Quote ="Starbug":w674qq9nNo mention of clubs bancrupting themselves chasing the bigger ones though ?'"
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Actually the paper talks about this point:
[i:w674qq9nTo protect and nurture a broad competitive playing structure by preventing clubs trading beyond their means and/or entering into damaging and unsustainable financial arrangements [/i
The White Paper on Sport states that a legitimate objective of sporting rules will normally relate to the organisation and proper conduct of competitive sport and may include 'the ensuring of financial stability of sports clubs and teams'. (84) In the history of the Super League playing competition two clubs have encountered serious financial difficulties: Paris St Germain (prior to the salary cap's introduction); and London Broncos in 2005 (following the salary cap's introduction). Both teams were located in a geographical area which did not have a supporter base with a strong tradition of following rugby league. In the case of London Broncos the club was permitted to reform and continue operating in the Super League competition. Paris St Germaine was dissolved at the end of 1997. In both cases factors other than player wage costs, such as the geographical location of the clubs likely contributed to the difficulties that the clubs encountered.
Other rugby league clubs in competition divisions below Super League have encountered financial difficulties. In 2007 Widnes Vikings, a National League Division 1 club was placed in Administration following its unsuccessful attempt to secure promotion to the Super League competition. The Super League competition no longer operates under a rule of promotion and relegation thereby lessening the tendency for clubs to invest heavily in playing talent to gain promotion into the competition.
Additonally, the licensing regime recently introduced into Super League competition provides an incentive for clubs not to get into financial difficulty. From 2009 clubs require a licence to participate in the competition. Licences are issued for a three-year period and clubs will need to re-apply for a licence in 2011. The criteria applied for issuing a licence includes consideration of the financial stability of the club and its business performance. The licensing regime, therefore, provides a means of 'preventing clubs entering into damaging and unsustainable financial arrangements' which has a less restrictive effect on the market for playing services than the salary cap. A Super League club that gets into financial trouble is likely to face difficulty obtaining a Super League licence.
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So I guess the argument is: there are other means to address this issue, and the salary cap is not necessary to achieve the aim of financial stability for the clubs.