Parramatta has admitted that the “consistent mismanagement of the NRL and NYC playing squad” from its previous administration has led to the NRL handing them the heaviest salary cap penalty since Melbourne were stripped of its two premierships.
The Eels were hit with a preliminary breach notice of $525,000 on Thursday for overspending in all four of the game’s salary cap categories last year.
They will also be penalised four competition points at the start of next season – unless the club undertakes an independent review of its governance and organisational capability by February 29, 2016.
Parramatta said in a statement that “in 2013, the newly-elected board of the Parramatta Leagues Club initiated an extensive internal investigation, which by late 2013, had raised significant concerns regarding player contracts and squad management.”
CEO Scott Seward said the club had cooperated with the NRL during the audit process.
“We have been upfront with the NRL, in fact, we were the first to bring these issues to the NRL’s attention,” he said.
The situation as it stands is that with the hard work of our football department and the support of the board we are compliant with the salary cap for the 2015 season, and in good shape for the seasons to come.
The penalty is the second-biggest fine the NRL has handed out since its inception in 1998, however Smith was adamant the Eels hadn’t rorted the system.
“This is the fourth out of five years that we’ve seen salary cap breaches in that club,” Smith said.
“I don’t think this is about cheating. This is about mismanagement.
“A lot of the things across the game that we’ve tried to do is prevent these things happening in the future because they invariably take a number of years to fester and bubble.”
It is the first time all four tiers of the salary cap – the NRL, the NRL’s second tier, the National Youth Cup and the NYC second tier – have been breached.
The Eels overspent by over $400,000 in total, $244,036 of which was in the NRL’s second-tier cap.
“That’s why there’s a $525,000 fine, and that’s why there’s the potential loss of four competition points unless we fix this for the long-term going forward,” Smith said.
Smith expected the independent review would be a transparent process.
“We’ll make sure that we’re on top of who does that review,” he said.
“The club will run it and we’ll also make sure that we’re very clear on its terms of reference.”
He said that there are currently no concerns on the club’s prized signings of Kieran Foran and Beau Scott for next year.
Parramatta has seven days to respond to the breach notice.
NRL’s BIGGEST FINES FOR BREACH OF SALARY CAP
2002 – The NRL disqualify the Bulldogs from the 2002 final series, impose a $500,000 fine and a 37 premiership point penalty after detecting $1 million in salary cap breaches.
2006 – The Warriors are stripped of four competition points and fined $430,000 for breaching the salary cap by almost $1 million.
2010 – The Melbourne Storm are stripped of two premiership titles, three minor premierships, docked all points for 2010, fined $500,000 and ordered to return $1.1 million in prizemoney after over-spending the salary cap by $1.7 million over five years.
2014 – Gold Coast are hit with a $300,000 fine – $75,000 of which was suspended – over a salary cap breach involving former playmaker Scott Prince. A four-competition point penalty was also suspended.
2015 – The NRL impose a $525,000 fine on Parramatta for salary cap breaches. They will lose four competition points next season unless an independent review is undertaken into their management systems.