Hoffman to Warriors

[jaseg]

I have always had a different (and barely related) question about the cap specifically pertaining to the Warriors, so I guess I throw it in here to see what people think.

Given that the Warriors are based in a different country with a different currency and taxation system to the rest of the NRL, there does seem to be some issues around the cap. Would love to see a playing contract or just an explanation of how things are done, but I'll take a well reasoned opinion and/or sounding board if the first two aren't happening!

Obviously the cap is calculated in AUD. Anything else would be stupid.

Issue 1) Currency differences. Now the NZD and AUD are never likely to get too far out of sync in terms of covariance, so it's not likely to be a huge issue - unless we happen to be cutting it close one year. But if the relative values of the dollars change to an extent where the value of contracts being paid in AUD (what the cap must be calculated in) exceeds the cap level, what happens then? Clearly not the club's fault. This effect could be exacerbated by long contracts - a contract signed for a certain amount in NZD 3 years ago could be looking at a significant difference in the AUD cap value calculated back when it was signed to present day. The solution I've guessed at is to fix the cap value of the contract to whatever the exchange rate was on a particular date/time (likely the date the contract was signed).

Issue 2) Income tax differences. NZ has a significantly smaller top tax bracket rate than Australia. With the amounts of money we're talking about, the difference becomes quite huge, and this would become a significant competitive advantage for the Warriors. I'm guessing the solution is to calculate the cap amounts using after tax figures, but all I've seen on cap figures suggests that this isn't the case. This would mean the Warriors need to adjust what all applicable (most/all of the top 25) contracts are actually worth under the cap by applying them to the Australian tax system to get the 'cap figure' of each contract. Confusing and probably the hard way to do things.

Both issues seem to be made even more cloudy by the existence of TPA's.

Anyone have any different thoughts / possible solutions? Or anyone actually know any better? Because I'd love clarification (I work in financial law and actually enjoy it - weird I know, but this is the kind of crap I like to think about).

 

[jaseg]

Also RE TPAs (and perhaps moreso the centrally contracted crap the NRL have announced now), I really don't like some of the implications of these... allowances.

If you're desperate to keep the top names in the game, introduce a marquee player allowance. Multiple leagues in multiple sports across multiple countries have shown that this system can work effectively at retaining talent (where no other outside factors are influencing things) and certainly in recruiting talent from outside the league. You could always have 2 marquee spots - one based on recruiting someone from outside the NRL (or League in general) and a second which can be used on anyone (for retaining a top marquee player within your club or the NRL).

Another option (probably a little more controversial) could be an NBA-style soft cap. The basic idea I have of this system if that there is a certain specific cap figure, however any team is allowed to exceed this cap by however much they like. For each season the full figures against the cap are evaluated, and each team that is over pays a fee per dollar they are over the cap figure. The total of all of these fees then get evenly distributed among the clubs who were under the cap for that season. This system allows for clubs (and the league in general) to retain and attract as much top talent as possible while having significant incentives to control spending, and also to a degree evens out some of the financial gaps between clubs.

If you felt that the incentives to stay under the cap were too strong to get enough teams spending on attracting/retaining the best talent you could combine this soft cap system with the marquee player idea above, or simply adjust the incentive fee structure until you get the balance right. A sticks and carrots approach to funding from the NRL may help to promote healthy finances at each club as a further control against the potential for spiraling financial issues / ruin at any particular club.

 

[sup42]

I have always had a different (and barely related) question about the cap specifically pertaining to the Warriors, so I guess I throw it in here to see what people think.

Given that the Warriors are based in a different country with a different currency and taxation system to the rest of the NRL, there does seem to be some issues around the cap. Would love to see a playing contract or just an explanation of how things are done, but I'll take a well reasoned opinion and/or sounding board if the first two aren't happening!

Obviously the cap is calculated in AUD. Anything else would be stupid.

Issue 1) Currency differences. Now the NZD and AUD are never likely to get too far out of sync in terms of covariance, so it's not likely to be a huge issue - unless we happen to be cutting it close one year. But if the relative values of the dollars change to an extent where the value of contracts being paid in AUD (what the cap must be calculated in) exceeds the cap level, what happens then? Clearly not the club's fault. This effect could be exacerbated by long contracts - a contract signed for a certain amount in NZD 3 years ago could be looking at a significant difference in the AUD cap value calculated back when it was signed to present day. The solution I've guessed at is to fix the cap value of the contract to whatever the exchange rate was on a particular date/time (likely the date the contract was signed).

