Onan the barbarian said:
Kennedy is gone next year, Menzes has a $100,000 discount for long service.
It is a lot for two players, but if they can win you matches why wouldn't you want them?
Look at Newcastle. They have the bulk of their cap behind a core group of three or four players. But watch how they perform when Johns or Buderus (one of those players) is out. They may have a very good side with those players in, but because of the insane amount of money they are paying for Johns in particular, they cannot afford to keep juniors. In general the good juniors get snapped up by other clubs because as soon as they show promise or progression they are worth more than what Newcastle can offer them. The end result is that Newcastle have very little quality depth. Sure, they have some good players running around in reggies, don't get me wrong. But a huge chunk of their juniors go elsewhere for an opportunity because Newcastle can't afford to keep them.
Basically, the fact that these guys (Lyon, Orford etc) take up near half of your cap means that while your full strength side will be a pretty good one, the junior development at your club will suffer (wait, junior development at Manly? My bad...) and when Orford or Lyon or Kite goes down, there will be no one decent to replace them. See Newcastle 2005 for reference.
By the way, this is in no way meant to offend or insult Newcastle fans, your club is just an example that I used....