Salary Caps can be found in a number of sports around the world, from the NFL to rugby league, but the most recent major update with these has come within rugby union, specifically Premiership Rugby’s release of its Salary Cap review of 2020-21.
The full report has given detailed insights and analysis into the expenditure of the 13 clubs involved in the competition. Here, we’ve summarised some of the key findings and assessed the impact the Cap has, and is making, on English rugby union’s top tier and the wider sporting community.
The Premiership Rugby Salary Cap explained
The official line from Premiership Rugby on why the Salary Cap was introduced back in 1999 was to help achieve the following:
- Ensuring the financial viability of all Clubs and of the [then] Gallagher Premiership Rugby competition
- Controlling inflationary pressures on Clubs’ costs
- Providing a level playing field for Clubs
- Ensuring a competitive Gallagher Premiership competition
- Enabling Clubs to compete in European competitions
In addition to this, the official guidance explains that it is ‘calculated by adding up any Salary that was Paid to Senior Players; and then deducting: (a) any Excluded Salary Paid to Senior Players; and (b) a sum equal to the value of the Senior Salary Credits that a Club is entitled to’.
The Cap is also reviewed each year, but in 2019 and 2020 it saw major changes to make it more stringent, transparent and to make it put more financial accountability on clubs and players. This was in the wake of breaches of the Salary Cap by Saracens in 2019 that saw the club face huge points deductions, relegation from the top tier and unprecedented fines.
These punishments even came at a time where Saracens had some of the biggest names in rugby at the club, including Owen Farrell and Maro Itoje, which ultimately sent a message to other sides that any financial irregularities would not be tolerated.
Going into the 2020/21 season the Cap was set at £6.4m and for the 2021/22 season it was reduced again to £5m.
Key findings from the Salary Cap
Thankfully with the release of the 2020/21 findings – and aside from some transgressions with Leicester Tigers that have now been resolved – there aren’t any major issues. The report has proved more of a useful insight thus far, with some key findings according to Sky Sports being:
- The average senior player’s total salary being £171,187.
- Fly-half remains the most lucrative position.
- The average salary of a fly-half in the Premiership is £175,679 with centre (£167,779) and lock (£158,617) making up the top three best-paid positions.
- Scrum-halves (£117,912) and hookers (£113,115) earn the least.
- Players who have made over 100 appearances in the Premiership earn on average £205,000.
Why is the Cap useful?
So beyond reducing the financial burden on clubs and helping to create a more level playing field (as shown by the recent lack of serious breaches) other positives of having the Salary Cap include:
- It helps make the league more competitive.
- It encourages the development of youth players.
- It stops clubs buying up too much talent.
- Wealthier teams cannot build up a monopoly on the league.
What happens now?
We can expect to see the Cap continuing until at least 2024 and given its successes thus far, it’s likely to stay beyond this timeframe, possibly growing or shrinking from the £5m we have in place now.
Whether or not its influence spreads into other major sports like football remains to be seen. There are many arguments for and against its use, but in football in particular it would prove to be especially hard to police and monitor a Salary Cap. At the same time, rolling it out into sporting governing bodies with systems already in place (such as football’s Financial Fair Play) would also take a long time to create, approve and put into practice.