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Premiership ponders wage cap cut

Bristol's Robert Sidoli
Bristol spend 1m less than other clubs on their playing squad

The Guinness Premiership's 12 teams will in January discuss reducing the salary cap in a bid to help those clubs threatened by the economic downturn.

The proposal would see the ceiling for next season cut from 4m to 3.5m.

"There may be a chance we bring it down slightly," said Premier Rugby chief executive Mark McCafferty.

"We would have to make that decision in January and in time for next season. If we don't do it, we will take a range of other cost measures."

Last month Bristol, operating at a 1m annual loss, issued an appeal for new investment to "remain competitive".

Newcastle are also operating on a shoestring, while it has been predicted that England's leading clubs will lose between 12m and 20m this season.

606: DEBATE
TFCW

The decision to reduce the salary cap, which was introduced in the late 1990s, would require a 75% majority vote from the clubs when they meet on 14 January and again in early February.

An 80% increase in the cap, from 2.2m per club to 4m, was agreed ahead of this season to help clubs cope with demands of playing in Europe and the domestic league.

McCafferty said the agreement needed to be reviewed as "the world has changed".

"Twelve months ago it looked a good decision," he added.

Bristol, currently bottom of the Premiership, revealed they needed about 2.5m in extra funding to survive in the top flight.

The club spends 1m less than other clubs on their playing squad, but have experienced a 20% drop in attendances.

Gloucester, Leicester and Northampton were the only Premiership clubs to make a profit last season.

McCafferty, however, added that there "is light at the end of the tunnel" as a new television deal will bring in 54m in 2010, earning each club 1.5m - a 45% increase on current arrangements.

If we bring the salary cap down there is a risk we will lose a little bit of an edge in Europe

Mark McCafferty

"Over the next 18 months we are going to have to work extremely hard on the short-term financial issues and work with the clubs to try and keep their own positions stable," added McCafferty.

"We will take the policy measures to make sure the competition stays competitive and the likes of Bristol and others can afford to run their club.

"If we bring the salary cap down there is a risk we will lose a little bit of an edge in Europe - but we are all focused on the fact the league needs to remain strong.

"The Premiership brings in 70% of our revenue. We want our clubs doing well in Europe but this is our core product and everything else comes after that.

"Our job is to turn clubs into businesses that are sustainable without the required indulgence of shareholders."

McCafferty dismissed suggestions that the current economic climate increased the likelihood of a breakaway European Super League.

"I think there is massive support in England and France to maintain the national championship," he said.

"The crowing of the national champion is important and will always be important. You see some of the dangers with the Magners League of coming away from that."

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see also
Bristol seek investment of 2.5m
19 Nov 08 |  Bristol
Blowers to head home in January
16 Dec 08 |  Bristol
Championship plan gains support
14 Nov 08 |  English
Saints expect end of salary cap
16 Sep 08 |  Northampton


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