SA rugby teams divided on salary cap
The issue has provoked the odd verbal jab between the franchises
● SA’s four United Rugby Championship (URC) franchises have differing views on the salary cap they are supposed to uphold but a divide between the haves and have nots is also starting to emerge.
The salary cap which was agreed upon in 2019 has increased incrementally but the Bulls and the Sharks believe it needs to be increased from R68m.
They contend they will need more resources to play in the Champions Cup, along with the Stormers who also qualified for European rugby’s elite club competition next year.
“We need to be able to fight fire with fire,” insisted Bulls president Willem Strauss.
“I don’t want to say there shouldn’t be a salary cap or even what it should be. I think our salary cap is debatable given the way our game has evolved. The option just has to be there. Competing on three fronts is going to be helluva challenging.”
Sharks CEO Eduard Coetzee also believes the salary cap should be revisited — but with a caveat. “Our suggestion is to keep the cap and if you need to go over you provide financial guarantees,” he said.
“We believe there should be a cap but that you can go up to an agreed amount that is in line with the European teams but then you have to be able to provide financial guarantees to ensure sustainability.”
That amount will likely take local franchises’ salary spend to more than R100m. Irish clubs operate without a cap, English clubs are bound by a £5m (R100m) cap, while clubs in France have to stay inside £8.4m (R166m).
While the Sharks, who now have global reach through their consortium of shareholders, and the Bulls, through the investment of two of the wealthiest men on the continent, can agitate for an increased salary cap, the Stormers and the Lions are cap in hand.
A representative from the Stormers who did not want to be named warned that trying to compete with Europe’s big spenders could be devastating for the local game. “That would not be in the best interest of SA rugby. Besides, everybody has to be treated equally. Maybe they are a bit quick on the draw,” he said about the Bulls and the Sharks.
“Before we get ahead of ourselves, we need to decide how the Currie Cup fits into all of this. We are all still recovering from Covid. Let’s consolidate. We competed well in the URC so there would be no need to tinker with it. Let’s get our debt out of the way. Let’s get fans in.”
Lions chairman and majority shareholder Altmann Allers also advocated looking inward. “We have to fix the industry first,” said Allers whose team will be competing in the Challenge Cup next season.
“Even if I won the Lotto it would make no sense to use half that money to entice players. That’s not solving the problem. It doesn’t help when a team suddenly gets funding and then they want to turn over the applecart.
“Even for the teams who have owners with deep pockets, I’m not sure how long that will last. Those owners are business people and at some point they will want a return on investment.”
Allers said raising salary caps would just spread the pain for everybody. “The salary cap was only recently introduced and to try to change it now would be ridiculous. We really should not end up like a Saracens (who breached the English salary cap three years in a row),” he said.
“Our agreement was brokered between all the interested parties and everyone agreed. To try to change it because of a shortterm, personal agenda ... then it would not be well thought through.”
The issue has already provoked the odd verbal jab between the franchises.
“They are on the back foot,” said Strauss about the Lions.
“That may be a sob story. Maybe he’s just tired of putting in more money.”
At least two franchises wondered how the Sharks, who have gone on a spending spree, are able to stay inside the current salary cap.
Whether the salary cap will be raised will be determined by the SA Rugby Employers Organisation which now has it under discussion.
“We need to get clarity on that quite soon,” said Coetzee. “For 2022/23 we all fall within the cap but post 2023 we need to have a clear view on what the way forward looks like.”