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Premiership Rugby statement – Salary Framework

Following today’s Board meeting, Premiership Rugby is announcing developments to the Salary Framework for the 2016-17 and 2017-18 seasons.

At a time when English rugby needs success, the Clubs have focussed on developments aimed at further enhancing Aviva Premiership Rugby's position as the most competitive league in world rugby and at improving the Clubs' challenge for European Rugby Champions Cup and Challenge Cup success. In doing so, such developments will support the England team, particularly as the Clubs are achieving a record high 72% of all players in Premiership and European match day squads being qualified to play for England. 

"The Clubs intend to ensure that the English game thrives at club and country level and that we achieve domestic, European and International success,” said Premiership Rugby's Chief Executive, Mark McCafferty.

"The financial performance of Premiership Rugby and its Clubs, including new commercial contracts with key partners, has helped facilitate plans for the further strengthening of playing squads, including the continued investment in the growth of English talent. This investment is intended to help drive the next phase of growth in English club and international rugby."

Key elements:

  • The Base levels will be £6.5m in 2016/17 and £7m in 2017/18 (2015/16 – £5.5m);

 

  • The Base levels will include increased Home Grown Player Credits* up to a maximum of £500k in 2016/17 and maximum £600k in 2017/18 to incentivise further the long-term development of talent through the Academies;

 

  • In addition to the Base levels, Injury Dispensations* up to a maximum of £400k per season continue to be available to each Club;

 

  • Each Club can continue to have a maximum of two Excluded Players *, with one being new to Premiership Rugby or not having played in Premiership Rugby for at least 12 months;

 

  • A new England Senior EPS or International Player Credit* in addition to the Base level to facilitate squad strengthening, particularly cover for player absence during international periods;

 

  • There will be a new overrun tax on any Salary spend up to five per cent over the Base level (5 per cent being £325k in 2016-17 and £350k in 2017-18),

         
As is the case with other professional team sports, any form of financial regulation must remain under review and continue to evolve in order to ensure it meets its objectives, including protecting the long term financial sustainability of the Clubs and the competitions' competitive balance. The developments announced today intend to support the achievement of those objectives.
 
Over the last few months, there has been speculation, much of it significantly inaccurate, concerning investigations into Clubs. During that time, Premiership Rugby has not commented in view of the confidentiality obligations in the Regulations.
 
It is important to clarify that investigations into potential issues concerning Clubs' annual spend happen regularly as part of the Certification and annual audit of each Club. The Salary Cap Manager addresses these issues with the Clubs as part of the ongoing work to support the operational management of the system. Confidentiality, therefore, remains appropriate and necessary.
 
Premiership Rugby can confirm that certain issues were pursued last season with some Clubs relating to access to information and to commercial contracts where there were differences of opinion as to the correct inclusion or not in the Salary Cap spend. The issues were not straightforward and were subject to differing legal opinion and consequent risk as to any judgment on the correct interpretation. Premiership Rugby and the Clubs have now resolved the issues identified and have entered into appropriate confidential settlements. 

"It's important to stress that not only have there been no breaches but we regret that over the past six to nine months supporters have not had clarity during this time when it comes to certain issues being looked at on the Salary Cap," said Premiership Rugby's Chief Executive, Mark McCafferty.

"Confidentiality clauses in the Regulations prevented us from commenting until now."
 
With the Clubs having reached agreement on the level, formulation and management of the Salary Framework through until 2018, Premiership Rugby believes this will play an important role in underpinning the objectives of financial sustainability for all Clubs, a competitive and unpredictable Aviva Premiership Rugby competition and European success. 

ends

Notes

Definitions:
Home Grown Player Credit
A Club shall be entitled to up to £500,000 worth of credits for players (£50,000 per Home Grown Player) who have graduated from the Club's Academy. A qualifying player:

  • Must have joined the Club before his 18th birthday; and
  • Earns more than £30,000.

Senior EPS/International Player Credit
Where a club is unable to select a player in its squad for a Premiership Rugby or European fixture as a result of that player being selected in a match day squad by his national union or are absent under the terms of the Heads of Agreement. There shall be a total allowance up to £80,000 per player depending on meeting certain qualification and selection criteria.

Injury Dispensations
Where a player is injured for 12 weeks or more the Club may apply to the Salary Cap Manager to recruit a replacement player. The replacement player will then be permitted to remain with the Club for the rest of the season. The replacement player's salary for the duration of the dispensation shall sit in a separate £400,000 cap containing the Club's other injury replacements. The Club may not exceed the £400,000 during the salary cap year. In the event that a player is injured and that injury crosses over two Salary Cap years the injured player must be injured for at least the first eight weeks at the start of the year, counted from 1 August.

The application must be made while the player is still injured and the replacement player must be:

  • The same position as the injured player; not be deemed to be more experienced than the injured player (i.e. same or less);
  • Given a salary which is either comparable or lower than the injured player.

When determining these factors the Salary Cap Manager shall consider the general state of the market for availability of players in that position, the timing of when the cover is required, and any other relevant factors.

**Excluded Players
1. A Club may nominate to the Salary Cap Manager up to two Players to be excluded from their Salary Cap calculations. A Club shall be entitled to nominate a Player as an Excluded Player who:
(i) has been a Player of the Club for at least two full Salary Cap Years prior to the Salary Cap Year in which he is nominated as the Excluded Player; or
(ii) has not been a Player of any Aviva Premiership Club during the previous Salary Cap; or
(iii) has been a Player (but not an Excluded Player) for the Club in the previous Salary Cap Year and was not a Player for any other Club for at least one Salary Cap Year immediately prior to joining the Club.
2. A Club shall only be entitled to nominate a Player as a second Excluded Player who:
(i) has not been a Player of any Club during the previous Salary Cap Year; or
(ii) was that Club's second Excluded Player in the previous Salary Cap Year.

Certification
Each year each club has agreed to provide full salary information of every player which is approved by the club Chairman, Chief Executive and Finance Director. This information is then verified by the Salary Cap Manager and his team of auditors.

 

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