Salary Cap changes

[fleabane]

From The Telegraph:

Premiership clubs have unanimously agreed to slash temporarily the salary cap to £5 million for the 2021-22 season in a bid to avert financial oblivion.

The number of marquee players, whose salary is not counted towards the salary cap, will also be reduced from two to one for the 2022-23 season. While players’ salary levels in their current contracts will be protected, the next round of negotiations could lead to an exodus of leading players. Saracens, for example, will struggle to retain England stars Owen Farrell, Maro Itoje, Jamie George, Elliot Daly and the Vunipola brothers while making £1.4 m of savings.

With their team-mate George Kruis already heading to Japan, one leading agent predicts the Premiership will lose its destination status for domestic and overseas players once the cuts kick in.

“Japan has really opened up as a destination for northern-hemisphere players,” the agent said. “They have the money behind them and have become the dominant financial market. The Top 14 will continue to be a market because you have billionaires like [Mohed] Altrad and [Jacky] Lorenzetti. They will pay more for quality players. Even if you look at Pro 14 at Leinster, Munster, Ulster if they go out to get a non-Irish player they will pay the money to get a quality player. The Premiership could get left behind pretty quickly.”

It is hoped that the reduction will save several clubs facing existential threats caused by the coronavirus pandemic. The salary cap currently stands at £7m, including credits which amount to £600,000, and that will remain in place for the remainder of the current season and the following 2020-21 campaign. After reducing the base level by £1.4m in the 2021-22 season, the cap will be increased gradually so it returns to its present limit by the 2024-25 season. There will also be a series of additional credits for fielding English qualified players and providing players to the England squad amounting to £1m.

Although the agreement was unanimous at a board meeting on Monday morning, divisions remain entrenched between the 13 clubs. An announcement was prepared for Monday afternoon only for infighting to break out over the wording of the statement. An official release is expected to be made on Tuesday.

Clubs such as Bristol, who were opposed to reducing the salary cap, were won over by the promise that the changes would be temporary. There is also a mechanism that will allow all existing contracts will be honoured where only 75 per cent of their salaries will count towards the salary cap from the 2021-22 season. Hence Bristol will not be forced to offload big earners such as Semi Radradra, Kyle Sinckler and Charles Piutau during their current deals. The Telegraph understands that Bristol will not be forced to impose a blanket 25 per cent pay cut on their squad as several other clubs are proposing.

Even with those compromises, the cuts are likely to lead to a period of severe retrenchment in the next round of contract negotiations. Yet the greatest priority in the board meeting was survival. There is no doubt that the Premiership, as it currently operates, is unsustainable. Lord Myners’ recently published report into the salary cap revealed clubs collectively lost £89m in just two years.

Harlequins chief executive Laurie Dalrymple is adamant that change had to happen, even before the coronavirus pandemic struck. “We knew before Covid that, financially, the structure of rugby is fractured,” Dalrymple said. “It’s not working. We need to commercialise our sport far better than we have been, and that is not something for just Harlequins, we all need to look at how we are generating money into the sport as well as spending it.

"The salary cap is there to protect the financial security of the club and the league - and at the minute, it is not doing that. I think it has to be lowered in keeping of what will make the clubs sustainable. But also if we lower it, we have to be cognisant of the fact that when we do get our sport operating commercially, we have to then raise it appropriately and fairly as well.”

Whether the changes will kick in fast enough to save all 13 clubs, some of which are already teetering on the brink of insolvency, is another matter.

[RagingBull]

Will be interesting to see what happens with the squad guess in reality confirms Manu's last season I guess.

Off the top of my head I think end of contracts next season are
1. Bateman
2. Youngs, Kerr, Clare
3. Cole, Leatigaga
4. Green
5. Wells
8. Coghlan
9. Youngs
12. Eastmond, Reid
13. Manu, Taute
15. Veainu

I think that's the case might be wrong with a couple, hard to judge how long we gave academy players etc.

