Salary Cap Vs Club Reductions
By JP
October 17 2022
There is at the moment a discussion going on at the top of the sport which is seemingly being led or channelled by the richer more affluent clubs in the Premiership, those clubs who seem to have endless income stream from their very rich owners.
Exeter, Bristol and London Irish want to increase the salary cap so that they can compete in the present European market for the best players, a very very short term plan which really is just a here and now syndrome.
How can this be done?
Well this is the 2nd part of their plan, they want to reduce the numbers of clubs in the premiership. Meaning they get a bigger share of the pot and 4 clubs lose everything.
One of their arguments for this, to make it seem palatable, is player welfare, so that the players will play 8 less games.
Yet they are also saying let's increase the size of the 2nd tier to 16 Teams, does their welfare NOT count.
Premiership Clubs to play 18 Premiership games over 40weeks but 2nd tier clubs to play 30 games over the same period.
Premiership club argument is that 2nd tier games are not as physical, however, they also state they want to lift the standard and physicality of the 2nd tier so that it is not such a big step up when promoted and the standard of rugby is more like the Premiership.
That does not make any sense whatsover, they are selfishly looking after their club and their players at the expense of every other club.
What they should do to save the wear and tear on players is to cut out a full training day a week, once pre-season is over and only have a maximum of 2 training sessions at full contact.
Salaries Vs Revenue
A rather daming article in a national paper shows why rugby is slowly dying a financial death. It is spending beyond its means, simples!
There are certain clubs spending well over their annual revenue on wages. Wages are the biggest outgoing of any business and the place, wether you like it or not, where massive savings can be made.
The huge increase in salaries started at the same time CVC invested multi millions in Premiership Rugby. Clearly showing how that money was spent, short term gain - increased salaries, better players(today) and more wins, not on investing in the long term sustainability of the clubs

Look at the clubs who have the sugar daddies, the clubs who want to reduce the Premiership to 10 Clubs, the clubs who want a bigger slice of a smaller cake, Britsol, Exeter and Irish.
If Bristol and Exeter are so far overspent how come 2 things, they are not more in debt and they haven't exceeded the Salary cap. maybe they have a huge none playing wage bill who are producing nothing but debt and their owners are shoving in lots of money that is not classed as income.
10 Clubs Vs 14 Clubs
The Premiership and the RFU have stated that they want to grow the game of rugby and bring it too a much wider audience as do CVC.
This does not align with reducing from 14 Clubs to 10 Clubs, just look what would happen to the national picture if say the bottom 3 clubs plus Worcester were removed from the Premiership. Just how much of the country would get to see live Premiership Rigby


Great swathes of the country would lose access to Premiership Rugby.
Sponsors would lose advertising to match attendees and huge TV audiences
TV would lose numbers of games to cover
The game would shrink massively and could easily end up an an uncontrolled downward spiral
The Premiership pot to be shared out amongst the remaining 10 elite premier clubs would reduce resulting in absolutely no increase to those clubs. The game would be less in the public eye with interest in the sport following that for rowing and cricket.
We cannot afford to shrink the sport!
We have to do what we do, cheaper and find ways to generate more income and not to rely on investors, the media and rich owners to bail Professional Rugby Out!
Shrinking the game is NOT the way GROW it, make it more accessable to the average public and increase its access to more, much more children in schools.
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Edited 1 time(s). Last edit at 2022:10:23:22:30:56 by Faithful_City.
Of course enforcing a salary cap is very difficult with overseas bank accounts and many other creative ways of cheating but if you invite known burglars into your house you shouldn't be surprised if you are burgled.
However having said all that the salary cap is way down the list when it comes to making Premiership rugby sustainable. Common business sense should be way above it.
Salary levels need a huge correction.
Wages, revenue and the CVC payment.
Bristol Rugby is one of a group of companies - including Bristol City, Bears Women (a subsidiary of Bristol Rugby) Bristol Flyers (basketball) and Ashton Gate Stadium. Bristol Rugby's revenues come from ticket sales and merchandise sales. We don't see any of the revenue from stadium sales (and I believe this is the same for Bristol City). The stadium company will also see income from hosting Bears Women games; England Women games; concerts such as the Killers, Elton John; motorbike display shows; conferences etc. The group of companies can transfer money between individual companies as they see fit. This doesn't suddenly turn us into a profit-making enterprise, but it also isn't quite as "black and white" as solely looking at Bristol Rugby's accounts. Conference and hotel income have definitely been credited as a major part of the one season Exeter turned a profit (I have no idea how they structure their group of companies - if at all).
Bristol Rugby company accounts show combined playing and support staff wages - some of the support staff provide services for the wider Bristol Sport companies - I believe there is cross-charging shown in the accounts for this.
All the CVC money was used to fund the building of the Rugby training centre - as also shown in the accounts. Very much a long term investment.
I cannot argue against the fact that Steve Lansdown is still contributing to the running costs of all this. However, he is still trying to enable the group of companies to become self-sufficient, through providing further hotel and conferencing facilities, as well as a basketball/arena space. The rugby club is showing signs of benefitting from some of this (we have seen 3 home games this season with an average crowd of 20,000). It's not quite as simple as grabbing two figures and saying "see! They are the bad guys!".
We generate most income from conferences not a sugar daddy.
With covid conference use was hit so the stats are a bit inaccurate, we now have a hotel online to support the team and conference are back in profit so financially it is probably why Rob believes teams should have the option to spend. You can still do well spending far less as history shows
Unless the business of rugby can be made self finacing it has IMHO no long term future.
Edited 1 time(s). Last edit at 2022:10:20:17:25:23 by clalan.
The French have more money for rugby, that’s a fact, we can t afford right now to pay the rates they do. Let’s concentrate on developing and bringing talent through, sure some will leave but every English player that plays in France weakens the French national team.
However, if 'something' happens, and that sugar daddy leaves, what happens? A new investor, who isn't bothered about rugby, but is bothered about profit, keeps the profitable business and ditches the rugby?
I worry whenever I hear there are separate businesses, masquerading as the same business. I'd guess every premiership rugby club is doing this (possibly not Exeter from what some of there fans say, or maybe they are). Warriors and Wasps had this model and look what happened.
Mr Rowe could walk away tomorrow, we would need to find a new CEO, but the club with the other companies it owns would continue.
We became a member club to stop being owned by an individual, in our minds its the only secure answer.
There has been a lot of debate going on with us supporters, being the only two that weren't original Prem stake holders, its so sad that your club who's had so much invested has been robbed in this way.
Hope things can be resolved and you return stronger.
We had 5 seasons where the PRL gave us a reduced amount compared to all the other clubs
We started out at 75% of the amount which increased by 5% each full consecutive season we were in the premiership. We did not get the full amount until or 6th season and now baxter wants to take it off us for actions carried out by 2 people not the 1,000's that are involved with or have supported this club for Decades
Fair and equitable - Never.
I liked and respected Baxter but my god if flames were gushing around him now would I look for fuel or water?? I despise him with a vengeance
JP
P shares or no, it is not his or anybody's fault but your previous owners. I know it feel helpless that you good supporters could not stop this from happening.
We have always hated the P share system, and I have stated that the prem should also support the championship as well as the RFU who’s actions by cutting funding has brought the championship down. It’s lovely having by far the highest paid international coach but not at the expense of rugby teams. Rob has always supported promotion so a strong Championship is a must.
He is honest it may be a flaw but if Rob is asked a question He won’t dodge it like a politician he will state his opinions and feelings.
Quote:Errr, I would guess not.Abmatt
I hope his views would remain the same should the shoe be on the other foot.
Well now Worcester has invested £millions into the Premiership, a lot more than Exeter. You also have to bear in mind we had to make up the difference from what the old clubs received and the reduced amount we received. Exeter never had to do this, they were allowed to take Leeds P Share.
Well, I feel now since 2000 all clubs have invested enough into club rugby and PShare should be removed from every club!!
There should not be any differential between any club in the premiership they should all receive the same amount regardless of time in the premiership and every club relegated should receive a reducing parachute payment when relegated.
The P Share at the moment artificially raises the value of every club and all it does is allow you an equal share of the money distributed by PRL, BUT IF EVERY CLUB GETS An equal share just for being in the premiership, the P Share is worthless anyway.
AND
PAY EVERY CLUB THE SAME
If the salary cap is too high then clubs will continue to go out of business. Just because 4 clubs find the salary cap easy to pay and would like to pay more, it is this selfish attitude that forces the other 8 clubs to over-extend themselves.
The domestic game needs the growth.
Investment has to be downward into the game below the premiership to lift the level and interest especially within schools. This will ultimately lift the inherent standards of English players so we don’t have to break the bank to pay for imports.