Issue 2) Income tax differences. NZ has a significantly smaller top tax bracket rate than Australia. With the amounts of money we're talking about, the difference becomes quite huge, and this would become a significant competitive advantage for the Warriors. I'm guessing the solution is to calculate the cap amounts using after tax figures, but all I've seen on cap figures suggests that this isn't the case. This would mean the Warriors need to adjust what all applicable (most/all of the top 25) contracts are actually worth under the cap by applying them to the Australian tax system to get the 'cap figure' of each contract. Confusing and probably the hard way to do things.

Both issues seem to be made even more cloudy by the existence of TPA's.

Anyone have any different thoughts / possible solutions? Or anyone actually know any better? Because I'd love clarification (I work in financial law and actually enjoy it - weird I know, but this is the kind of crap I like to think about).

This area is not my special interest area ( neither are TPA's actually, or the Cap in general , I just like to understand what it means for our recruitment options ).

1) Yes All Warriors players Salaries are paid in the equivalent of AUD.

2) You are correct re Salaries are measured before tax under the cap.

3) Correct our Tax rates are lower at that income level.

4) The attraction of Tax advantages are offset by relocation :
-relative costs of living
-Arguably quality of Life style ( the only Franchise in the NRL where Australian imports have to adapt to different Culture , Laws etc ).

-Travel costs , more importantly access to family / Friends ( even taking into account cap exempt travel , an Australian Warrior will spend more of their own money in travel for family reasons )

5 ) Fluctuations in exchange rates don't place players contracts at risk of being over the cap in NZ because Cap is calculated before before tax.

You have to remember things like the differences between what your tax dollar in Australia gives you in public amenities and services relative to a smaller economy of scale like NZ (quality of public health care , education, transport infrastructure, poor transport systems is a huge issue in NZ ).

 

[SpaceMonkey]

4) The attraction of Tax advantages are offset by relocation :
-relative costs of living
-Arguably quality of Life style ( the only Franchise in the NRL where Australian imports have to adapt to different Culture , Laws etc ).

Pretty trivial IMO- legal differences between NZ and Aus aren't really all that big for most people. culture wise there are differnces, but not really due to it being a different country- it's the same if they go to Townsville, Canberra etc.

-Travel costs , more importantly access to family / Friends ( even taking into account cap exempt travel , an Australian Warrior will spend more of their own money in travel for family reasons )

Definitely one of the bigger considerations. Not just the cost, but the time/hassle of going through international customs and changing time zones every time they go home.

You have to remember things like the differences between what your tax dollar in Australia gives you in public amenities and services relative to a smaller economy of scale like NZ (quality of public health care , education, transport infrastructure, poor transport systems is a huge issue in NZ ).

I think you overstate that. Public healthcare, Education and road infrastructure in Auckland is as good as Sydney. Public transport isn't as good, but not terrible, and unlikely to be a huge consideration.

 

[sup42]

Pretty trivial IMO- legal differences between NZ and Aus aren't really all that big for most people. culture wise there are differnces, but not really due to it being a different country- it's the same if they go to Townsville, Canberra etc.

Definitely one of the bigger considerations. Not just the cost, but the time/hassle of going through international customs and changing time zones every time they go home.

I think you overstate that. Public healthcare, Education and road infrastructure in Auckland is as good as Sydney. Public transport isn't as good, but not terrible, and unlikely to be a huge consideration.

Yes Criminal law is barely worth a mention. I forgot to stipulate there ( badly written I was thinking about money ) Bureaucracy is what I should have said, It's a learning curve. Examples are things like : Players come under ACC here ( ergo Sam Louisi had to wait several months of delays for ACC funding approval before the last op , it's a cumbersome system for a country with private health care insurance...the other thing is wait times for specialists ).


Auckland especially with things like property bi-laws can be complex if you're buying property here without good advisers there are pitfalls ( again you face that where ever you go ) but it's an added stress when your usual supports are in Australia and you're entirely reliant on people you are just getting to know.

One import who came here that I know of was caught out by the leaking building syndrome when that player hadn't been warned it was known by Aucklanders , to avoid property between the affected year ranges.

Culture differences mainly in the broadest sense of ' Culture shock '.....the little things.....NZ T.V is the pits for example.....everyone knowing you are a ' foreigner ' every time you open your mouth to speak. Being asked what you think of Rugby Union every time you're doing a Radio Interview (Jk) none of them big stressors in of themselves but they contribute to home sickness often it's the little things that affect people.

Don't forget Polynesian Culture dominates the new recruits work place more than any other NRL club ( a good learning experience and enriching , but different none the less ).

