Premiership Rugby clubs unanimously vote to reduce salary cap

Premiership Rugby clubs have voted to temporarily reduce the salary cap
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Premiership Rugby clubs have unanimously voted to temporarily reduce the league’s salary cap in the wake of the Covid-19 pandemic.

England’s top-flight clubs have been hit hard by the outbreak of coronavirus, with many damaged by the loss of matchday revenue.

Premiership clubs have now voted to reduce the salary cap from the 2021/22 season until the 2023/2024 campaign after meeting virtually on Monday.

The salary cap, which currently stands at £7million per club, will be reduced for the 2021/22 season and will return to the current level before the start of the 2024/25 season at the latest.

From the 2021/22 season, the senior ceiling for clubs operating in the cap will be £5m (down from its current rate of £6.4m), and it will continue to be linked to the central growth of Premiership rugby.

Homegrown player credits will be retained up to £600,000, while international and England Performance Squad player credits will be retained but limited to a maximum of £400,000.

Season-long loans salary cap exemption will be removed, the academy ceiling will remain at £100,000 and the upper salary limit for an academy player will increase from £30,000 to £50,000.

Homegrown academy players do not get counted in the £100,000, helping clubs’ ability to support young, English-qualified talent.

For any existing contracts that continue into the 2021/22 salary year and beyond, their cap cost will be counted at 75 percent of their overall actual value, to sensibly manage the transition to new cap levels.

For the 2022-23 season, players allowed outside the cap (marquee players) will reduce to one - except for where a club has a current contract in place for two marquee players.

In that scenario, both players may remain as marquee players until the first of their current contracts expire. The decision to reduce from two marquee players to one is based on balancing financial sustainability while still attracting the best talent from around the world to the league.

Darren Childs, Premiership Rugby chief executive, said: “Our clubs have taken these difficult steps as part of a range of measures to weather the significant financial impact of the Covid-19 pandemic.

“The ambition for the future of the game remains unchanged, and as we look beyond the immediate crisis we know that Premiership Rugby has huge potential to bring people together and will grow as a sport with the players, clubs and all stakeholders sharing in that future.”

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