Premiership Rugby Salary Cap - Should It Stay Or Should It Go?

Following the news that Dan Carter, the New Zealand fly half, will sign for Racing Metro following the Rugby World Cup (and at the same time, become the world’s best paid rugby player), there has been some discussion regarding the policy in the English Premiership about the salary cap. Saracens CEO Edward Griffiths lead the call this weekend that the cap should be scrapped and claimed he had the backing of six other clubs. I’m not sure how accurate that is considering all I have seen since that declaration is most clubs distancing themselves from Griffiths’ comments and supporting the cap. I intend to discuss the pros and cons of scrapping the cap but before I do, I just wanted to briefly mention what level the cap currently is. For the 2014/15 season, the cap is £4.76m with £240k extra available for academy credits (available for players who joined their club before their 18^th birthday, is under 24 at the start of the season and earns more than £30k per season), and each club is allowed 2 excluded player whose salary is not included in the cap. The cap is being increased for the 2015/16 season to £5.1m with £400k extra available for academy credits. Each club will also now be allowed to nominate two excluded players. How I am going to approach this debate is start with the statement “Premiership Rugby should scrap the salary cap” and list the pros and cons that I can think of for this before concluding at the end.

Premiership Rugby should scrap the salary cap.

Pros:

• One thing that I just learned that came as a surprise to me is that there is a salary cap on clubs who play in the Top 14 in France. I assumed due to their free spending ways that there wasn’t (one came in for the 2010-11 season). However, it is a much more generous cap than is available for other clubs in Europe, particularly Premiership Rugby clubs. In 2013-14, the cap for French clubs was increased from €9.5m to €10m with young players being excluded from the cap unless they earn more than €50k a season. Additionally to that, each club is allowed to exceed the cap by €100k per member of the France squad they have in their team. With everything factored in, that is essentially double the spending power available to Premiership Rugby clubs (and more than double for Pro-Direct 12 clubs) which naturally gives them a bit of an advantage when it comes to Europe. The last 5 Heineken Cups were won by Toulon twice and Toulouse once (and Leinster twice, from Ireland). By the looks of this year’s European Champions Cup, the French teams are going to have a good showing in the quarter finals, potentially filling 4 of the 8 places available. If Premiership Rugby were to scrap the cap, then English clubs could potentially strengthen their squads to make them more competitive in Europe and make things more level with the French clubs. 

• In less than 2 weeks time, it will be 2015 and that means we are in a Rugby World Cup year. For all fans of rugby this is a big deal but for English fans in particular, this is even more of a big deal because the tournament is being held in England. This means that all the best rugby players will be coming to Europe for just over a month to compete for the biggest international prize in rugby. I anticipate that this will lead to TV viewing figures to increase as people who may not usually be interested in rugby might tune in to watch some of the world’s best play each other. If Premiership Rugby scrapped the salary cap, a lot more of these players could be signed to Premiership clubs and watching the world’s best players every week could be a reality.

Cons:

• The current salary cap is due to increase next season to £5.1m (plus all the extras). Every time the salary cap increases, it widens the gap between the richer and poorer clubs (the haves and the have nots) and makes the Premiership much less competitive. While it could be argued that the league isn’t that competitive anyway (for the last 3 seasons, the top 4 has consisted of the same  four teams), removing the salary cap would completely do away with the competitiveness of the league as clubs who have a lot of spending power at their disposal would just dominate over teams who don’t. Even increasing the salary cap further (as has recently been suggested by the Exeter Chiefs chairman) would increase the gap further and is something to be wary enough. I am sure teams like London Welsh would argue the gap is wide enough as is! Which leads me on to the next point. 

• This point is quite similar to the last one when it comes to widening the gap between clubs. One thing that needs to be considered though is what happens when a team is promoted to the Premiership. I don’t think it is unfair to suggest that London Welsh are going to get relegated this season. It is quite likely that one of Bristol or Worcester will replace them (I’m not sure how many teams in the Championship are actually eligible for promotion, but that is another issue for another day). London Welsh came up, and with limited funds at their disposal, they built a squad they hoped would be able to compete. That clearly hasn’t worked out well. I seem to recall in the build up to the Championship final, barely a day would go by without Bristol announcing they had made a signing pending on their promotion to the Premiership. Now, they didn’t win promotion and some of those players didn’t end up joining them. Would scrapping the cap mean promoted clubs being at a disadvantage from the off? There are already question marks over the fairness of the funding the clubs receive from Premiership Rugby, scrapping the cap would mean that newly promoted clubs (unless it was Worcester or Bristol) would receive less money than everyone else and then have to try and spend a really significant amount of money just to maintain their Premiership status. 

• There has been some discussion this season regarding a rule that came into place in 2011 (I think it was) regarding England and their selection policy. It is fairly straightforward – if you are qualified to play for England but play your rugby outside of England, you will not be picked for the England national team barring “exceptional circumstances”. What this means is the best English players are in the Premiership and get regular game time to improve their game against competitive opposition. Would this still be the case of the salary cap was scrapped? I’m not so sure it would be and the best example I can give of this is looking towards another England national team – the football team. There is no real control of spending in football and clubs in England have signed a large number of players from abroad (and on the flip side, very few of England’s top players play abroad). One of the knock on effects of this has been that the national team just doesn’t have enough good players to compete. The English players are not getting enough opportunity at the top level to become world class and as a result, the England football team just cannot compete on the world stage against the best teams (or as was shown in this year’s football World Cup, even against teams that aren’t the best). If spending controls were removed from Premiership Rugby clubs, there would be nothing stopping them from filling their squads full of the best players from Europe and the southern hemisphere and all of a sudden, there are fewer opportunities for the best players from England to play at the top level.

In conclusion, I would say that I am in favour of keeping the salary cap and keeping it at the level it is currently at. While I agree that it is necessary that English clubs are competitive in Europe, I feel as though our domestic game is more important and having a stronger national set up is essential. There is very little that can be done now to close the gap between the richer and poorer clubs, but opening it even more would create a two-tier top level of English rugby which wouldn’t be good for anyone in the lower tier and would mean the only games worth watching would be when the two richest teams played each other. That might seem like quite a dramatic picture I am painting there but it is certainly a possibility. For the future of domestic rugby in England and a strong national team, Premiership Rugby needs to keep the salary cap. As a final note, it was interesting that the day after the Saracens CEO said the cap needs to be scrapped that it came out investigations are taking place about salary cap breaches for both Saracens and Bath – the two richest clubs in the Premiership (I believe). I’ve long heard rumour about Saracens and questioning how they are under the cap, but it was the first time I’d heard anything about Bath. From what I read, it was a disgruntled former agent that has revealed that Saracens operate in breach of the salary cap regulations, whereas Bath are being investigated for the number of high salary offers they appear to be making to players. As a Bath fan, I hope it is not true, but if both clubs are found to be in breach of the cap rules, they both need to be punished to send a message that breaching the salary cap regulations is not acceptable.