Parramatta NRL team once again mired in salary cap claims
Parramatta Leagues Club-owned apartments at 52 Ross St. Picture: John Feder
The Parramatta Eels are facing explosive new allegations of once more cheating the National Rugby League’s salary cap, just two years after the club received one of the heaviest punishments in Australian sports history over a massive salary cap fraud.
The Australian can exclusively reveal that a former Eels senior executive claiming to be a whistleblower, who left the club earlier this year, has made allegations directly to NRL leaders that the club has again evaded the cap by providing several free or heavily discounted rental properties in developments in the Parramatta area to Eels players.
The former executive also alleged the club remained in breach of the code’s salary cap to this day. The fresh allegations have already been made directly to Paul Toole, the NSW Gaming and Racing Minister.
Mr Toole confirmed to
The Australian last night that a comprehensive investigation had been launched, which would take in both the NRL Integrity Unit and NSW Police.
“The allegations are serious and will be comprehensively investigated, including liaison with relevant law enforcement and sports integrity bodies where appropriate,” Mr Toole said.
The whistleblower is understood to have alleged that in a number of cases, the players have simply been secretly charged rent significantly below market rates, and that the players’ electricity bills were also heavily subsidised by the Parramatta Leagues Club.
The former executive claims to have made a proposal within the club at one point that players be charged full market rent for the accommodation and the full cost of their electricity, but was allegedly rebuffed. It is an offence in NRL rules for related parties, such as a leagues club parent to an NRL club, to act effectively as a third party that provides undeclared benefits to players.
But Parramatta Leagues Club chairman Max Donnelly last night vehemently denied any allegations of wrongdoing. “The club categorically denies that there are any current salary cap issues regarding property and our players. The club has been open and transparent with the NRL, post the 2016 season,” he said.
There is no suggestion any of the players staying in the accommodation in recent years have done anything wrong.
The whistleblower also contacted bosses at the NSW clubs regulator, Liquor & Gaming NSW, which will conduct the investigation.
Mr Toole said last night: “Community confidence in the governance of large and complex registered clubs such as Parramatta Leagues Club as well as the integrity of its senior managers is vital for effective administration and industry sustainability.” The investigation was “clearly in the public interest”, he said.
It is understood most of the properties referred to by the whistleblower, an ex-Parramatta Leagues Club senior executive made redundant earlier this year, are leagues club-owned apartments contained in three developments close to the club’s headquarters.
Two of these developments situated within metres of the $60-million-a-year leagues club are well known inside the Eels as residential enclaves for NRL players.
The Australian understands these two developments have jointly been colourfully nicknamed “the Bronx” by club officials, for the high concentration of Eels players who have stayed there.
Present and past Eels NRL stars who have allegedly occupied leagues club-owned rental properties in the three developments at various points include Manu Ma’u, David Gower, Semi Radradra, Joseph Paulo and Kenny Edwards.
The Australian understands the whistleblower has alleged that, in total, 13 Parramatta Leagues Club-owned properties have been put aside specifically for players as accommodation at significantly below market rent.
Under NRL salary cap rules, any accommodation benefits provided to players for more than a month must be declared at actual market value.
It is an offence under NRL rules for clubs to bestow rental assistance if it is undeclared or, alternatively, if it is declared at below market rent. The one exception to this rule is the reimbursement of temporary accommodation costs, which are not included in the cap but must be approved.
Among players alleged to have stayed in the two developments known as “the Bronx” over the years are present and past Eels players including Gower, Paulo, Radradra and Edwards.
The third, more upmarket development with multiple units near the club is alleged to have played host to Eels stars including Ma’u, Darcy Lussick, Mitchell Allgood and now-retired Luke Kelly.
One line of investigation is arrangements where players have been provided with leagues club-owned accommodation for free, with the club declaring it to the NRL at a certain value that forms part of the club’s overall salary cap.
Authorities are believed to be investigating whether some of the properties made available to Eels players as part of their contracts may have been declared at far below market rent to the NRL.
If this allegation were proven, it would artificially reduce the club’s overall salary cap when it should be much higher.
The Australian has sighted documents from the Eels from recent years relating to the rental value placed on leagues club-owned accommodation provided for free to NRL players, as part of player contracts it has declared in the salary cap. These documents show some of the units in “the Bronx” and other prime Parramatta locations were being declared in the salary cap at the apparent bargain basement price of $100-$150 a week, or $5200-$7800 a year.
But when this journalist checked, two-bedroom properties in the same vicinity as “the Bronx” were being advertised for rent at three to four times this value, at $380-$450 a week, or $19,760-$23,400 a year. There is a concern that a much higher rental value for these properties should have been included in the salary cap.
Knowingly breaching the salary cap was a big factor in the sackings of the entire Parramatta board by the NSW government in 2016.
The former executive has also claimed the club’s alleged breaches go beyond salary cap rules and into registered club laws. This is because the complaint drags the cash-rich and heavily regulated Parramatta Leagues Club squarely into a mess that in 2016 was largely quarantined to the Eels NRL club, the loss-making subsidiary that it funds to the tune of millions of dollars every year.
Another potential issue lies in the fact the properties are owned by the leagues club, which under law owes duties to every one of its 40,000 members.
The whistleblower claims some of the NRL players were members of the leagues club, raising further questions over whether they were given preferential treatment over the 40,000 other members of the club by being given subsidised accommodation.
Under club laws, it is an offence for a registered club to give a benefit to any member that is not “offered equally” to all members.
This is said to be one of the NSW clubs regulator’s key lines of inquiry. If proven, it could amount to a misappropriation of Parramatta Leagues Club members’ funds, exposing the club to breaches of the NSW Registered Clubs Act, and potentially even national corporations law.
The allegations, if proven, could once more set the club back years. They raise questions about whether the club has fixed its corporate governance problems.
Recently, media commentators have expressed significant optimism about the club’s future, dubbing the Eels as potentially the “Brisbane Broncos of Sydney”.
The optimism is due to the opening next year of the NSW government-funded $300m Parramatta Stadium next door.
source:
https://www.theaustralian.com.au/ne...l/news-story/d88cb24c83bf9493d181393612acedab
