First signs of cracks?

[NFN2IT]

We've all heard the rumours and stuff about the DCE v Stewart bros and to be honest i never really believed or thought too much into it.

Last night while i was watching NRL on Fox i heard Kent talking about the whole Gift situation talking about how the whole senior playing group have taken pay cuts over the years just to keep each other together and blah blah blah, he also talked about the first signs of 'cracks' within the playing group now that Gift has been forced out.
It got me thinking and wondering weather or not this actually may be the case, no doubt the senior playing group would be dirty that Gift has signed with Souths and i dont think they can justify being dirty at the club or Dave Perry for this as it wasnt that they didnt want to keep him they simply couldnt and i guess it may be the case they become dirty at other influences... possibly DCE.

Now you cant be dirty on DCE for trying to earn as much as he can while he can as you never know when the bubble may burst or **** happens (i.e Alex Mckinnon) but just remember we dont have a 'big 3' we have a big team and DCE success is just as much due to the 12 other blokes around him on the field as it is his skills and talent. I would hope moving forward Cherry would help instill the culture of taking paycuts and making sacrifices and all the rest of that stuff into youngsters of the future at the club. These 'cold as ice' comments make me feel a lil uncomfortable.

In saying that DCE still has a year or two left on his current deal and may not be in negotiations for a new deal yet so it might be a case of the club banking on having to upgrade his pay packet and wanting to keep some space in the cap for this before the time even comes so we can keep him. If thats the case well you cant really blame him can ya?

My point here is i hope there isnt 'first signs of cracks' between the senior playing group and DCE over this whole Gift situation because the bond these blokes share are a massive contribution and relfect the success of the club over the past decade.

Am i maybe thinking too much into this?!

 

[HappilyManly]

Yes

The DCE angle was a ploy to get Manly to come up with an acceptable offer for Gifty.

Whilst DCE, and others outside of the 2004 side, may not be mates, they do all play as a premiership winning Team

The reality is that there are more Players who came to Manly after 2004, than before. So the stalwarts had better get used to the new power base, namely our halves.

Cracks in the Team are the dream of the deathriders of Manly, and the twisted mind of The Drip :dodgy:

There are 15 Clubs and their Fans who think that Gifty leaving will stop the Manly domination of the NRL. Nothing has changed since 1972 as far as I have witnessed

 

[The Who]

The Telecrap are going to love you for giving them their next back page headline: Crackheads at Manly!

 

[bones]

The players haven't taken pay cuts to stay. They have deferred large portions of their salaries to the final year of their contracts. They still get their full salary, but it's just back ended. Rejecting a higher offer from another club isn't taking a pay cut.

 

[MadMarcus]

We should all show the DT our cracks.

 

[Eagles Nest 08]

The players haven't taken pay cuts to stay. They have deferred large portions of their salaries to the final year of their contracts. They still get their full salary, but it's just back ended. Rejecting a higher offer from another club isn't taking a pay cut.

Totally agree. Our senior players are being paid real well and none have taken a reduced amount when their next contracts were renewed or negotiated (from the expired deals).

Back ended deals was banking (or assuming) that the salary cap was going to go up for ’13 & ’14 seasons, when deals were negotiated back in the 2010 & 2011 seasons.

Example: If payer “A” took a while to agree and negotiated (say) $450,000 a season on a 4 year contract to start in 2011. That will be $1.8 million all up – hands are then shake and all agree on the deal.

Then agree the payment of each season and could structure something like this:

2011 Season - $300,000
2012 Season - $350,000
2013 Season - $450,000
2014 Season - $700,000

It works well to fit into the cap for the first 3 years, but puts huge pressure on the last year with the cap.

The player can prepare for the larger payment for the last year quite well, so if got a good manager can work out the best investment strategies or tax reduction investments when the large payment comes in that last year.

Agree that in the course of negotiation player “A” could have said Canberra offered $550,000 a season, so the their manager or the media picks up signed for less, but in reality the other offer may have been no so formal and leaving you would want more (just for the expenses if relocation was also involved).

No senior player has taken cuts to what their markets worth.
If we hear correctly the back ended deals for Glenn is north of $800,000 in 2014 and Watmough north of $900,000 (both deals may have averaged like $550k a year or say $600k as tops, but these were negotiated in 2010 when that money would be the highest paid players, no doubt).

No pay cuts in those deals.

 

[susan]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

 

[mickqld]

The players haven't taken pay cuts to stay. They have deferred large portions of their salaries to the final year of their contracts. They still get their full salary, but it's just back ended. Rejecting a higher offer from another club isn't taking a pay cut.

Example: If payer “A” took a while to agree and negotiated (say) $450,000 a season on a 4 year contract to start in 2011. That will be $1.8 million all up – hands are then shake and all agree on the deal.

Then agree the payment of each season and could structure something like this:

2011 Season - $300,000
2012 Season - $350,000
2013 Season - $450,000
2014 Season - $700,000

I don't see how this is possible if as we are led to believe that the NRL put a notional value on a player due to their rep career etc. If said player above was valued at $450000 per season then how can the hypocritical NRL allow him to be paid unders for yrs 1 and 2. If this is true then once again the NRL are shown to have N.F.I about how to run a fair and even competition.

 

[HappilyManly]

The NRL does need to sign off on the bec and have done so.

Their concern is the financial viability of their Franchisers and not an even spread of talent.

 

[Stevo]

It makes you wonder. From what we're told the G.Stewart contract saga went on for 7 months. Just over 7 months ago is when it was reported that there was a falling out between the Stewarts and DCE.

