In the last edition of the newsletter we discussed a case concerning the South Sydney leagues club which we thought would be the last of the ‘Super League’ cases. The point involved in that case was whether or not the restriction on the number of clubs that could play in the competition was an unlawful restraint of trade.
In that case the court said that even though the effect of the restrictions was to reduce competition the restrictions were not unlawful because the purpose of the restrictions was to ensure that the competition remained financially viable.
It seems to me that the same may be said about the salary cap, ie the ultimate purpose is to try and ensure that the clubs and the competition is financially viable. A competition dominated by a small number of wealthy clubs is not likely to last because all the ‘other’ clubs will go broke eventually.
I imagine we have not heard the last of this issue.