Premiership Rugby announce new Salary Cap powers

Premiership Rugby today confirmed the newly approved Salary Cap regulations for Aviva Premiership Rugby clubs, introducing a ‘new, more transparent, Salary Cap monitoring and investigation system’.

“As a collective, Premiership Rugby and its clubs led the way in England when in 1999 they introduced their Salary Cap in order to ensure the continuing financial viability of all clubs,” said Premiership Rugby Chief Executive, Mark McCafferty.

“Their objective was to control inflationary pressures on clubs’ costs, and to provide a level playing field for clubs to ensure a competitive Aviva Premiership Rugby competition.

“These objectives are borne out in the financial success the league is now seeing, with a healthy turnover of teams at the top of the league. We have also had three different winners of the Aviva Premiership Rugby competition in as many years, in the most competitive league in world rugby (highest number of games finishing in less than one score compared to any other rugby competition in the world).

“Having a compelling and unpredictable Aviva Premiership Rugby competition is at the centre of Premiership Rugby’s strategic objectives. It is a crucial factor in increasing the commercial value of the competition through its new broadcaster, BT Sport, and seeing the renewal of its title sponsor, Aviva.”

“It was inevitable that as the game develops we would conduct a review of the Salary Cap,” added Phil Winstanley, Rugby Director at Premiership Rugby.

“Salary Caps exist in many commercially successful sports around the world. The most obvious examples are the NFL and NHL in the USA, and the NRL and AFL in Australia.

“The introduction in football of UEFA’s Financial Fair Play and the Premier League clubs’ new financial regulations, together with Salary Caps in Rugby League, County Cricket, and in rugby union with France’s Top 14 and the Welsh Regions, all demonstrating how European sport has recently grasped the importance of controlling costs and long-term financial sustainability.”

The full statement from Premiership Rugby reads:

All Aviva Premiership Rugby Clubs are now subject to a new, more transparent, Salary Cap monitoring and investigation system. Following a detailed consultation by the Salary Cap Manager with all of the Clubs on the operation and management of the Salary Cap, the Premiership Rugby Board has recently approved increased monitoring, investigation and transparency systems to support this important area of Premiership Rugby business.

Premiership Rugby may now undertake an Investigatory Audit in addition to the current annual Salary Cap audit which can involve using independent experts, to access relevant records held by a club who are suspected of breaching the regulations. There will also be clear sanctions to deal with any Club failing to co-operate.

Being open and transparent, both internally and externally, will support the management of the Salary Cap in many ways. In particular it will help promote the effective administration, management and governance of the Salary Cap to the Clubs and key stakeholders within Premiership Rugby.

The Premiership Rugby Salary Cap was set up to achieve the following objectives in an appropriate and proportionate manner:
(a) ensuring the financial viability of all Clubs and of the Aviva Premiership Rugby competition;
(b) controlling inflationary pressures on Clubs’ costs;
(c) providing a level playing field for Clubs; and
(d) ensuring a competitive Aviva Premiership Rugby competition.

The new system also means that any clubs suspected of breaching the Salary Cap will be subject to a confidential disciplinary hearing with the sanction of both a points deduction and fine available. Any breach and the sanction will be made public.

Sport Resolutions UK, will run the disciplinary procedure, appointing an independent panel of legal experts and overseeing any appeal procedure.

In the 2013-14 Season the total Salary Cap comprises of:

£4.26 million – Senior Salary Cap
£240,000 – Academy Credits
1 Excluded Player (Salary is not included in the Salary Cap)
Injury Replacement
Clubs can also benefit from the £200,000 Academy Cap (£200,000, which is for all Academy Players under the age of 24 years old and earning less than £30,000 Salary) which supports the development and retention of home grown talent at each Club.

15 thoughts on “Premiership Rugby announce new Salary Cap powers

  1. France have a salary cap? Has anyone thought of nipping down to Toulon and seeing what their total salary bill adds up to?

    Good news though, I do think the Salary Cap is important, and I like the allowance for academy players.

  2. Seems an odd time to be reviewing the salary cap when you don’t know what your income is likely to be from European competitions………..

  3. Mentioning France’s salary cap is funny. It’s 10 million Euros. When it was introduced it was already higher than any wage bill any French club had. It doesn’t include youth players earning “only” £50,000 and, much like England, doesn’t include outside money e.g. if your clubs main sponsor suddenly decides that Jonny would be a good advert for his new product. It hasn’t stopped the big likes of Brive and Biarritz spiraling into financial and rugby meltdowns.

    “in the most competitive league in world rugby” Yawn, yawn…..

    1. “in the most competitive league in world rugby” Yawn, yawn…..

      I thought the exact same thing when I read it; but in the defense of the Premiership (as I feel I have to) it does justify this statement with a fact about the most close matches…

      1. Agreed Jacob, the defence of the fact is sound, it’s just the boring repetition of it whenever they announce anything.

    2. Not claiming to be the best league, if it’s true that it’s the highest likelihood of the game being within a score then a claim of most competitive is fair enough.

      It’s not like all the losing bonus points are being handed out in 6-3 snore fests at the moment either, some good rugby being played. Even Sarries have woken up to the fact that it’s possible to score more than 3 pointers.

  4. Does anyone know how the clubs that are alleged to exceed the cap currently work around the rules? My guess would be sponsorships and maybe bonuses? Whatever the loopholes are I hope they close them and keep the premiership competitive.

    1. I believe clubs often pay expenses like housing etc. – therefore meaning they can pay the player less but the player is still very comfortable financially.

      I may be wrong but I have heard rumours of that sort before.

      1. Wow, that’s an expensive way to do it. Employer has to pay huge amounts of tax on those types of benefit as I understand it.

        1. Those types of benefit are just viewed as extra salary so would just be income tax so no reason to believe the company pays the tax on those (my company deducts the tax on my medical insurance from my pay as part of PAYE).

      2. Jacob, that can’t be right? That would be a tax liability so would need to be declared and hence the breach of the cap would be spotted quite easily (I’m assuming tax filings are one of the pieces of compliance evidence – hmm, perhaps I’m assuming too much that the policing of this thing is on anything more than a handshake?).

        1. As I said it is very much off of rumours so I have no idea on the ins and outs. But I have heard it a few times.

          On a much smaller scale my amateur cricket club who is not allowed to pay more than two players, puts up SA and Australian cricketers in housing for the summer through friends of friends. It is obviously policed nowhere near as closely as I assume this is; but I am pretty sure there are backhanded ways around it.

    2. Also working very much off rumours, I’ve heard of certain clubs with links to another country funding things for players from said country, in that country itself. Thus avoiding the salary cap in England.

      Again, all just speculation.

    3. Under these arrangements the scope for cheating does seem to be pretty limited. Clubs and players that feel themselves disadvantaged will always be ready to point their fingers at the cheats and the penalties for any cheats seem adequate. I believe the players retain ownership of their own image rights so if George North, like Jonny Wilkinson before him, elects to advertise – well almost anything – his rewards will be substantial and comletely outside the salary cap. Also clubs and players both receive payments for international ‘availability’. How does this effect the salary cap? does anyone know?

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