With tax-free money to burn, Chiefs have sent a shudder through the NRL

They are the mysterious underbelly of NRL player riches and stand to send the earning capacity of the PNG Chiefs into the stratosphere.

Third-party deals lie adjacent to the game’s official contracting structure, organised between player agents and companies that wish to sponsor their clients.

They have propped up the income of many a footballer while also being at the centre of some of the murkiest episodes in the code’s modern history – the salary cap scandals at the Melbourne Storm and Parramatta Eels.

It has never been a level playing field, with players at powerhouses such as the Brisbane Broncos and Melbourne Storm having been able to command more commercial interest than those at smaller clubs, particularly in the crowded Sydney market.

However, recruits to the expansion team in PNG could take third-party deals to the next level.

“There will be a lot because there’s so many companies, so many big companies, especially in the resource sector,” PNG Sport Minister Kinoka Feo said.

“I think that’s where the players will be making some good bucks as well.”

The prospect of that was not lost on those already embedded in the game, with Bulldogs general manager and Nine commentator Phil Gould predicting third-party opportunities in PNG would be “absolutely endless”.

This was the week in which the rubber hit the road for the Chiefs and their future rivals in the NRL.

The Chiefs’ ability to offer players tax-free wages was no secret, but their capture of influential four-time premiership winner Jarome Luai – and his courting with a private jet paid for by the PNG government – has sent a shudder through the competition.

PNG always needed to be given an advantage to attract players to relocate to Port Moresby, but with a hint of buyer’s regret from clubs, who will receive $4 million each from the Australian government’s $600 million Pacific NRL package, questions are being asked about how much of an edge is too much.

Not only will players be exempt from paying tax on their club salaries, but third-party payments in PNG will also be tax-free, potentially inflating the in-the-hand earnings of someone such as Luai to more than $2 million a season. 

According to the competition rules, third-party deals must be arranged at “arm’s length” from clubs and must be pre-approved by the NRL, which does not include them in the salary cap once they’re registered.

That means clubs can introduce players to possible third-party sponsors, but can’t be involved in striking a deal between them and can’t use TPAs to entice would-be recruits. Players have to perform some kind of service in return for such payments, which can’t be provided by existing club sponsors.

The Chiefs are well aware of the restrictions, and such is their desire to stay away from any controversy, they do not intend to even make such introductions.

It is a landscape, though, that has been notoriously difficult to police even when clubs are compliant, and the deep-set corruption in Australia’s nearest neighbour adds another layer.

PNG was rated equal 142nd out of 182 countries in Transparency International’s latest Corruption Perceptions Index, level with Cameroon and Kyrgyzstan. The lower the ranking the better.

An additional factor is that the Chiefs, like the incoming Perth Bears, are owned by the very organisation that administers the salary cap rules.

ARL Commission chairman Peter V’landys dismisses any suggestion of a conflict, saying “any club, owned by us or anyone, will be treated equally” and prospective third-party agreements would be assessed “with no fear or favour”.

“I’m not overly concerned because most of the third-party deals will come from companies that are going to be trying to do business in PNG. It’ll be the big multinationals that are there for the mining, and there’s quite a lot of them,” V’landys said.

“We have utter faith in the management there and [the Chiefs] have got a very good board.”

They are certainly off to a flying start.

Convincing a player of Luai’s stature to pack up and make Port Moresby his home was what Prime Minister Anthony Albanese must have been hoping for when he decided to bankroll an NRL team in PNG in Australia’s security interests.

An unprecedented soft diplomacy endeavour, it is all about warding off China’s influence in the Pacific and has already helped deliver a landmark defence treaty between Australia and PNG.

It is a complex undertaking, which was underscored just a day after Luai’s signing when PNG Prime Minister James Marape – who had watched a local game with the Wests Tigers co-captain last Sunday – set off on a three-day visit to China to boost economic ties.

There is also a Chinese link, albeit distant, to the company, that has been brought on by the Australian government and the NRL as project manager for the Chiefs’ $70 million centre of excellence training facility to be built next to the national stadium in Port Moresby.

According to corporate records, its founder was a director of an organisation called the Australia-China Development Association, which held annual business forums in Brisbane in the late 2000s. It made headlines during that time for funding the overseas travel of Hong Kong-born, PNG-raised then federal Liberal MP Michael Johnston, including several trips to China.

That was a different time – before Xi Jinping had even come to power in Beijing and before Luai had finished school in Blacktown.

Now 29, Luai’s name won’t have been on the lips of many in Guangzhou this week aside from Marape and his official delegation.

But on the streets of PNG, the Samoa international and NSW State of Origin representative is all the rage.

“When [Luai] came up with his manager … they asked a question about security,” said Feo, the sports minister. “I said, ‘You’ll be killed with love, that’s all’.”