How Third Party Agreements work - a business insight.

[Mr Invisible]

There seems to be much confusion here surrounding TPAs, comments re TPAs, etc etc.

This is how it was explained to me by a former first grade player not too long ago.

TPAs are not always sponsors/endorsements by a player.

Many are saying "Oh but if this person or this person organised them, that's a salary cap breach, it doesn't work like that".

For want of a better explanation, lets set some examples:

Phil Smith - Chairman of Football Club Board and owner of PhilsPhantasticPhinancials (Financial and Tax).
Dante Thompson - Director of board and owner of Funk-shones (Corporate Event / Function Centre).
Willy Williams - Director of board and owner of Hozpis (Hospitality fitouts and suppliers).
John Summers - Director of board and owner of FidnessFr33k (Corporate Health Solutions).

So we have 4 directors/businesses.

1. Phil (from PhilsPhantasticPhinancials) speaks with two of his customers (BlockedTheShitter Plumbing Pty Ltd and MillunzOfDolarz Pty Ltd).
He suggests that the owner of BlockedTheShitter Plumbing can drop himself to a lower tax bracket if he spends another $25,000 a year. Phil suggests sponsoring a player for $30k a season, and that would drop the payable tax. BlockedTheShitter and 3 other friends with companies sponsor jersey #1 on a $100k TPA.
He talks to the CFO of MillunzOfDolarz, and suggests they can do the companies financials for a reduced fee, in exchange for MillunzofDolarz support. MillunzOfDolarz sponsor jersey #2 on a $150k TPA.

2. Dante from Funk-shones speaks to 5 of his largest clients, and suggests he can do them 20% off all their functions, and families functions, and throw in free drinks, if they all agree to sponsor players.
Dantes's 5 clients all sponsor a player for $100k each, sponsoring jerseys #3 to #7.

3. Willy from Hozpis Hospitality speaks with 4 hotel owners who are keen to do several million dollar refits to their eateries and facilities. Willy offers to throw in upgrades to all stainless steel appliances, and full servicing for 5 years, as well as dropping 5% off his prices, in exchange for player TPAs.
The 4 hotels agree and each sponsor a player for $250k each sponsoring jerseys #8 to #11.

4. John from FidnessFre33k speaks to 2 larger businesses and puts forth a proposal. If both sponsor a player, he will offer fitness sessions to their businesses for 5 days a week, for the cost of 2.
Both businesses sponsor players for $120k each, sponsoring jerseys #12 and #13.

So now the club has the following:
#1 - contracted for $300k / TPA for $100k = total contract $400k
#2 - contracted for $200k / TPA for $150k = total contract $350k
#3 - contracted for $200k / TPA for $100k = total contract $300k
#4 - contracted for $200k / TPA for $100k = total contract $300k
#5 - contracted for $200k / TPA for $100k = total contract $300k
#6 - contracted for $300k / TPA for $100k = total contract $400k
#7 - contracted for $300k / TPA for $100k = total contract $400k
#8 - contracted for $400k / TPA for $250k = total contract $650k
#9 - contracted for $300k / TPA for $250k = total contract $550k
#10 - contracted for $300k / TPA for $250k = total contract $550k
#11 - contracted for $300k / TPA for $250k = total contract $550k
#12 - contracted for $380k / TPA for $120k = total contract $500k
#13 - contracted for $380k / TPA for $120k = total contract $500k

The following year the board gets replaced and new board members come in, in addition contracted players have changes in their contracts as some were frontended.

Dante's clients all pull out of their TPAs, as does Willy's. This results in
#1 - contracted for $200k / TPA for $100k = total contract $300k
#2 - contracted for $200k / TPA for $150k = total contract $350k
#3 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#4 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#5 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#6 - contracted for $200k / TPA for $0k = total contract $200k (total loss $200k)
#7 - contracted for $200k / TPA for $0k = total contract $200k (total loss $200k)
#8 - contracted for $150k / TPA for $0k = total contract $150k (total loss $500k)
#9 - contracted for $200k / TPA for $0k = total contract $200k (total loss $350k)
#10 - contracted for $300k / TPA for $0k = total contract $300k (total loss $250k)
#11 - contracted for $200k / TPA for $0k = total contract $300k (total loss $350k)
#12 - contracted for $380k / TPA for $120k = total contract $500k
#13 - contracted for $380k / TPA for $120k = total contract $500k

So as a result of a few companies/people pulling TPAs, players incomes can get absolutely smashed to pieces.

