23 May 13
• Competitiveness of the league: the Salary Cap provides equal opportunity for clubs, so creating a highly competitive and unpredictable Aviva Premiership Rugby competition where on any weekend any team can beat any other team. It ensures the competition is exciting and unpredictable which attracts fans, sponsors and broadcasters.
• Financial sustainability: the Salary Cap helps ensure that the clubs build their businesses in a sustainable way.
The first salary cap was introduced by Premiership Rugby in July 1999 as a result of concerns over the financial sustainability of Clubs in the league. The first cap was set at £1.8m. The Salary Cap increased to £4m in July 2008 and at the start of 2011/12 Academy Credits were introduced. These Credits allow clubs to benefit from including home-grown Academy talent in their senior squads. For qualifying players, clubs get a credit in the Salary Cap of £30,000 per player for up to eight players (maximum £240,000).
The Academy Credit system aims to:
• Reward the Clubs for the quality of players coming through the Academies
• Assist the Clubs to retain their best young players
• Give developing players early opportunities for Aviva Premiership Rugby
Premiership Rugby has decided on the development of the Salary Cap up to the 2014-15 Season with the aim of:
• Strengthening the depth of playing squads
• Enhancing the ability of the clubs to retain the best English players
• Attracting some of the world's best players to Aviva Premiership Rugby
• Building the clubs' businesses in a sustainable way
• Protecting the competitive balance and unpredictability of the competition
In the 2012-13 Season, the base Salary Cap will increase to £4.26m, rising to a maximum of £4.5m with the continuation of the Academy Credits. In addition to this, a Club may choose to nominate to Premiership Rugby one qualifying player to be excluded from the Salary Cap. This will provide the Clubs with further capacity to retain our world-class England talent as well as attract a limited number of foreign players. At the same time, the Clubs' success in playing a high number of EQP (English Qualified Players) can be maintained and the balance of the competition can be protected.
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 atleast 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.
The name of the Excluded Player shall be kept confidential.
The level of the base Salary Cap during the 2013-14 and 2014-15 Salary Cap years will be linked directly to annual central revenue distributions to the Clubs from Premiership Rugby. This is designed to promote the sustainable financial position of Aviva Premiership Rugby and its Clubs. Growth in salaries will be linked to growth in average revenues. This will provide a natural check on the financial capacity of the Clubs to spend on playing talent, and as the collective business of Aviva Premiership Rugby develops further, there will be equal opportunity for all Clubs.
All Clubs are subject to the Regulations and each Club agrees to be bound by and comply with the Regulations. The responsibility to fulfil the obligations set out in the Regulations rests with the Chief Executive Officer of each Club.
The operation of the Salary Cap is policed by Premiership Rugby's Salary Cap Manager, with the assistance of external legal advisors and accountants. The process involves:
• Monitoring and investigating club and player activity including new signings, transfers and agreements with connected parties and/or third parties
• Overseeing the annual audit process and investigating any areas of non-compliance
• Leading an annual review of the operation of the Salary Cap and presenting any conclusions and/or recommendations going forward
Premiership Rugby Clubs are subject to on-going monitoring and a formal annual audit of their financial arrangements. Any breach of the Salary Cap carries serious financial and other penalties for clubs.