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Don't blame the salary cap - why Premiership must start building instead of buying players

On the same week that Nigel Wray’s South African partners pulled out of Saracens due to the club’s ongoing financial losses, comments from Wasps director of rugby Dai Young that the “salary cap is an issue” could not have come at a worse time.

Speaking to ESPN.co.uk, Young brought up several issues with the cap, including that its recent increases were not allowing teams to contract more players, as top-tier internationals demanded more money as a result, squads across the competition were getting smaller in response and that if they weren’t prepared to pay their players market value, then “11 other clubs would”.

He also stated that “the Welsh and Irish players will get more rest and the Leinster side that beat Sarries will probably play together eight or nine times this season.”

It’s an interesting statement, especially when you factor in that many Guinness PRO14 sides, pretty much all those not among the Irish provinces, will operate on significantly smaller budgets than those of their Premiership rivals, yet they still have the depth to rotate and rest players.

Young has hit the nail on the head, though, in his assertion that the market value of top-tier internationals has increased rapidly in recent years, but what drives that is a recruitment-heavy market, something which Wasps have contributed to significantly over the last few years. An example of this would be one fringe international who was, this season, touted around Premiership clubs for a salary of £450k. That equates to roughly 15 senior academy contracts. That’s a trade-off which doesn’t make a whole lot of sense.

Wasps are on their third set of academy coaching staff since Young arrived and the pathway from their junior academy to the first team has been barely trod by up-and-coming players. Since the quartet of Christian Wade, Elliot Daly, Billy Vunipola and Sam Jones burst on to the scene, the pickings have been slim for Wasps, with perhaps the two most prominent graduates being the Willis brothers, Jack and Tom, who have made the most of the injuries that have afflicted the club this season.

If you are not going to push through youngsters, allow them to train with the seniors and give them that opportunity, then there is no doubt you’re going to have a top-heavy squad, many of whom have been recruited on big money from other teams or countries.

The beauty of bringing through your own players and having them on senior academy contracts in your squad is that you can essentially write them off the salary cap, with the Premiership’s system of academy credits. This is something Saracens have had a lot of success with and other clubs, such as Gloucester and Exeter Chiefs, are also making effective use of. With increased funding and/or emerging talented crops of youngsters, it’s something which may well play an influential role in the fortunes of Sale Sharks, Leicester Tigers and Northampton Saints in the coming years, too.

The issue is not the salary cap, but how certain teams choose to play it.

Wasps have gone heavily down the recruit-first path and trimmed their squad size as a result, but they’re not alone in that regard. Bath have taken a similar journey and like Wasps, you see them struggle with their depth when injuries come knocking. In terms of the best 23s that those two sides can put out, irrespective of fitness, they are a match for anyone in Europe.

If that’s the approach you have decided to take, then fair enough, but it opens your club up to extraneous variables, like injury, potentially derailing your season. There are ways to approach a salary cap league and this is undoubtedly a risky way of doing it.

The whole purpose of a salary cap is to ensure the competition is as competitive as possible and this means that teams cannot hoard star players and lesser teams will be able to improve by acquiring higher calibre players who can’t fit in their current side’s cap. That does jar with some fans, who think it’s unfair that their club go to the effort of producing and developing a talented player to then see him join someone else, but this is the nature of a salary cap.

If you look at the NFL, the perennially competitive and effective teams are the masters of drafting new talent, evaluating it’s worth to the franchise and then opting either to pay them the big money themselves, or let them go test their value in free agency and potentially pick up a lucrative deal elsewhere.

Honestly, rugby clubs should be even more successful at doing that than NFL franchises.

Instead of working with a draft system, whereby it’s a lottery influenced by the ability of their scouts, rugby clubs operate an academy system and have unrivalled access to evaluate and improve the players they have coming through their pathway.

The senior academy at a Premiership rugby club should mirror the initial contracts that NFL rookies sign after they are drafted. This is the evaluation time.

You can identify who is vital to your club’s success and long-term vision and pay them accordingly, whilst others can be let go to teams who are willing to pay them more, or are more in need of their services. This group should be refreshed each year, with new players leaving school and graduating from the junior academy.

If you neglect that pathway, then you’re like an NFL team signing 90% of its talent through free agency. History shows us that this is not a particularly successful way of operating and often proves to be a very financially-costing mistake.

Even if you put the issue of trying to create a competitive tournament to one side for a moment, there are also very significant financial implications behind any movement to remove or expand the salary cap.

Of the 12 Premiership clubs, only Exeter recorded a profit during the last fiscal year, with Worcester Warriors showing the worst accounts in the competition, operating with a £4m loss.

Plenty of clubs are making strides to reduce their losses and become more sustainable, whether that’s through stadium expansion, playing games at bigger venues, increasing commercial opportunities or looking to expand in new markets, but it’s not something which will be solved overnight. This is why the salary cap has been set at the £7m mark for the foreseeable future.

The Premiership is believed to be on the verge of signing a new title sponsorship deal with US insurance giants Arthur J. Gallagher & Co., whilst a new TV deal will need to be negotiated for the 2021/22 season and onwards, so there will be opportunities to re-evaluate that figure over the coming years, but keeping it at its current level is not a bad move, irrespective of whether or not a handful of owners are willing to underwrite losses in a search for glory.

The salary cap promotes a competitive league, production of homegrown talent, a smaller and more organic rise in wages and responsible fiscal management.

Why would you want to end that?

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Don't blame the salary cap - why Premiership must start building instead of buying players