Now.. think about it.. if you are player #8 would you really want to put in given your incomes dropped from $650k to $150k, when it was expected to drop from $650k to $400k?

 

[_G-Dog_]

Theres heaps of 100Ks salaries there.. most of our players arent worth a dime this year

 

[Shire Dog]

Really didn’t comprehend any of that,
I’m just a blue collar worker from the shire

 

[Reesy]

Why would player 8s contracted salary go from $400k to $150k?

 

[Dogzzz of War]

There is no way in the world the value of TPAs are close to the value of players total salary (unless they are marquee players in one team cities).

 

[Hacky McAxe]

Here's how TPAs work:

- TPAs are unlimited. A player can earn $100 million if a sponsor is willing to pay it

- TPAs cannot be negotiated by anyone at the club or guaranteed by anyone at the club. That includes any negotiation including influence. That means if a board member convinces a business owner to sponsor players even if the board member doesn't specify players then that is an immediate breach of the salary cap. This is one of the things Melbourne lost points for. The CEO encouraged a car company to sponsor some players which is a big no no

- shit happens under the table and off the record. Everyone knows it happens. While a club member can't negotiate the deals in any way, if the club member has dinner with the sponsor and buys the sponsors products then the sponsor commits to some players, there's plausible deniability there and the NRL can't prove anything

- sponsors support players at clubs because they like that club. Some sponsor the player because they like the player but for the most part they do it because they like the club. When something changes at the club they don't like then they would likely pull out support for the individual player. This isn't illegal. Sponsors can do whatever they want

 

[Mr Invisible]

Keep in mind there are 3 different TPAs:
- Illicit TPAs - where the NRL are not informed/not registered with TPAs. NRL has admitted they cannot police these easily.
- ALAs (Arms Length Agreements) - private deals between players and sponsors (this is where most business deal TPAs are done).
- TPAs - Registered with NRL (includes sponsors/endorsements)

https://www.nrl.com/news/2018/02/19...to-publish-figures-on-third-party-agreements/

 

[Shnissss]

Well articulated. The part where the roosters nail everyone else is the fact that a) uncle nick owns half of Sydney. Car dealerships, businesses, property etc and b) the rest of the board is about the same. This opens up significant opportunity to top up any and every player they want with third party arrangements and that’s without a game of golf or a brown paper bag. Cap management at its best.

 

[Alan79]

Is this a veiled accusation that the new board has cost some of the players sponsorship deals MR I? Because I would have assumed that if a sponsor signed a two year sponsorship deal, they would be liable to pay that unless bankruptcy from the sponsor or a behavioral indiscretion happened from the player.

 

[Trafford10]

What about that case at Manly.
Wealthy older lady had a number of TPAs in place over the years but didn't have a trading business as such.
Is that type if thing allowed?

 

[SweetFA]

Well articulated. The part where the roosters nail everyone else is the fact that a) uncle nick owns half of Sydney. Car dealerships, businesses, property etc and b) the rest of the board is about the same. This opens up significant opportunity to top up any and every player they want with third party arrangements and that’s without a game of golf or a brown paper bag. Cap management at its best.

We were there abouts with the former Football Club Board, let’s see this crew’s corporate connections, like it or not it’s a major factor when you’re trying to attract players & their managers.

 

[SweetFA]

Is this a veiled accusation that the new board has cost some of the players sponsorship deals MR I? Because I would have assumed that if a sponsor signed a two year sponsorship deal, they would be liable to pay that unless bankruptcy from the sponsor or a behavioral indiscretion happened from the player.

It’s a fact of life, all agreements are conditional- sponsors dictate terms & normally commit based on personal relationships if things change then agreement/sponsorship can be pulled.
I don’t want to harp on this point but ousting the old Football Club Board has jeopardised our corporate contacts & relationships.

