1
'Way less competitive': How reduced Premiership cap has hit market
By Liam Heagney
Exeter boss Rob Baxter has explained that Gallagher Premiership clubs will most feel the pinch when it comes to the recruitment of players from the southern hemisphere following the introduction of the reduced salary cap governing the top flight in England. Reacting to the financial impact of the pandemic, clubs in the Premiership decided to reduce the £6.4million salary cap in place for the 2020/21 season to £5m for this season while the current two marquee player stipulation that sits outside the cap will be reduced to one for 2022/23.
ADVERTISEMENT
It has left some teams feeling challenged and there are fears that it will especially leave English clubs vulnerable to some poor results in the Champions and Challenge Cup over the next few years. However, Exeter boss Baxter is refusing to throw in the towel on his club’s European prospects, but he admitted the Premiership was now no longer the massively attractive destination it once was for signings from New Zealand and Australia.
Whereas previously the power of the pound was a huge incentive compared to the contracts on offer to players in those countries, the reduced salary cap has considerably changed the market with players from down south asking for deals that are now generally beyond the means of clubs in England.
Video Player is loading.
This is a modal window.
The Video Cloud video was not found.
Error Code: VIDEO_CLOUD_ERR_VIDEO_NOT_FOUND
Session ID: 2025-05-20:7b59e0359bd90bcfdd0aca7a Player Element ID: brightcove-embedded-video
“What I am finding mainly at the moment is the majority of ballpark salary expectations coming in are still salaries that you would still expect to be paying if it was a £6.4million market,” said Baxter. “It doesn’t really seem to be at this stage that kind of realisation that it is a big drop off. In theory, it is probably a bit more than a 25 per cent drop off when you start talking about second marquee players disappearing next season if they are not under contract.
“At the moment that does make the Premiership way less competitive when it comes to southern hemisphere sides as an example. So some of the base salary levels in New Zealand and Australia now are actually kind of comparable to what we could offer whereas before in the £6.4m you could be very competitive. On base level contract that is not really the case now and it was certainly not the expectation at this moment. Whether that will change over the next two years I am not sure but I do think that is going to put an onus on developing (local) players so to speak.
TRANSFER: Ellis Genge to quit Leicester#Leicester #HeinekenChampionsCup #GallagherPrem https://t.co/2ROTZjDPvc
— RugbyPass (@RugbyPass) December 15, 2021
“It is a challenge,” added long-serving Exeter coach Baxter when asked about what the reduced cap will do regarding the competitiveness of English clubs in Europe. Exeter started their latest campaign with a win over Montpellier but others such as Wasps and Bath suffered drubbings against Irish opposition. “The negatives are probably that it is difficult to keep a successful group together. That is the negative and when we are highlighting Europe, that is probably when the biggest disparity will happen over the next couple of years because you are competing against different levels of the salary cap.
“But at the same time, it does show the positives of the cap, that it should be difficult to keep a group of good players together. That is the point. It should be hard to bring a group of international quality players together… it should be a challenge and that was the whole point of the Premiership having a salary cap, to make it like that where it is hard to do. Whether it is £5m, £6.4m, you are going to have some of those issues.
ADVERTISEMENT
“It feels a little easier with the £6.4m because there is a bit more to spread around and make everyone feel comfortable. The reality now what you are seeing with the reduction to £5m is you can cherry pick the odd player and that can feel a bit awkward at times because you lose a good player every now and then but it is what it is now and the important thing is to get on with it really.
“It will add a challenge but we still expect that we can be competitive,” added Baxter about Exeter, who were crowned European champions in October 2020. “We are certainly not thinking of throwing in the towel in Europe over the next two seasons. I want to create and help be part of a team that is competitive every year regardless of what the salary cap is. It is just a slightly different challenge, but it may well be something that makes us stronger in two years’ time.
“The reality is that if all the clubs in England spend a couple of years focused largely on the development and getting experience into a different group of players, if we move back to a £6.4m cap and two marquee players and all the bits and pieces we had before, all of a sudden we could potentially be in the market to bring in a level of player on top of those newly developed players and it could be a very bright period for English clubs in Europe. We have got to try and work on the positives of ‘let’s keep developing people and let’s go and try and fight to be competitive every year’.”
Baxter confirmed that Exeter didn’t vote for the reduced salary cap. “No, we didn’t vote to reduce it.” He also added that he found it odd that other clubs who voted for it rushed out to renegotiate deals during a grace period in 2020 before the reduction was implemented. “It wasn’t unanimous but the majority of the clubs voted to have five years reduced salary cap to allow the levelling out of contracts as some clubs had larger numbers of players under longer-term contracts and some clubs had a lot of players coming off-contract.
ADVERTISEMENT
“To level out that process, there was a window of about ten days to allow clubs to lengthen contracts and contracts signed before that date would always count at 75 per cent in the new cap. Pretty much every club got a number of players signed up within the £6.4m cap that were counted as 75 per cent of their total.
“So there is an irony in that you had a lot of clubs who wanted to reduce the cap to £5m but those same clubs also then proceeded to sign up players on longer-term contracts that would count as 75 per cent of the cap. So in reality there won’t be that many clubs this season in particular who are at the £5m cap because they will have a number of players with a 75 per cent counted contract.
“The irony of it is that it never really went straight to £5m. That is why I am saying it is more the unwinding of contracts over the whole three years period. What you will find is you won’t have any clubs spending the same amount of money… but it does feel ironic that on the one hand, you had a majority of clubs vote to reduce to £5m but then the same clubs choose to spend more than £5m keeping longer-term contracts. If the desperation is to get down to £5m then you wouldn’t have signed any players over £5m.”
