‘Untold pressure’ has been put on players behind the scenes across the Gallagher Premiership this week, as clubs and agents raced to sign new contracts before a crucial salary cap deadline.
Premiership Rugby clubs voted last week to reduce the salary cap by £1.4million, bringing it down £5m for the 2021/22 season from £6.4 million. In that, a clause was created whereby only 75 per cent of ‘existing contracts’ would count towards that revised cap if a pay cut was agreed by June 18.
According to the new agreement: ‘For any existing contracts that continue into the 2021-22 salary year, and beyond, their cap cost will be counted at 75 per cent of their overall actual value, to sensibly manage the transition to new cap levels.’
The deadline for what would be considered an ‘existing contract’ was June 18th, 2020, leading to multiple clubs going into overdrive in an attempt to complete new contracts for their biggest name players to get them registered at just 75 per cent of their actual value for salary cap purposes. “Agents have had the busiest weeks of their lives,” one source within the industry told RugbyPass. “Some clubs have signed up double-digit numbers of player this week.”
Theoretically, any club could exceed the salary cap legally, if they had signed enough players prior to the June 18th deadline, just passed. A club could be paying non-excluded players as much as £6.6 million – £200,000 than the £6.4 million 2019-20 salary cap, and £1.6 million more than the new £5 million cap – provided their contracts were locked down before the deadline just passed.
A Premiership Rugby spokesperson told RugbyPass: “When the Premiership Rugby clubs voted unanimously to reduce the salary cap, following the significant financial impact of the Covid-19 pandemic, we needed to introduce measures to manage the transition from a senior ceiling of £6.4 million to £5 million.
“For any existing contracts that continue into the 2021-22 salary year, and beyond, their cap cost will be counted at 75% of their overall actual value. This ensures the transition to new cap levels is managed sensibly and will not adversely affect players with existing contracts.
“This provision was included to protect our players with existing contracts, and it would be wholly incorrect to describe it as a loophole. A full list of changes to the salary cap is published on our website – premiershiprugby.com.”
It means clubs, according to salary cap limits at least, can take in a near-identical player wage packet into 2020/21, provided that completed their business this week gone.
If the individual contracts are long enough, two to three seasons long, it could mean the real salary caps for each Premiership club is still significantly more than the official £5 million, which is due to expire and return to £6.4 million in 2024-25. While the majority of clubs want to pay the players less to make the game sustainable, having players registered at 75 per cent of their actual salary could prove strategically beneficial over the course of next two to three seasons as the sport recovers.
Against a background of increasing tension between Premiership players and their clubs, the June 18th date was also used by some clubs to pressure players into signing new reduced salary contracts. Emboldened by the Premiership Rugby’s recommendation of a 25 per cent pay cuts, many clubs asked players to sign long term contracts by the deadline or face less attractive salaries deals.
The Rugby Players Association (RPA) said last week that the June 18th deadline placed huge pressure on players: “The changes to the Salary Cap as announced on Wednesday [June 10th] and the arbitrary June 18th deadline for contracts to be “existing” were passed with no consultation of players. That has led to a significant number of our members faced with immediate contractual decisions to make about their long-term futures in order to facilitate this change for the clubs.”
“This approach exposes the lack of governance within the Premiership, as recently highlighted by Lord Myners’ independent review.”
The RPA’s Damian Hopley told RugbyPass this weekend in a statement that: “The RPA have raised significant concerns about the artificially manufactured deadline day that players had to sign by last week, announced publicly just one week before the deadline.
“This put untold pressure on players to agree new contracts in a matter of a few days. We do not consider this to be reasonable and appropriate employment practise and a number of players and their representatives have voiced their disquiet about how this has played out over such a short period of time.”
The RPA however say they “look forward to consultation with PRL on these regulations to safeguard robust governance around the Cap.”
One club offered players a tiered salary cut over three years, with 15 per cent the first year, 20 per cent the second and 25 per cent for the third, while tabling an alternative of a four year contract at an unchanging, reduced rate. The majority of players, eager for stability, understandably took the four-year option.
Another club have agreed a 12.5 per cent, one year pay cut for all playing staff, although there was significant push back against the cuts from some of team’s senior player group, including seasoned internationals.
At least two Premiership clubs are honouring all current player contracts.
Many players feel they have no option but to toe the line in negotiations with their cash strapped employers.
Lord Myner, who conducted the salary cap review that lead to the agreement to drop the cap to £5 million a season , said any strike action would be ‘foolhardy’. “It would be foolhardy for the players to feel they’ve been pushed into a situation where they have to strike. If you’re an owner wondering how much longer you want to go on writing annual cheques, nothing’s more likely to tip you over the line than being exposed to industrial action.”
Meanwhile, Ellis Genge’s fledgling players’ union alternative, the Rugby Players Epoch (RPE), appears to have admitted defeat, for now at least. Genge, speaking on House of Rugby this week said: “In two years’ time, if boys turn around and say, ‘F****** hell, they took 25 per cent of our wages and we couldn’t do anything about it,’ it will be a case of ‘you could have (done), you just didn’t want to’. Well, 128 people did and the rest of them didn’t,” Genge told the House of Rugby podcast.
“(RPE) is not happening at the moment. If we find an opportunity to kick-start it again, then we will. For the time being, it’s a case of (players) dealing with their club independently.”
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