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 in 1999 they introduced their Salary Cap in order:

  • To ensure the financial viability of all Clubs and of the Aviva Premiership Rugby competition;
  • control inflationary pressures on Clubs' costs;
  • provide a level playing field for Clubs; and
  • ensure a competitive Aviva Premiership Rugby competition.

These objectives are borne out in the financial success the league which is now seeing with more clubs breaking even, a healthy turnover of teams at the top of the league with three different winners in as many years. Aviva Premiership Rugby is the most competitive league in world rugby (highest number of games finishing in less than one score compared to any other rugby competition in the world). Having a compelling and unpredictable Aviva Premiership Rugby competition is at the centre of Premiership Rugby's strategic objectives and is a crucial factor in securing a new broadcaster, BT, and seeing the renewal of its title sponsor, Aviva.

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 2013/14 is £4.26m, plus one excluded player whose salary sits outside the cap, enabling Clubs to recruit and retain world class talent. Clubs are also encouraged to develop home grown talent by accessing up to eight £30,000 Academy Credits (£240,000), 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. There is also an Academy Salary Cap of £200,000, meaning the total available to clubs is £4.7m (plus the excluded player and injury replacement provisions), a significant increase from the original £1.2m in 1999.

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.

2013 /14 Salary Cap

In the 2013-14 Season the total Salary Cap comprises of:

  • £4.26 million - Senior Salary Cap
  • £240,000 - Academy Credits * see definition below
  • 1 Excluded Player (Salary is not included in the Salary Cap)
  • Injury Replacement *** see notes below

Clubs can also benefit from the £200,000 Academy Cap which supports the development and retention of home grown talent at each Club. ** see definition below.


2014 /15 Salary Cap

Each season's Salary Cap will be officially announced in January previous to the start of that season therefore the 2014/15 Salary Cap was announced on 21 January 2014 confirming the following:

  • £4.76 million - Senior Salary Cap
  • £240,000 - Academy Credits * see definition below
  • 1 Excluded Player (Salary is not included in the Salary Cap)
  • Injury Replacement *** see notes below

Clubs can also benefit from the £200,000 Academy Cap which supports the development and retention of home grown talent at each Club. ** see definition below.

Definitions

Excluded Player

A Club may nominate to the Salary Cap Manager one Player to be excluded from their Salary Cap calculations. A Club shall only 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) was selected and included in a national playing squad of any country participating in the RWC2011.

*Academy Credits: A Club shall be entitled to up to eight £30,000 credits for players who have graduated from the Club's Academy (total credit value of £240,000). A qualifying player:

• must have joined the Club before his 18th birthday;
• is still under the age of 24 at the start of the Season; and
• earns more than £30,000.

These credits only apply to the Senior Ceiling. For example, if a qualifying player earns £35,000, only £5,000 would be counted in the Club's Salary Cap calculations.

**Academy Cap: The Academy Cap of £200,000 is for all Academy Players under the age of 24 years old and earning less than £30,000 Salary. Note: A Player's Salary Cap status is irrelevant in relation to dual registration.

***Injury Replacements: 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.

How does the Premiership Rugby Salary Cap work?

It is all about the transfer of value from the Club to a Player during each salary cap year (1 July - 30 June). It is the combined "salaries" of all Players at the Club. There is no restriction upon an individual's Salary but on the whole squad spend.

When looking at a Player for Salary Cap purposes we include a broad web of connections such as family members (e.g. spouse, child, parents), the Player's Agent, any relevant company, trust or organisation, and so on.

When looking at a Club for Salary Cap purposes we include a broad web of connections such as any Director, officer or employee (excluding Players) of that Club; any family member/spouse/partner of any Director, officer or employee (excluding Players) of that Club; a shareholder; a sponsor; any company, trust, partnership, or other body, organisation, and so on.

What goes in?

Amounts which are paid or payable (or in the case of a benefit in kind, provided or to be provided) directly or indirectly, onshore or offshore, by or on behalf of a Club or any Connected Party or Third Party of the Club, to or in respect of a Player or any Connected Party of the Player.