[kk20gb30]

Reflects the new (if temporary ?) reality.

[RagingBull]

According to the mail an extra 400k in academy credits

Also both marquee places will stay in place.

[RichieB]

We really need to keep hold of our quality youngsters. If we can, we should be in a strong position in the near future.

[Longshanks]

It'll be very interesting to see what happens, if anything, in other countries - especially France. There was already a difficult disparity between English and French sides with no cap applicable to the latter; unless a cap is introduced in France then this latest step potentially makes a bad situation worse.

[Old Hob]

Professionalism brought some useful changes but has done far more harm than good. This is just another nail in the coffin of what used to be a great game but is now somewhere players openly talk of hurting opponents, where drug abuse to assist body building is increasingly common among young, vulnerable players and where greedy players and agents view it only for what they can get out of it. A salary cap freeze or reduction and everyone who can leaves??? It just shows the values these people have - money, money and more money. If players like Manu stay they will keep my respect - if they go...

[wellstiger]

Therefore we can assume.....
France and Japan will be the hot places to earn your crust and build a nest egg for your early retirement.
The French teams will profit from Prem elite players chasing a crust and. dominate European Cups.
BT ,Sky etc will ditch Prem Rugby, Championship rugby and Womens Rugby to chase the market.

Is it me or instead of awarding lesser clubs throughout with financial incentives to help them survive, we are going "to throw the baby out with the bath water".

Well done we are going back towards an Amateur era.......
Temporary he says. Bahh Humbug

[JP14]

It will make Prem Rugby more sustainable, and I'm not sure the quality of rugby broadcasted can be much worse than what it was pre-lockdown, this is to stop the hyper-inflation of player's wages. This coupled with the rigorous continued enforcement of national select policy will hopefully prevent many English superstars from leaving and ensure more game time for academy players therefore, fingers crossed, more talented youngsters will break through.

[Roadsweeper]

Maybe it will stop clubs paying big money for second rate southern hemisphere players and concentrate on good quality English qualified players.

As we know some clubs have also regretted some of their less successful marquee players, who don't look so good in our league.

We need to also stop slogging about in the mud, wind and rain if we want to see a good product both live and on TV.

[BFG]

Maybe it will stop clubs paying big money for second rate southern hemisphere players and concentrate on good quality English qualified players.

As we know some clubs have also regretted some of their less successful marquee players, who don't look so good in our league.

We need to also stop slogging about in the mud, wind and rain if we want to see a good product both live and on TV.

That's potentially the biggest positive of changes in my opinion.
The game might need to take a step back in order to take steps forward in the future.

[ourla]

Surely all the other Leagues/Unions will have been similarly affected?

They can't have all got away scot free?

[Leicestertinytiger]

Most teams I imagine will now have a defined starting XV with squad players after that. Gone will be the days of Castro, Cole and White fighting it out at tighthead or Mafi and Croft as blindside options.

I’m glad that the agreement has been reached, although no club has to spend up to the cap, they seem unable to be able to make that decision themselves independently.

[Ian Cant]

I’m glad too that the clubs have seen sense. Clubs couldn’t carry on making considerable losses each season. My mates who have their own businesses and follow Tigers have regularly commented on the ridiculous situation with Tigers and other clubs making huge losses saying their businesses would be allowed to continue! Only Exeter making a profit and on smaller crowds than us. Great budgeting and marketing by them.
Bristol of course has their billionaire owner!
Tigers will make some staff redundant, which is sad but I’m optimistic that the club has the right people to bring financial stability and in time, more success on the pitch.
Keep safe everyone and good luck Tigers.

[TigerBoy1880]

Maybe it will stop clubs paying big money for second rate southern hemisphere players and concentrate on good quality English qualified players.

As we know some clubs have also regretted some of their less successful marquee players, who don't look so good in our league.

We need to also stop slogging about in the mud, wind and rain if we want to see a good product both live and on TV.

You’ve never seen exciting matches then? You obviously don’t watch much rugby.