The most significant question in the Melbourne Storm salary scandal is not who knew what and when in the Storm management, but why did the NRL decide to hand down its punishment without convening a full meeting of its board?

On one level, the answer is simple: because it didn’t want the News Ltd directors to be involved in the process, given their potential conflict of interest. News owns the Storm, half of the National Rugby League competition and half of Fox Sports, which broadcasts the competition.

News also controls Valimanda, a holding company that is technically responsible for all deals relating to Storm sponsorship, corporate sales and merchandising.

The deeper, as yet unanswered question is: how can the NRL let News continue to occupy this role? The commentary to date has focused on the responsibility of News to prop up the club it owns by an estimated $30 million — which the NRL will be grateful for. Without this source of capital, the Storm would almost certainly fold — and quickly.

But by doing that, the NRL is asking News to act in the interests of one club, as against the whole of the competition, which it has a concurrent responsibility for through its 50% ownership of the NRL.

Before this scandal broke, News had been making noises that it was considering sell out of its ownerships of the NRL. Now, it seems that plan must be delayed, for legal as well as commercial reasons — News needs to fulfil its obligation as owner of the club, for better or for worse, as is now the case.

Yet if News remains on the NRL board, as everybody wants them to in the short-term, it raises a much more important dilemma: how does the NRL board ever make an independent decision about the Storm? Beyond that, how does the NRL board ever make an independent decision about any other problem with another club?

It’s not hard to imagine the thought bubbles of News Ltd’s directors when the board is presented with any number of a minor fires, let alone scandals, involving either its own club or another club. Take the Greg Bird or Brett Stewart cases from last year.

“Is this punishment as tough as what the Storm got? Why didn’t the NRL punish the whole of the Manly club for its muted response to the Stewart incident?”

Think back to the Four Corners/Matthew Johns affair: even independent observers have wondered why the NRL did not hand down a collective punishment (a fine or some other sanction) to the Cronulla club for bringing the game into disrepute? The collective behaviour of several of its players reflected on the club, and the league. Wouldn’t a News Ltd director be entitled to think, or say: “what about them?” And if it’s not said, it might weigh in their minds the next time they have to make a decision.

Perhaps the NRL, having taken such a hard-nosed and long-term approach to punishing the Storm, needs to go even further: let News go and let the Storm fold. That way, the NRL board can actually act independently, and in the best interests of the game, rather than always having to balance the interests of one club with the rest of the competition.

The comments by the Storm’s disgraced former chief executive Brian Waldron in today’s Fairfax papers capture the problem perfectly. “One well-placed source said Mr Waldron had named News Ltd executives and NRL executives as being aware of claims of widespread salary cap cheating for years.

“Mr Waldron believed News Ltd — the owner of Melbourne Storm — and the NRL have vested interests in deflecting attention from suggestions they knew about systemic pay cheating,” the Fairfax press reported.

What body could pursue these claims with an independent cast of mind? Not the NRL. Until the NRL disentangles itself from News, its decision-making, and ethical standing, will be compromised. There is an even thornier question: could News sue the NRL for having acted without the consent of the full board when it announced its punishment of the Storm? In turn, this would call into question the validity of the punishment itself.

That would obviously be a bad look for News, and a nightmare for the NRL. But then, that’s exactly what both face already.

This article first appeared in Back Page Lead: a new sports opinion website — at backpagelead.com.au — that provides sports content for Crikey.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW