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Fresh Premiership fears: 'Salaries won't be going back up'
Fresh battles lines are set to be drawn in the Gallagher Premiership as clubs are believed to be ready to insist that the across the board 25 per cent wage cuts for players are here to stay and salaries won’t be going back up to the levels they were at at the start of 2020 before the coronavirus pandemic.
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With the sport in England indefinitely suspended and no confirmation yet of an official restart date for the 2019/20 season, top-flight rugby has been plunged into a chaotic state of flux where the inability to cover costs has been starkly laid bare.
Last week’s Lord Myners salary cap recommendations highlighted how the Premiership just doesn’t make ends meet as a business, the report outlining that Companies House recorded a staggering £88.7million collective loss among the 13 stakeholder clubs in the years ending 2017 and 2018. Only Exeter turned a profit, whereas others such as Wasps lost in excess of £14m.
Even though CVC Capital Partners have since provided a windfall to those stakeholders with its purchase of a 27 per cent stake in the tournament, the financial situation has remained generally dire and ex-England skipper Lawrence Dallaglio has predicted long-lasting consequences for players.
Speaking on BT Sport, the Wasps legend said: “The reality of the Covid crisis is that the salary cap is going to come down, there is no doubt about that. The game, the sport of rugby, particularly at the highest level, has been living way beyond its means.
Bleak bottom line… https://t.co/JQxMKNZfLy
— RugbyPass (@RugbyPass) May 15, 2020
“None of those clubs have made a profit in the last few years (except Exeter). Just to give you some idea, five years ago about five players in the Premiership were earning a salary of £300,000 or more. In the five years since then, it’s somewhere around about 100 players are earning that sort of level.
“What we have seen since the introduction of the Covid crisis is a 25 per cent reduction in salaries which all the clubs have agreed. Some clubs, I won’t name them, were pushing for a 50 per cent reduction in these salaries.
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“The new normal for players will be that their salaries won’t be going back up again. Those reductions are here to stay for the foreseeable future. The reality is the game is starting to recognise that it has to live within its means.”
Sportsmail have since claimed that Gloucester and Wasps have been to the fore in informing players that their pay cuts will continue for the ‘foreseeable future’. It reported: “Multiple sources indicated on Tuesday night that Wasps have informed staff and players that the cuts will become permanent, while players at Gloucester and other clubs have already been warned that reductions are likely to extend for the duration of current contracts.”
That will prompt fears of a player exodus from the English league, but Dallaglio wasn’t alone in believing that the new reality will be good for the Premiership. Claiming the Myners salary cap recommendations were positive for a sport that has struggled to best account for its £7m per club limit in the pre-Covid era, Austin Healy said: “They [the recommendations] are long overdue. You read through that, it all makes common sense, it all adds up, it’s something that a world-class sport and a world-class league should have had delivered and been in place from the start.
“The one thing I would disagree with it – and I have said for a long time – is that you should publish the wage of all the players, whether that is internally at least. That should be done because it has a huge benefit in the NFL and huge benefit in the NBA in terms of clubs managing their financial positions and it stops the secondary industry driving traffic and value.
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“That is the only thing I would change in that report. It looked very good to me and if Clive Woodward thinks it’s good it must be because he never agrees with anything that comes out new in rugby.”
