A Solution to the Perennial Salary Cap Dilemma?


Heading into the 2014/15 Aviva Premiership season, the league’s oft-criticised salary cap is set to increase by £500k, from £4.5m to £5m. For some, this is not enough to ward off the overtures from free-spending French clubs, whilst for others, it’s a worrying step down a road which could lead to the Premiership becoming a haven for southern hemisphere players seeking lucrative contracts, as the Top 14 seems to have rapidly become. One solution, which, to my knowledge, hasn’t previously been suggested, is the introduction of a new ‘hard cap’ above the current salary cap.

For those unfamiliar with the National Basketball Association in the United States, which uses a very similar system, it more or less allows for teams to exceed their salary cap if they are re-signing a player who has been with their franchise for three or more years. Transferred to the context of the Premiership, this would allow teams to retain home-grown talent without increasing the regular salary cap, as that opens up the possibility of an influx of foreign players, potentially to the disadvantage of the national team. This rule could also be adjusted to require a player to have spent four or even five years at a club before becoming eligible, which, given the amount of time required, would likely limit the this hard cap space solely to graduates of a club’s academy.

An initial hard cap of £6m would be enough to give teams the wiggle room they need to ensure key players can have their contracts extended, without creating a significant dichotomy between the richer and poorer teams in the division, as we have seen in the Top 14. To borrow another idea from the NBA, teams exceeding the salary cap could be taxed on every pound they spend over it, with the proceeds shared amongst the smaller revenue generating clubs and/or invested into the sport at the grassroots level. The latter idea would likely require league reform on a huge scale, particularly if a revenue sharing system were to be implemented, and admittedly may not be feasible in the immediate future.

Though this does little to bridge the financial chasm that the Top 14 is creating in European rugby, as with the current salary cap, this hard cap could also be fluid, increasing as revenues do and staying relevant with players’ increases in salary demands. There is also no reason why a similar system couldn’t be implemented in the Top 14, particularly if, as owners like Mourad Boudjellal are stating, they are serious about building teams around a core of players developed at their own clubs. It’s difficult to see Top 14 clubs being eager to adopt such a system as things stand, but if the French national team continues to struggle, pressure from the French Rugby Federation may be enough to make them consider it.

In a nutshell, the introduction of a higher hard cap should, in theory, allow teams to more proficiently retain home-grown players without opening up the possibility of clubs taking advantage of an increase in the salary cap to bring in veteran foreign players. It is actually not entirely dissimilar to the Academy Credits system which makes up part of the current salary cap. These credits, which can reach a maximum of £240k, are only usable on players who joined their club prior to their 18th birthday and are currently under the age of 24. As a player is yet to reach his peak at the age of 24, they do not really help clubs retain key assets whom the club has developed, despite their obvious use in retaining younger players.

There are plenty of other ideas being mooted, such as the introduction of a minimum salary cap to ensure the Premiership remains arguably the most competitive division in the northern hemisphere, but none that help arrest potential player exoduses without causing as many problems as they solve. This system has helped NBA franchises keep hold of players that they have sweat blood and tears to develop, and despite significant differences between the two divisions, there are no reasons it could not do a similar job in the Premiership.

by Alex Shaw (@alexshawsport)

Photo by: Patrick Khachfe / Onside Images

3 thoughts on “A Solution to the Perennial Salary Cap Dilemma?

  1. Maybe it’s me but I really cannot see why the salary cap is such a dilemma. It’s main purpose is I believe to try and ensure a level playing field within the premiership and thus to ensure that the league is as competitive as possible. As such surely the only relevance of a salary cap is within the league concerned. Why do we care if the top 14 salary cap is much higher than the Premiership’s? If the french hoover up all of the top southern hemisphere and celtic players that is no detriment to either England or the Premiership. It’s only a problem if many top English players move across the channel and that could be countered if need be by RFU match fees etc. Might one result also be to encourage premiership clubs to sign more England qualified players if they cant afford to compete for the SH stars. Apologies to our celtic neighbors who may lose their players but I lack the bandwidth to deal with all of Europes problems

    I accept that this may make it more difficult for English clubs to compete in Europe but thats a problem that can only be addressed by a Europe wide salary cap or foreign player quotas. Eventually I suspect the French Federation will have to step in to save the national team.

  2. I like the principle, but maybe it ought to be applied to English qualified players only or those in the England/Saxons squad. Not sure about the legalities of this proposal, but if it was a salary top up from RFU, would it get around European employment legislation?

    1. I don’t see any problem with employment legislation. I believe that this already happens to a degree. I don’t know the details but I recall reading somewhere that last year players earned a match fee of £15,000 per game for the six nations so potential earnings up to £150,000 on top of their club salary in a ten test year, so a star player can earn say £250,000 from his club plus up to £150,000 England match fees and whatever they can earn from their image rights.

      The French clubs may offer a higher salary but it’s the players performance in an England shirt that builds their value and earning power in the first place. More potent attractions across the channel might be the advantageous tax position of professional rugby players and the Southern lifestyle. All in all I dont think we should worry about this too much.

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