From the TelegraphGallagher Premiership warned it is in danger of becoming a 'two-tier' leagueExclusive: Sources claim a major split is emerging, with clubs that have the money to offer their top players long-term deals avoiding cutsBy
Gavin Mairs,
CHIEF RUGBY UNION CORRESPONDENT
15 June 2020 • 4:16pm
The Premiership has been warned it is in danger of becoming a “two-tier” league after a majority of clubs were accused of rushing to re-sign their top players on long-term deals to “exploit a loophole” to avoid the £1.4 million reduction in the salary cap from July next year.
Several sources have claimed that that up to seven clubs have moved quickly to offer new long-term deals – some as long as four years (two years plus the option to stay for another two years) – to their key players ahead of Thursday’s deadline, when the new salary cap regulations come into force.
The claims come as the clubs and the Rugby Players’ Association remain locked in a stand-off over moves by some clubs to make permanent the temporary 25 per cent pay cut accepted by the players in response to the financial impact of the coronavirus lockdown.
Sources claim that a major split in the league is emerging, with Bristol, Bath, Exeter, Saracens, Northampton, Sale and Harlequins said to have the financial strength to offer new deals to their top players that will effectively see them avoid having to make cuts as only 75 per cent of their salaries will count to the cap from 2021.
Any deals that are in place before the deadline on Thursday ensures they will be honoured in full, with only 75 per cent of their salaries counting towards a reduced salary cap of £5m (plus credits of up to £1m) from the 2021/22 season, which the clubs agreed last week. The agreement will see the cap return to its current level of £6.4m (plus credits of up to £600,000) by 2024.
The number of marquee players, whose salary is not counted towards the salary cap, will also be reduced from two to one for the 2022-23 season.
“Clubs are rushing to do their deals with their key guys now so they will be in exactly the same position as they are now,” said one Premiership source.
“If you are smart you do a two-plus-two deal and with the two marquee players, you just extend and put options on them as well, so effectively the clubs that can afford it are going to end up at the current level of £6.4 million plus marquees anyway.
“They only agreed to cut the cap with a lead-in time built in so they could sort out new deals. It is going to become a two-tier league, which completely defeats the purpose of the reduction in the salary cap this year.
“The idea behind the reduction was that everyone would be at the same level and we were going to have a really competitive Premiership next year. Instead the gap is growing, with the likes of Worcester, London Irish, Gloucester, Wasps and Newcastle left behind.”
Another source said: “The clubs have just lurched from one loophole to another. This just hasn't been thought through.”
Agents say the amount of deals being offered is unprecedented and could lead to a difference in spending between clubs of over £1.4m.
“The reality is that this will end up with a league split between those clubs who are doing the deals at the moment and those who aren’t,” said one agent.
“It is not like you are talking about a £400,000 or £500,000 difference in spending that you might get away with if you have good coaching and a good culture.
“We are talking at least a £1.4m difference plus marquees and that is a gap that is so significant that the league will be split between a top seven and the rest.”
One source defended the actions of the clubs, however, insisting it was unfair that those who have been run as successful businesses should be penalised, particularly given that the clubs received a £13m windfall last year following the investment by private equity firm CVC for a minority share in the Premiership.
“There is a strong feeling from some of the clubs who are re-signing players that everyone has just benefited from receiving £13m for the CVC deal last year and they are in the strongest position they have been in,” said the source.
“What have those who are struggling done with the £13m? If you have mis-managed your club, why should the league be pulled down to the lowest common denominator?
“The likes of Northampton and Exeter are well-run clubs who are in pretty good shape, they are financially stable and cash rich so are probably in the best position they have been in 15 years.”