As for comparing infrastructure and all of that lot , I guess it's quite comparable to Sydney , and overstated....but for example if you want to go on holiday and tour NZ a bit while you're here.....Flying to the South Island is more expensive than Flying internally in Australia.

Having said all of that , any Kiwi can tell you this is the most beautiful country in the world to live in. With a comfortable income , it's a very easy life.

 

[sup42]

Plenty of speculation after the announcement that ASADA is issuing please explain letters to the affected players in the investigation....that Jason Bukuya is one of the likely recipients.

In the event that Bukuya is suspended for two years, a number of the Warrior faithful see Ryan Hoffmans signing....and Mateo's retention......as an kind of insurance measure.

We'll have to wait and see. But if so it reinforces why Hoffman / Teo / Proctor were high value targets.

 

[vvvrulz]

Who decides what they're worth?

Bengal does.

 

[sup42]

Bengal does.

:lol:

 

[JoeD]

Fluctuations in exchange rates don't place players contracts at risk of being over the cap in NZ because Cap is calculated before before tax

.*

Good discussion guys, however above statement doesn't make sense to me.

If cap (and therefore player payments) is calculated in Aus $ then actual money received by warriors players would fluctuate with exchange rate.

 

[Rich102]

Depends if the club takes forward exchange cover for the season.

 

[sup42]

.*

Good discussion guys, however above statement doesn't make sense to me.

If cap (and therefore player payments) is calculated in Aus $ then actual money received by warriors players would fluctuate with exchange rate.

ah yeah that's confusing. I see your point.

The amount in Aus dollars does not change from what's registered with the NRL....what I'm reading ( correct me if I'm wrong ) is that yes the value of those Australian dollars in terms of buying power between NZ and Aus will fluctuate.

I was trying to clarify the tax question, tax rates for players here are independent of the Australian rate by virtue of registered payment being made simple as a Gross Salary with no relevance to the Australian tax rate.

The original poster was asking if it was possible to go over the cap with fluctuation in dollar comparisons . The simple answer is no.

 

[Bengal]

Who decides what they're worth?

The staff making the decisions decide and we here agree or disagree with them

Bengal does.

Learn to read rulz!

In the event that Bukuya is suspended for two years, a number of the Warrior faithful see Ryan Hoffmans signing....and Mateo's retention......as an kind of insurance measure.

We'll have to wait and see. But if so it reinforces why Hoffman / Teo / Proctor were high value targets.

"High value" is misspeak for overpriced!

 

[sup42]

"High value" is misspeak for overpriced!

Market Value and 'over pricing is relative to other factors like not being able to buy the same assets as 15 other business competitors , as such ' over pricing ' loses it's relevance. You're ignoring the Warriors profitable model as well.

Really it's not hard to understand supply and demand. Warriors fans understand that principle better than fans from any other outfit.

Here's some fairly concrete examples for you :

Greg Alexander
Steve Price
Brett Tate

Three marquee Australian signings in two decades.

How many Marquee signings from other clubs has your club made over a comparable time frame ?

You're trying to sell Ice to Eskimo's.

 

[Bengal]

Market Value and 'over pricing is relative to other factors like not being able to buy the same assets as 15 other business competitors , as such ' over pricing ' loses it's relevance. You're ignoring the Warriors profitable model as well.

Really it's not hard to understand supply and demand. Warriors fans understand that principle better than fans from any other outfit.

Here's some fairly concrete examples for you :

Greg Alexander
Steve Price
Brett Tate

Three marquee Australian signings in two decades.

How many Marquee signings from other clubs has your club made over a comparable time frame ?

You're trying to sell Ice to Eskimo's.

I'm a League man - I want the best for the game. The Warriors are NZ's shop-front window and they have done a miserable job at representing this country since its inception. History is on my side and I have not seen anything that tells me that on-field results are going to change any time soon!

Recruiting the wrong players, paying too much for them is part n parcel of Warrior history. To their credit, they've made many good recruitments as well, Maloney and Friend in recent times, but there's no denying that the negative side of the recruitment ledger is far greater than it should be.

My point here is to get people to question decisions, to get people to actually think about a lot of the choices this team makes because the history of this team requires that we do so.

But instead, what I'm seeing here on this board alone, is a lot of people either dodging or oblivious to the on-going issues that consistently hamper this club from reaching its true potential. Now the latter I can understand because not everyone had 30+ years of League, business, people experience behind their belt but the former - dodging issues - that is criminal, especially, again, for a club that has the poor history that it has.

