Salary Cap

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, French Rugby Union's Top 14, and the Welsh Regions in rugby union, all demonstrate how European sport has recently grasped the importance of controlling costs and long-term financial sustainability.

As a collective, Premiership Rugby and its clubs led the way in England when they introduced their Salary Cap in 1999 in order to ensure the financial viability of all clubs and the Aviva Premiership Rugby competition, 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 more clubs breaking even and a healthy turnover of teams at the top of the league with four different Aviva Premiership Rugby Champions in five years.

The level of the Salary Cap and the operation and management of it is reviewed regularly to ensure it is fit for purpose. The Premiership Rugby Board, made up of the 12 Clubs, determines the Regulations and has a Salary Cap Manager, whose role is to monitor and investigate player recruitment and remuneration across the Clubs, to ensure the system is managed in a fair and reasonable manner.

The level of the Salary Cap is proportionate and aligned to the growth of the business and is linked directly to the annual net central distributions to the clubs from Premiership Rugby.

The current level of the Salary Cap for 2016-17 is £6.5m, plus 2 Excluded Players whose salaries sit outside the cap, enabling clubs to recruit and retain world class talent. Within the £6.5 million salary cap sealing, clubs are encouraged to develop home grown talent by accessing up to £500,000 of Home Grown Player Credits. Also, they can provide an unlimited education (academic or vocational) fund to their players, and can replace long-term injured players without impacting on their Salary Cap ceiling.

Injury Dispensations up to a maximum of £400,000 per season continue to be available to each Club, a new England Senior EPS or International Player Credit of up to £80,000 per player has been introduced to cover for player absence during international periods and there is a new overrun tax on any Salary spend of up to 5% over the Base level (5% being £325,000 in 2016-17).

Matches in the Aviva Premiership Rugby competition get more compelling and competitive every year and the Salary Cap is fundamental to the long-term success of this competition and the clubs who play in it, from both a financial and competitive perspective. This responsible financial management helps support investments made by shareholders, players and fans in building a bright future for the Aviva Premiership Rugby competition and its clubs.

Please click here to download a full copy of the Premiership Rugby Salary Cap Regulations 2016-17.

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