 

[Mr Invisible]

What about that case at Manly.
Wealthy older lady had a number of TPAs in place over the years but didn't have a trading business as such.
Is that type if thing allowed?

Yep ... personal donation/sponsorship.

 

[Dogtime]

There seems to be much confusion here surrounding TPAs, comments re TPAs, etc etc.

This is how it was explained to me by a former first grade player not too long ago.

TPAs are not always sponsors/endorsements by a player.

Many are saying "Oh but if this person or this person organised them, that's a salary cap breach, it doesn't work like that".

For want of a better explanation, lets set some examples:

Phil Smith - Chairman of Football Club Board and owner of PhilsPhantasticPhinancials (Financial and Tax).
Dante Thompson - Director of board and owner of Funk-shones (Corporate Event / Function Centre).
Willy Williams - Director of board and owner of Hozpis (Hospitality fitouts and suppliers).
John Summers - Director of board and owner of FidnessFr33k (Corporate Health Solutions).

So we have 4 directors/businesses.

1. Phil (from PhilsPhantasticPhinancials) speaks with two of his customers (BlockedTheShitter Plumbing Pty Ltd and MillunzOfDolarz Pty Ltd).
He suggests that the owner of BlockedTheShitter Plumbing can drop himself to a lower tax bracket if he spends another $25,000 a year. Phil suggests sponsoring a player for $30k a season, and that would drop the payable tax. BlockedTheShitter and 3 other friends with companies sponsor jersey #1 on a $100k TPA.
He talks to the CFO of MillunzOfDolarz, and suggests they can do the companies financials for a reduced fee, in exchange for MillunzofDolarz support. MillunzOfDolarz sponsor jersey #2 on a $150k TPA.

2. Dante from Funk-shones speaks to 5 of his largest clients, and suggests he can do them 20% off all their functions, and families functions, and throw in free drinks, if they all agree to sponsor players.
Dantes's 5 clients all sponsor a player for $100k each, sponsoring jerseys #3 to #7.

3. Willy from Hozpis Hospitality speaks with 4 hotel owners who are keen to do several million dollar refits to their eateries and facilities. Willy offers to throw in upgrades to all stainless steel appliances, and full servicing for 5 years, as well as dropping 5% off his prices, in exchange for player TPAs.
The 4 hotels agree and each sponsor a player for $250k each sponsoring jerseys #8 to #11.

4. John from FidnessFre33k speaks to 2 larger businesses and puts forth a proposal. If both sponsor a player, he will offer fitness sessions to their businesses for 5 days a week, for the cost of 2.
Both businesses sponsor players for $120k each, sponsoring jerseys #12 and #13.

So now the club has the following:
#1 - contracted for $300k / TPA for $100k = total contract $400k
#2 - contracted for $200k / TPA for $150k = total contract $350k
#3 - contracted for $200k / TPA for $100k = total contract $300k
#4 - contracted for $200k / TPA for $100k = total contract $300k
#5 - contracted for $200k / TPA for $100k = total contract $300k
#6 - contracted for $300k / TPA for $100k = total contract $400k
#7 - contracted for $300k / TPA for $100k = total contract $400k
#8 - contracted for $400k / TPA for $250k = total contract $650k
#9 - contracted for $300k / TPA for $250k = total contract $550k
#10 - contracted for $300k / TPA for $250k = total contract $550k
#11 - contracted for $300k / TPA for $250k = total contract $550k
#12 - contracted for $380k / TPA for $120k = total contract $500k
#13 - contracted for $380k / TPA for $120k = total contract $500k

The following year the board gets replaced and new board members come in, in addition contracted players have changes in their contracts as some were frontended.

