The Premiership Rugby salary cap is one of the most controversial introductions to Premiership Rugby over the last few years. There is often a lot of misinformation on the exact details of the salary cap.
What is the Premiership Rugby Salary Cap? The current Premiership Rugby salary cap is £5 million for the 2022-23 season. This means teams cannot spend more than £5 million on the annual salaries of players, apart from a few different exceptions within the rule.
The Premiership Rugby salary cap is the maximum amount that each Premiership Rugby team is allowed to spend on player salaries and benefits. This is the total figure, meaning the total value of all player salaries and benefits in a single season must not exceed £5 million, the same rule for each Premiership Rugby team.
This salary cap does not just concern the basic wage that a player earns every month, it also looks at the different benefits that a player can earn. This can be through bonuses or image rights. It is currently set at £5 million and there are strict punishments if teams try to break the salary cap rules.
Why is there a salary cap In Premiership Rugby?
There are a few different reasons why Premiership Rugby introduced the salary cap.
1. To level the playing field and create more competition
The major reason why salary caps are also used in major sports leagues like the NFL and NBA is because it is designed to level the playing field. What you see in football is that it is usually the same teams at the very top, because they are the richest teams. Usually, the richer a football team is, the better they will be.
Rugby did not want to go this way and so they introduced a salary cap to try to level the playing field. By putting a cap on the amount of money players could earn, the wealth of a team owner would not have that big of an effect on team success, as the richest owner could not go out and sign the best players.
It is also in there to create more competition. By having every team have the same salary cap, each team should be similar in terms of the quality of their players. This should make games more competitive, ensuring that it is not the same teams winning every year and there is good, exciting competition within the league.
2. To help teams cut costs
One of the things the Premiership are concerned about is the increasing costs associated with rugby. It is becoming more and more important for rugby teams to cut down on their costs, particularly with the large amount of revenue lost due to the Covid-19 pandemic.
The salary cap is partly there to help teams cut down on their costs. Player salaries have been increasing for a little while and the cap means there is a limit to the amount that they can increase. In theory, this should help teams reduce costs and keep the league financially viable going forward, even though this has not always been the case.
3. Encourage academy development
Having a salary cap also encourages Premiership teams to invest in their academies. Bringing through academy talent is a lot cheaper than trying to sign players who are already in their prime. These academy graduates are usually on much cheaper contracts than international players or players already in their prime.
This is good for Premiership Rugby as they are looking to develop English talent. By investing more money into rugby academies, they can bring through more players who may play for England. This is one of the goals of Premiership Rugby and introducing a salary cap makes it less likely for them to sign international players.
With fewer international players, there will be more chances for young English players to come through the ranks. With Premiership Rugby always looking to develop English talent, the salary cap will help to give English academy players more chances, particularly with the exceptions for academy talent.
Part of the salary cap is having credits for homegrown players which means some of their salaries will not count towards the total salary cap, even more incentive for teams to use their academy players and try to develop their homegrown players.
What is the Salary Cap for a Super Rugby team?
Each Super Rugby team is allowed to spend no more than £3.2 million The most recent data available says that the salary cap for Super Rugby is Aus$5.5 million which is around £3.2 million. This means that every player could earn around Aus$125,000 if the money was shared out equally.
Rugby salary cap rules
The basic rule behind a salary cap in rugby is that a team cannot exceed the value of the salary cap, except for any exceptions to the rule stated. The major point is that teams should not be paying their players more than the salary cap in wages or benefits.
The benefits point is often forgotten and something that has gotten Premiership teams into trouble. Things like image rights are included in that salary cap figure and teams cannot exceed the figure by paying their player in other ways.
For example, team owners are not allowed to make investments into businesses owned by players in order to get around the salary cap, or pay players more than they should earn on image rights. Teams cannot try to find ways to get around the salary cap rules by paying players in other ways.
Teams must also not take advantage of the exceptions to the rule. There is a limit to the amount that can be excluded from the salary cap and this means that teams cannot try to get around the rules on homegrown players as well as superstars’ salaries being excluded from the total.
The other rule about the salary cap is that it runs from the 1st of July to the 30th of June, with Premiership teams needing to be completely open with the Premiership about their spending to make sure they’re spending below the salary cap.