JP
If we go down to 10 clubs in each there will be some good clubs in both leagues. Premier 2 have get at 50% of what Premier 1 clubs get. They have to get television time and there has to be promotion and relegation. If the properly fund Premier 2 then I agree drop the parachute payment.
I personally would like to see 2 up - 2 down.
JP
Would provide lots of interest at the end of the season.
Also far more dynamism between the leagues which itself would generate interest in the second league.
I think that the last few seasons have proved that there would be some "prestige" clubs dropping down.
My Structure For The Future!
Quote:Offa
JP, I agree that the P share is anachronistic. I too would advocate all prem clubs getting equal revenue to play on a level playing field. I would also advocate no parachute payment for similar reasons, but with some tv money filtering down to the Championship to be spread equally in order to grow the game.
The reason for the P share and minimum criteria is to prevent a team like, say, London Welsh from getting promoted, claiming their £10m (or whatever) Premiership stake, not improving the team or the ground, getting stuffed every week then happily heading off back to the championship £10m richer.
BB
Certainly not claiming that there is a simple answer to this, and I'm quite glad it will be someone else having to do so.
Quote:Faithful_City
What £10million are you talking about.
The figure of £10m I made up as I don't know exactly how much you get yearly from Premiership Rugby's central revenues via owning a P share.
BB
Quote:You're so wrong if we don't compete in Europe we won't attract new fans most who briefly follow rugby during the 6n aren't going to be interested in Newcastle v worcs but leincester with most of the Ireland team vs some of the England team at sarries or Bath is more attractive...in football the top 6 have and spend more than the rest is keeping a level mediocre playing field the best way forward..noFaithful_City
We don’t need to compete in Europe to grow the domestic game.
If the salary cap is too high then clubs will continue to go out of business. Just because 4 clubs find the salary cap easy to pay and would like to pay more, it is this selfish attitude that forces the other 8 clubs to over-extend themselves.
The domestic game needs the growth.
Investment has to be downward into the game below the premiership to lift the level and interest especially within schools. This will ultimately lift the inherent standards of English players so we don’t have to break the bank to pay for imports.
JP
Quote:Faithful_CityMy Structure For The Future!
At the head of Premiership 2 you have a club that has openly said it doesn't want promotion (and is essentially a feeder club for $aracen$), at the bottom you have two clubs that are currently bust and have no guarantee of functioning at that level. Ealing Trailfinders? Low support and how does it get increased with the club sitting in the middle of three other existing Premiership clubs? CP? It is a fantasy based on club tours and wistful memories of childhood holidays. One of the poorest regions in the country, poor internal transport links and limited transport to the rest of the country. And a population smaller than greater Bristol, Leicester, Newcastle and definitely London.
I once adopted a contrarian position on Rolling Maul because everyone was so gung ho about LW being promoted (and look how well that turned out!) and eventually came to the position where I was actually dubious about the merits of promotion and relegation. Just because football has it (a sport awash with money and a high profile) doesn't mean it's right for rugby union. Plenty of professional team sports around the world have closed leagues or very controlled promotion, or a franchise system. Frankly I think the old merit tables where clubs stayed put and it was players who 'moved' up made more sense!
Look at New Zealand, perhaps the most successful international side. Top of the game, Super Rugby with no promotion or relegation. Below that the NPC which abandoned promotion and relegation and operates as two conferences and then semi pro (or mainly amateur) leagues.
Ringfence the top of the game and combine the Championship and N1 in a conferenced league. Or take off and nuke from orbit and start over from scratch with Divisional or county teams, with central contracts and the clubs feeding into the top tier. Like the old days when the County Championship was the only real competition. Otherwise it's all tinkering and a strange funding model. As mat 1 says, why should clubs with crowds of 20k have the same restriction on salary as the top Championship club that averages 1k?
The clubs are incidental, it’s the just the creation of two fully funded and supported professional leagues.
JP
But my point was that putting in clubs who, let's be honest, don't want promotion, don't have any crowds, don't have any money etc etc doesn't actually help. Why should 'top' clubs give money to other clubs who add little value? I think we need to be very tough here. Ring fence the existing clubs and cast the rest adrift. Or start from Year Zero
I would say the majority of the clubs in Premier 2 if given proper funding and support will all want to get into Premier 1.
JP
JP
The current salary cap in the Premiership is £5m (give or take adjustments).
That is some contrast between the two games.
