Andy Goode: Premiership salary cap must be slashed
Coronavirus has laid bare just how fragile rugby’s finances are and the Premiership’s salary cap is going to have to be reduced as a result.
It’s an unprecedented situation and talks of pay cuts and furloughing will of course help some clubs stay afloat in the short term but it’s become apparent that the financial equation just doesn’t add up and the current level of spending on salaries isn’t sustainable.
It feels bad saying it because players haven’t done anything wrong and I’m all for players earning as much as possible but only if the game is prospering and financial sustainability is assured. That simply isn’t the case at the moment.
Whether it was as a result of projected commercial income that hasn’t materialised or perhaps even partially boosted by the hype around hosting the World Cup, the Premiership salary cap shot up from £5.1 million in 2015/16 to £7 million a couple of years later.
I think the cap has to be reduced back down to much nearer the level it was at five years ago now, to maybe £5.5 million, and players should also be playing fewer games for welfare reasons.
If you reduce the number of games in the season by cutting out the Premiership Cup, among other changes, clubs would be able to cut their squad sizes and some players’ pay cuts probably wouldn’t have to be as big as it may initially seem when you propose the overall figure being reduced by £1.5 million.
A couple of marquee players sit outside of that cap as well and there are obviously pages of fine print that come with it, as highlighted by the Saracens salary cap saga which almost seems like a lifetime ago now.
Saracens have driven some of the recent wage inflation through their breaches of the cap and other clubs have tried to keep pace in order to compete with their success but clubs clearly can’t thrive while spending as much as they currently do on wages.
Salaries have almost doubled over the past five years or so and clubs’ revenue hasn’t even come close to keeping pace with that. As a result, the Premiership clubs lost getting on for £50 million collectively in the last financial year we have all the numbers for.
Gloucester did report a £5.3 million pre-tax profit last week but that was because a lot of the £12.8 million CVC windfall was included on the balance sheet. They would’ve made a loss similar to the previous year if it hadn’t been.
The injection of cash from CVC was clearly much needed but I think some people feel like a better deal could’ve been achieved if the clubs weren’t so in need of funds and fast. Plus, those funds are intended to improve infrastructure and the like, not inflate wages further.
It should also be noted that the increase in the salary cap has squeezed out the middle guys really. There aren’t too many £100,000 players any more, most are either earning significantly more or are at the lower end of the spectrum.
I think if we reduce the number of games being played and therefore the number of players in each squad, there may be a bit less of a gulf between the top and bottom earners too and some players might even benefit from that.
From what you hear, a 25% pay cut may end up being imposed in the short term whether players like it or not and a legal challenge could follow at a later date but I think a more permanent change is coming as well.
How that is implemented will be fraught with problems because some players have several years to run on their current contracts so whether they can be renegotiated remains to be seen.
Alternatively, clubs might have to pay some players off and there be an amnesty where that doesn’t count against the cap in order to redress the financial imbalance.
As a player, I always took the biggest deal on the table and no part of me begrudges players earning whatever they’re offered but I just think unfortunately some may be forced to take cuts to ensure that clubs survive and we still have a professional sport in a few years.
A lot of players understandably aren’t happy at the prospect of accepting a 25% pay cut in the short term so they’re certainly not going to be happy if it becomes a reality in the longer term but if the clubs were spending 25% less on wages, there’s no doubt the game would be more financially sustainable.
We knew the current financial model at the top of the English game wasn’t sustainable anyway with clubs generally reliant on one benefactor, who could leave at any time, but this current global crisis has highlighted just how dire the situation is.
The last thing we want to see is some sort of wage war between players and clubs so hopefully that doesn’t materialise but the reality is that players have had it very good in recent years and I think a change is necessary and is on its way.
Comments on RugbyPass
I do not really get why put Ollivon at 6 when he’s a 7, while Cros was the best Frenchman of the tournament, playing at…6. His only game replacing Aldritt at 8 doesn’t change much in terms of his impact. Lamaro was also outstanding in that brilliant Italian side, probably better than Reffell. So putting 2 Welsh players from the wooden spoon holders, and none of the 4th nation (Scotland) is also strange. Is it about showing that in this harsh transition Wales is, there were some standouts…?
6 Go to commentsThe events at this year’s six nations should undermine many of the arguments made against promotion and relegation between the six nations and the REC. If Italy had been allowed to yo-yo between divisions it conceivably could have really hurt their development, but if Italy, Wales, and Scotland are all at risk of relegation, with none of them being relegated more often than once every 3 or 4 years, you’d have to back all of them to muddle on through it, especially when you factor in the likelihood they’ll still be guaranteed world league matches against tier 1 opponents. Another way of looking at italys resurgence would be to say that the development model of adding an extra team to the six nations has worked, and now must be done again. Georgia could join to make it a 7 team round robin, and if and when Georgia demonstrate an ability to consistently win games, Portugal can also be added to make it an 8 team 2 conference competition. Frankly at this point I think it falls to world rugby to demand that the 6N act in the interests of the game. If the 6N won’t commit to expansion then the 6N teams should be handicapped in world cup draws (i.e. world cup seedings would not be based on their ranking points, but on their ranking points minus a 5 point penalty).
