Top-flight clubs start moves to scrap marquee signings rule
Change would mean £7m salary cap is fully enforced Shutdown forcing drastic cost-cutting measures
Premiership Rugby clubs are moving towards removing marquee player signings from the salary cap in a desperate attempt to reduce costs.
Even before the coronavirus pandemic, Exeter were the only club in the league turning a profit, with player wages accounting for the vast majority of outgoings.
The effect of the lockdown has magnified the financial crisis many clubs were facing, leading to a range of costcutting measures, from salary reductions to staff being placed on furlough.
There is a widespread acceptance that the Premiership’s longer-term financial model is broken. The current salary cap is set at £7million, with the salaries of two marquee players excluded from the limit. The marquee player rule was introduced to allow clubs to bring the best foreign talent to the Premiership, however one chief executive told Sunday Telegraph that the main result has been to drive wage inflation across the rest of the squad.
“We are looking at the costs of the business and by far the biggest cost is the players’ salaries,” the executive said. “From our point of view, the feeling is that marquee players have driven up players’ salaries to the point that it has become unsustainable.
“If you look at what has driven the salaries up over the last couple of years, if you are playing next to a guy who is earning twice as much as you then inevitably when you come to renew your contract then you are going to say, ‘I might not get what he’s on but I certainly want more than I am currently on’.” While The Telegraph understands that there has not yet been a vote at Premiership board level, removing marquee signings is widely seen as the most efficient way of controlling spiralling costs.
The marquee player rule was introduced for the 2012-13 season and then expanded to two players for the 2015-16 season. The concept was based on clubs growing both television audiences and match-day attendances by luring foreign talent such as Bristol’s recent signings, Charles Piutau and Semi Radradra.
However, most clubs are now using the marquee signing rule to offset the wages of their England internationals. For example, fly-half Owen Farrell’s estimated £750,000 deal does not count towards Saracens’ salary cap. The club executive said: “I know the reasons why it was brought in, because you wanted some stardust in the league, but we are not in that situation anymore. If you are looking at how you make the game sustainable, then removing marquee players from the salary cap is a way of doing that.” Any move to alter the salary cap has been described as “hugely difficult”. Most clubs have already spent up to the salary cap for next season and existing contracts are protected by employment law.
Reducing players’ wages can only take place with their approval. While most squads have accepted a pay reduction in the short-term since the coronavirus pandemic hit, the militancy displayed by Leicester players demonstrates that this would be much harder to implement permanently.
The publication of Lord Myners’s review of the salary cap is due in this quarter of the year. What started off as a result of Saracens’ repeated breaches of the cap has taken on a very different nature since the lockdown effectively halted clubs’ incomes. Any changes are likely to be phased in over a number of years, which may not be enough to stave off the possibility of financial oblivion for some clubs.
In that scenario, players may have to accept permanent wage reductions or face the prospect of having no wages at all if a club go to the wall.