 

[Technical Coach]

Yeah my tax comments don't really apply to the top earning players as they are well over $180,000, it is more in the middle or just about to break big players that will jump brackets but most of these players I doubt could afford to back end needing the money up front.

Basically the only real beneficial ways of reducing tax legally is by setting up investments in the name of the person with the lower tax rate(marriages/partners etc) and divert the income to them.(from a players perspective)

I was more thinking there might be ways unknown to me where players may benefit or not benefit due to the arrangement of a back ended contract.

In the end if Manly really wanted to keep Glenn they would have, if this situation was 7yrs ago we would be rejoicing over a new contract extension.

Manly at present is being financially run better now than it has ever been combine that with the NRLs "paybacks a bitch methods" right now we can look forward to a long future.

 

[mosto]

Let me give you an insight into the intellect of Paul Kent (btw, the 'e' is pronounced as a 'u' in Kent). This morning on BSB, he said the criticism of referees had gotten way out of hand. His solution....ban coaches and players from making any comments at all on referee performances or individual decisions. Paul Kent is a journalist...these comments are answers to journalists questions. So, in effect, his solution is to ban players and coaches from answering his questions!!!

Bravo Paul, bravo!!!

 

[Captain Moondog]

This thread has Nathan Hindmarsh written all over it...

 

[Peter C]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

I imagine any player earning more than around $300,000 would probably have incorporated himself into a company, which has a tax rate of 30%.

 

[Technical Coach]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

I imagine any player earning more than around $300,000 would probably have incorporated himself into a company, which has a tax rate of 30%.

I was thinking this also but is it possible under a pay as you go structure.

 

[Peter C]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

I imagine any player earning more than around $300,000 would probably have incorporated himself into a company, which has a tax rate of 30%.

I was thinking this also but is it possible under a pay as you go structure.

I can't see why not, I don't think they get paid on a week to week basis, I don't know what happens with things like super if they are a company.

 

[BOZO]

First sign of cracks is when the lunatics say anything negative about the most successful club in the modern era The mighty Sea eagles

 

[mmmdl]

The players haven't taken pay cuts to stay. They have deferred large portions of their salaries to the final year of their contracts. They still get their full salary, but it's just back ended. Rejecting a higher offer from another club isn't taking a pay cut.

Example: If payer “A” took a while to agree and negotiated (say) $450,000 a season on a 4 year contract to start in 2011. That will be $1.8 million all up – hands are then shake and all agree on the deal.

Then agree the payment of each season and could structure something like this:

2011 Season - $300,000
2012 Season - $350,000
2013 Season - $450,000
2014 Season - $700,000

I don't see how this is possible if as we are led to believe that the NRL put a notional value on a player due to their rep career etc. If said player above was valued at $450000 per season then how can the hypocritical NRL allow him to be paid unders for yrs 1 and 2. If this is true then once again the NRL are shown to have N.F.I about how to run a fair and even competition.

This exact scanario happened with the T-Rex contract.

He had a 2 year deal - 1 year plus an option for year 2. As we all know he decided to leave year 2.

Manly had backended that particular deal, meaning he made a lot more in year 2.

When he left, Schubert decided that the amount we paid him in year 1 wasn't enough, so that's why we had to pay him 80k or so last year - which they attributed to our 2012 cap which is why it looks as though we were over the cap that year.

A nominal value is placed on a player, as long as that amount is reached over an average then it is fine. We can pay DCE minimum contracts for 2 years of a 3 year deal if we want and then pay him 2m in year 3. HOW we do it is up to the club, which is why all these back ended deals are in place now.

 

[Ralphie]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

Sports people are able to average their incomes for taxation purposes as per below:

Generally, average taxable professional income (ATPI) in an income year is one-quarter of the sum of your TPI for each of the preceding four years. Special rules apply for working out the ATPI if your first income averaging year was less than four years ago. So, in the first four years, ATPI is worked out as follows if you were an Australian resident during the year immediately before your year 1:
year 1 = nil
year 2 = one-third of TPl in year 1
year 3 = one-quarter of the sum of your TPI in years 1 and 2
year 4 = one-quarter of the sum of your TPl in years 1, 2 and 3.

 

[zanzin]

I keep hearing about the tax issues with back ended payments. It is not an issue.
First of all the players have their tax deducted on a pay as you go basis and not as independent contractors.
Secondly the top tax rates kick in way lower than what these blokes are earning. They lose the same amount in cents in the dollar terms at the top rate across all the years so it is irrelevant in a straight tax sense. The tax minimisation strategies(which are becoming scarcer by the minute) are all based around the player paying the top rate so makes no difference when they earn it as they are paying tax at the top rate way above the threshold each and every year. Would take a very significant deduction to get them into a lower bracket in any year.The days of movie making,ostrich farming and lumber investments are over!

I imagine any player earning more than around $300,000 would probably have incorporated himself into a company, which has a tax rate of 30%.

I was thinking this also but is it possible under a pay as you go structure.

I can't see why not, I don't think they get paid on a week to week basis, I don't know what happens with things like super if they are a company.

Unfortunately this isn't possible (as far as I understand); else, all workers who pay over 30% marginal tax rate on average would have Pty Ltd companies and be paid this way. ATO prevents this through the application of a test of how your income is derived; basically, if you only have one 'client' (i.e. your employer) and/or > 80% of income comes from one client (i.e. your employer) then the income is treated a 'professional services income' and subject to tax at normal marginal tax rates, not the company 30% tax rate.

But I'm sure there's an accountant or two around here who can clarify this.

That said, I'm not sure if professional sports people, actors, artists etc come under a different tax structure - I wonder about this every year when doing e-tax and there's a specific section for these types of workers - however maybe what the above poster has said about averaging out over 4 years.