The WRU announced this afternoon that the country’s four provinces; the Scarlets, Ospreys, Blues and Dragons, will from the beginning of next season operate within a financial budge of £3.5 million, £500,000 less than the teams in the Aviva Premiership. This will not include development players or academy costs. Selections from the official statement can be found below:
“The Scarlets, Ospreys, Cardiff Blues and Newport Gwent Dragons have united under a landmark legal agreement that will seek to deliver greater long-term sustainability in regional rugby supported by the WRU.”
“Designed to be considerably more straight-forward in its execution than other cap mechanisms already in place, both within rugby and other world sports, the regional cap of £3.5m covers purely the registered European squad of each region from the 2012/13 season and does not include development players or academy costs.”
“The agreement will commence July 2012 – 30 June 2013 and will be reviewed annually with the initiative regulated by the scrutiny committee comprising board level representation from each of the regions, Regional Rugby Wales Chief Executive and an independent chairman. The scrutiny committee will ensure the cap is fully adhered to and accurately reflects the economic climate and the financial requirements of the Regional organisations. All existing player contracts will be honoured in full.”
“All four regions are working very hard indeed to manage their businesses more effectively in a very difficult environment for everyone. As part of that, it is essential that every element of the circa £30m annual costs involved with operating four professional rugby businesses in European competition, is examined in detail and managed effectively. The introduction of this agreement and the European squad salary cap illustrates pragmatic and responsible action in tough times.”
How will this impact Welsh domestic rugby going forward? With attendance figures sliding and a handful of stars linked with moves abroad, as we discussed earlier today regarding Adam Jones, is this a bad move? Give us your thoughts.