Dante's clients all pull out of their TPAs, as does Willy's. This results in
#1 - contracted for $200k / TPA for $100k = total contract $300k
#2 - contracted for $200k / TPA for $150k = total contract $350k
#3 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#4 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#5 - contracted for $100k / TPA for $0k = total contract $100k (total loss $200k)
#6 - contracted for $200k / TPA for $0k = total contract $200k (total loss $200k)
#7 - contracted for $200k / TPA for $0k = total contract $200k (total loss $200k)
#8 - contracted for $150k / TPA for $0k = total contract $150k (total loss $500k)
#9 - contracted for $200k / TPA for $0k = total contract $200k (total loss $350k)
#10 - contracted for $300k / TPA for $0k = total contract $300k (total loss $250k)
#11 - contracted for $200k / TPA for $0k = total contract $300k (total loss $350k)
#12 - contracted for $380k / TPA for $120k = total contract $500k
#13 - contracted for $380k / TPA for $120k = total contract $500k

So as a result of a few companies/people pulling TPAs, players incomes can get absolutely smashed to pieces.

Now.. think about it.. if you are player #8 would you really want to put in given your incomes dropped from $650k to $150k, when it was expected to drop from $650k to $400k?

Utterly and completely wrong. The NRL salary cap auditor would have a picnic combing over your books. Nothing needs to be this complicated but the key is that the third party deals are from organisations unrelated to the club, nor can they be business clients of board members of the club. Nor can the club guarantee the 3rd parties though you wouldnt think Godfather NP would let any of the Rorters 3rd parties fall over.

 

[Mr Invisible]

Utterly and completely wrong. The NRL salary cap auditor would have a picnic combing over your books. Nothing needs to be this complicated but the key is that the third party deals are from organisations unrelated to the club, nor can they be business clients of board members of the club. Nor can the club guarantee the 3rd parties though you wouldnt think Godfather NP would let any of the Rorters 3rd parties fall over.

Ahhh but how does one prove that a company is/is NOT a business client of a board member of the club? The NRL cannot demand access to board members business client databases, so it's shrouded in mystery.

Likewise there is nothing stopping the club (or a board members business) employing the partner of a player for an exhorbinant sum. I reckon you'd find a LOT of $100k - $300k cleaners employed by some clubs board members companies.

It's all about the illusion of "an arms length".

 

[coach]

Ahhh but how does one prove that a company is/is NOT a business client of a board member of the club? The NRL cannot demand access to board members business client databases, so it's shrouded in mystery.

Likewise there is nothing stopping the club (or a board members business) employing the partner of a player for an exhorbinant sum. I reckon you'd find a LOT of $100k - $300k cleaners employed by some clubs board members companies.

It's all about the illusion of "an arms length".

Yup, grey area is putting it lightly
The nrl salary cap and 3rd party deals are as policed as politicians
Corrupt
I think you said yourself mr I, val homes missus has been offered a media gig with the sharks......
Bit of a joke but like you said nothing can be done to stop it

 

[Craystar]

Willy Williams, what a fucken cracker of a name

 

[habs]

Move to rl gen pls

 

[Trafford10]

There is no way in the world the value of TPAs are close to the value of players total salary (unless they are marquee players in one team cities).

I remember when Fifita signed and then didn't or the club pulled the plug one of his gripes was that almost 50% of the total offer was made up from TPAs.

 

[Mr Invisible]

Yup, grey area is putting it lightly
The nrl salary cap and 3rd party deals are as policed as politicians
Corrupt
I think you said yourself mr I, val homes missus has been offered a media gig with the sharks......
Bit of a joke but like you said nothing can be done to stop it

@coach here's the article:

https://www.dailytelegraph.com.au/s...h/news-story/be1ecd5e28d1d196337731adc248e133

JOBS FOR THE GIRLS

CRONULLA are denying their move to employ Val Holmes’ girlfriend as a marketing assistant is a sneaky tactic to keep the fullback in the Shire.

Natalia O’Toole started part-time work at the club last week while she is doing a marketing degree. It’s no secret Holmes’ long-time girlfriend is keen to return to Townsville, a situation the Cowboys are monitoring very closely. Sharks chief executive Barry Russell denies it was a move to keep the couple happy in the Shire. “That’s an insult to Natalia,” Russell said. “She’s doing a marketing degree and it’s a bona fide job.

“We needed extra staff and help coming up to the finals. She’s smart and she fits in really well. She’s on the award wage like everyone else. It’s part-time work for a couple of days a week.”

O’Toole’s sister, Brianna, is married to Cowboys superstar Michael Morgan. Holmes is under contract until the end of next season but has been offered a four-year extension by coach Shane Flanagan.