get to the often spruked 'level playing field' for teams in the nrl ? To me, the whole system at the moment is broken and needs a fair dinkum review.

Not sure if this has been raised previously but clubs that DO generate juniors and spend money on their asset should have some sort recompence for the development of local young talent. Possibly a transfer system too, similar to perhaps the EPL, whereby clubs recieve a transfer fee for a player that is not a free agent. This would assist clubs like the tigers who operate at lower salary cap and enable them to compete with other, richer clubs that offer can offer bigger money contracts (including TPA's).

 

[sunshine_coast_tiger]

Is the NRL going to review player contracts, tpa's etc to actually get to the often spruked 'level playing field' for teams in the nrl ? To me, the whole system at the moment is broken and needs a fair dinkum review.

Not sure if this has been raised previously but clubs that DO generate juniors and spend money on their asset should have some sort recompence for the development of local young talent. Possibly a transfer system too, similar to perhaps the EPL, whereby clubs recieve a transfer fee for a player that is not a free agent. This would assist clubs like the tigers who operate at lower salary cap and enable them to compete with other, richer clubs that offer can offer bigger money contracts (including TPA's).

Great post. The NRL is at a crossroads in their running of the game. The can let the use of TPA's to continue to be unchecked and end up with a competition like most soccer leagues around the world were only 2-4 teams can realistically win. This will happen in the NRL unless they seek to control the use of TPA's or bring in a points based system, where they assign points to each player based on their ability and the total 25 man squad for a club has to be under a certain points level.

People will argue that the competition is even and their have been multiple different winners over the last 10 years, that is true but the next 10 years is were we will see the difference between the clubs that have vast resources and those who don't.

NFL have a hard salary cap and enforce it strictly. They want every team to have good and bad periods. For example the two Super Bowl teams from 2013 Baltimore and San Francisco are having very average years this year. Since when they were at the top the salary cap made their star players in the main too expensive to keep and the talent gets spread out around the rest of the NFL. Seems to work as they are by far the biggest sport in the USA.