Amounts that are included

  • Salary, wage, fee, remuneration etc.
  • Bonus (match, win, year-end etc.)
  • National insurance
  • Loan (not paid back in full before end of SCY loan was made).
  • Child support / maintenance /school fees
  • Accommodation or holiday cost
  • Pension (incl. annuities)
  • Image Rights payments Payment in connection with promotional, media or endorsement work
  • Payment for off-field activities for or on behalf of club
  • Signing on fee, transfer payment, relocation allowance or payment linked to transfer
  • Accommodation, holidays, cars, match tickets (other than 4 per match), clothing (other than training kit, official club blazers and other club wear), travel, membership fees, food and drink (other than at matches and training)
  • Payment in kind a player would not have received were it not for his involvement with a Club
  • Redundancy/Compromise etc.
  • Agent Fees plus VAT & NI

Amounts that are excluded

  • International match fees, bonuses, etc.
  • Legitimate and reasonable expenses
  • Player's personal private medical insurance including Rugby Care scheme
  • Benefit Year (testimonial)
  • Education fees (e.g. university tuition fees, joinery course fees etc.) for the player
  • A season long Loan Player x 3 players
  • A player who is Injured for the entire season

How is it managed?

The Salary Cap Manager is responsible for the management of the Salary Cap in the following ways:

On-going monitoring and investigations

Throughout the year every Premiership Rugby Club is required to submit to the Salary Cap Manager within 28 days of signing full copies of all Contracts and arrangements for playing (employment) and non-playing (e.g. image rights) services. All documents relating to Loans and copies of any Contracts/written documents evidencing payments to Player Agents are provided. These submissions are reviewed on an on-going basis and the Salary Cap Manager has the ability to investigate any arrangement between a Player and a Club. Player interviews are carried out on a regular basis to support the management of the Salary Cap. There is also a formal whistle blowing policy where people can speak to the Salary Cap Manager on a confidential basis, by emailing salarycap@premiershiprugby.com or calling 07583 826343.

Annual Audit

In September each season every Premiership Rugby Club will provide the Salary Cap Manager with a Certification setting out their spend during the previous Salary Cap Year together with a Declaration (forecast) for their expected spend during the current Salary Cap Year. Both of these documents are approved by a Club's Board and signed off by the Chairman, Chief Executive and Finance Director. The Salary Cap Manager will review these documents and then submit them to the independent auditors who will then (during October and November) audit each Club in accordance with the Salary Cap Regulations.

Investigatory Audit

In addition to the Annual Audit the Salary Cap Manager may now undertake an Investigatory Audit which can involve using independent experts to access relevant records held by a club who are suspected of breaching the regulations.

Potential Breaches

All Clubs are subject to the Regulations and each Club agrees to be bound by and comply with the Regulations. In respect of each Salary Cap Year, the issue of whether or not any breach has occurred and the potential consequences of such breach are determined by reference to the Regulations of that year and any Board resolutions. The Salary Cap Year runs from 1 July to 30 June. The responsibility to fulfil the obligations set out in the Regulations rests with the Chief Executive of each Club. The Salary Cap Manager will have up to five years to initiate action against a Club for any alleged breach of a regulation. By way of illustration, if an alleged breach relates to the Salary Cap Year 2008-09 it must be notified to the relevant club as an alleged breach by no later than 30 June 2014.

If a Club were to exceed the Senior Ceiling or submits a False Declaration the Salary Cap Manager would charge the Club with breaching the regulations and an independent panel would be convened to hear the case. The hearing would be much like any discipline process undertaken by sports governing bodies. The sanctions for any breach of the Senior Ceiling includes both financial and competition point penalties.

A False Declaration would arise if a Club flagrantly, recklessly or deliberately submitted false and/or misleading Salary information to the Salary Cap Manager. In this instance the Salary Cap Manager would charge the Club with submitting a False Declaration and an independent panel would be convened to hear the case.

There could also be administrative breaches where the Salary Cap Manager can issue a fixed fine of up to £800 for each administrative offence which includes failure to submit documents on time (e.g. the late submission of a player's contract).

The RFU's Agent Regulations also provide for the involvement of an agent in any alleged breach of the Senior Ceiling or False Declaration which could result in the agent losing his registration with the RFU.

Salary Cap Regulations

Please click here to download the Salary Cap Regulations PDF

Share this page

Aviva Premiership Rugby

  • Latest News
  • Match Reports
  • Twitter
  • Facebook
Galleries
© 2014 Content © Premier Rugby, Statistical Data © SFMS Privacy & Cookies delivered by Sotic powered by OpenText WSM