5 Go to commentsSteve Borthwick deserves credit for releasing the shackles on his England side and letting them play in a manner that somewhat resembles the top sides in the Gallagher Premiership. Will they revert to type in New Zealand in July.?
27 Go to commentsJames Lowe wouldn't get in any other 6N team. He's a great example of Farrell’s brilliance, and the Irish system. He is slow. His footwork is poor. But he fits perfectly in that Irish system, and has a superb impact. But put him in another team, and he'll look bang average.
6 Go to commentsCrusaders reached their heights through recruitment of North Island players, often leaving those NI teams bereft of key players. Example: Scott Barrett and Sam Whitelock robbed the Canes of their lineout and AB locks. For years the Canes have struggled at lock. This rabid recruitment was iniated by rule changes by a Crusader dominated NZR Head Office. Now this aggressive recruitment has back-fired, going after young inside back Hamilton Boys stars. They now have 4 Chiefs region 10s and not one with the requisite experience at Super level. Problems of their own making!
2 Go to commentsOver rated for a long time…exposed at scrum time too.
3 Go to comments“Firing me” should have been Gatland’s answer.
2 Go to commentsFinn Russell logic: “World” = 4 countries. Ireland may be at or near the top. FR’s bigger concern should be he and his fellow Scots (incl. the Bloemfontein ones) sliding back down to below top 10
42 Go to commentsMind games have begun. Ireland learned their lesson after saying they could beat England with 13 players or whatever. Still, if they win at Loftus, that would be impressive - final frontier etc.
58 Go to comments$950k for a Prop that isn’t fit enough to play 10 mins of rugby? Surely there is someone better to replace Big Mike with
3 Go to commentsFour Kiwis in that backline. A solid statement on the lack of invention, risk-taking and joy in the NH game; game of attrition and head- banging tedium. Longterm medical problems aplenty in the future!
6 Go to commentsGood article, I learnt quite a lot. A big sliding door moment was in the mid 00s when they rejected Steve Anderson's long term transformation and he wrote Ireland's strategy instead.
2 Go to commentsHi Dr Nick! I'm worried that I've started to enjoy watching England and have actually wanted them to win their last two games. What would you prescribe? On a more serious note, I've noticed that the standard of play in March is often better than early February. Do you think this is because of the weather or because the players have been together for longer?
27 Go to commentsMy question in all this brett is who is going to wear the consequences of these actions? Surely just getting the sack isn’t sufficient? A teenager working the till at woolies would probably get taken to court if they took $20 out of the till. You mean to tell me that someone can spend $2.6 million and get away with it? Where was it spent? What companies/people were the beneficiaries etc? How is it just being talked about as an ‘oopsie’ and we all just move on and not a matter of the court for gross negligence, fraud, take your pick…
20 Go to commentslove Manu too but England have relied on him coming back from injury for far too long and not sorted the position with someone else long term . It will be a blessing he has gone . Huge shame he was so injury prone . God speed Manu .
3 Go to commentsI agree with Ben Smith about Brett Cameron. The No. 6 position has to be a monster and a genuine lineout option, like Ollivon, Lawes (now Chessum), Du Toit, etc. The only player who fits that bill right now is Scott Barrett. A fit and fizzing Tuipolotu together with one of the young towers, Sam Darry or Josh Lord, would give Razor the freedom to play Barret at 6.
16 Go to commentsOutstanding article, Graham. Agree with all of it. And enjoy the style of writing too (particularly Grand Slap!).
3 Go to commentsI wouldn't pay a cent for that loafer. He just stands around, waiting for play to come his way. He won't make the Wallabies.
3 Go to commentsGood bit of te reo maori Nic. Or is that Niko or Nikora? On the theme of trees the Oaks v Totara. Game plan would be key. I have one but it would cost you.
27 Go to comments> Shaun Edwards’ You should not have to score 30 points to win a game, as exciting as it is. This statement was surprising to me. It is nonsensical .I guess it is a defence coach speaking. But head coach, defence and attacking coaches all work together. They are inseparable. You score more than the opposition to win. It only needs to be one score. You score whatever the game demands, whatever the opposition demand. You defend whatever it takes. The attack coach needs to be able to clock up 30pts if need be.
27 Go to comments