At the moment I am not seeing anything from you other than attempts to dodge the hard questions. The more you do this the more I know that this team is going nowhere. Once again, one of the great things about League is that it mirrors life all too well and in this instance, it is like politics - I am here questioning the politicians but all I'm getting is "pr" speak in return.

 

[Rich102]

I'm a League man - I want the best for the game. The Warriors are NZ's shop-front window and they have done a miserable job at representing this country since its inception. History is on my side and I have not seen anything that tells me that on-field results are going to change any time soon!

Recruiting the wrong players, paying too much for them is part n parcel of Warrior history. To their credit, they've made many good recruitments as well, Maloney and Friend in recent times, but there's no denying that the negative side of the recruitment ledger is far greater than it should be.

My point here is to get people to question decisions, to get people to actually think about a lot of the choices this team makes because the history of this team requires that we do so.

But instead, what I'm seeing here on this board alone, is a lot of people either dodging or oblivious to the on-going issues that consistently hamper this club from reaching its true potential. Now the latter I can understand because not everyone had 30+ years of League, business, people experience behind their belt but the former - dodging issues - that is criminal, especially, again, for a club that has the poor history that it has.

At the moment I am not seeing anything from you other than attempts to dodge the hard questions. The more you do this the more I know that this team is going nowhere. Once again, one of the great things about League is that it mirrors life all too well and in this instance, it is like politics - I am here questioning the politicians but all I'm getting is "pr" speak in return.

I think you are speaking to the wrong people.
We are Warrior supporters not management. We don't make decisions, neither do the club listen to us.

 

[vvvrulz]

Learn to read rulz!

It was a joke son, kinda like this thread now.

 

[Bengal]

I think you are speaking to the wrong people.
We are Warrior supporters not management. We don't make decisions, neither do the club listen to us.

I am speaking to the right people about what I believe to be the real issue here - the club's decisions makers. History shows us all that management have consistently failed us.

In this information age, what we say matters especially if its a collective rather than divided voice!

It was a joke son, kinda like this thread now.

My brother died last week, he had 40 years involvement in League. He was buried largely in club Rugby League colours, not unlike our mother who had a similar involvement level in this game. The turnout included a significant proportion of League folk. The only joke here is the Warriors League record which is something I'm aching to see turn around. Likewise, I want to see this great game flourish but like the Warriors, League's administrators have consistently failed the game also. It should have been the biggest game in the Southern hemisphere (OZ/NZ that is) by a country mile by the turn of the century but it stumbles along thanks mainly to poor management but divided fan loyalty hasn't helped much either.

Rulz, you may want to leave the jokes for people who well and truly deserve it in the future because simply having a differing point of view does not equal idiocy especially since most of us here want the best for this team and the game in general.

 

[vvvrulz]

My brother died last week, he had 40 years involvement in League. He was buried largely in club Rugby League colours, not unlike our mother who had a similar involvement level in this game. The turnout included a significant proportion of League folk. The only joke here is the Warriors League record which is something I'm aching to see turn around. Likewise, I want to see this great game flourish but like the Warriors, League's administrators have consistently failed the game also. It should have been the biggest game in the Southern hemisphere (OZ/NZ that is) by a country mile by the turn of the century but it stumbles along thanks mainly to poor management but divided fan loyalty hasn't helped much either.

Rulz, you may want to leave the jokes for people who well and truly deserve it in the future because simply having a differing point of view does not equal idiocy especially since most of us here want the best for this team and the game in general.

Hey look mate I truly apologise if I somehow made it personal.
I'm sorry to hear about your loss and I was never questioning your loyalty to the club or rugby league in general.

I wasn't bagging you because you had a different point of view, I just felt that some of your arguments were a little off beat and the thread has derailed a bit. I'm also a fan and also want the best for the Warriors.

This is just opinions and healthy discussion, it was never anything personal.
I made a few jokes but it was never with the intention to offend, it was only supposed to be a bit of silly banter.

I hope we can close this off sensibly on good terms.

 

[Penrose Warrior]

I think you are speaking to the wrong people.
We are Warrior supporters not management. We don't make decisions, neither do the club listen to us.

Yes they do. We appointed Bluey!

 

[Bengal]

I hope we can close this off sensibly on good terms.

Absolutely, because everyone here is here for one reason - we care. But back to the topic, I believe we paid too much for Hoffman and I also believe that this decision just highlights that this club's power brokers are still making too many poor decisions. That is my whole argument in a nutshell.

Cheers.