The Rugby Football Union (RFU) has fired a severe salary warning to clubs within the Gallagher Premiership over sky-rocketing player salaries.
Salary Warning
The RFU insists that clubs within the top tier of English rugby cannot sustain wages at these levels. The 2017/18 campaign saw salary caps rise by an additional £500,000 to £7 million for three consecutive seasons. Meanwhile teams can sign two ‘marquee’ players whose salaries are not included in the cap.
However, Steve Brown, chief executive of the RFU, insists players are going to have to get real in terms of their salaries amid an increasingly turbulent financial climate for clubs. Brown says that in English and French rugby the “salary inflation has gone beyond the affordability of some clubs and some nations as well”. Brown acknowledged that while England is able to afford the salaries of its nation’s players, there is “not enough money in the system” for other nations to cope “unless we see something radical commercially”.
Declining RFU revenues could be damaging to Premiership clubs
England’s top clubs may currently be able to sustain their wage bills, but a possible decline in revenue from the RFU in the years ahead could change that, especially if the organisation experiences a downturn in profit.
Currently, the Professional Game Agreement (PGA) between the Premiership clubs and the RFU commit £112 million a year to the top-flight clubs during the first four years of its eight-year agreement. The agreement will then be reviewed as to whether the RFU can maintain that level of payment based on its own finances.
It doesn’t look overly promising given that the RFU is overseeing a redundancy process at present, resulting in the likely loss of 62 jobs. The RFU has cited increasing fixed costs and the likelihood of flatlined or declining profits as the primary reasons for commencing the redundancy procedure. Brown revealed that the PGA between the RFU and the Premiership clubs is aligned to the RFU’s income, and the teams “are already aware of this”.
Big-money signings roll in ahead of the 2018/19 campaign
It won’t be long until the 2018/19 Gallagher Premiership begins in earnest, with the match betting previews soon to be in full swing. The fixtures have already been announced and Saracens are the bookies’ early favourites, rated as 13/8 contenders for the title, followed by Exeter Chiefs at 5/2. Saracens travel to Newcastle on the opening weekend of the season, while the Chief host Leicester Tigers.
The league has already seen a string of high-profile additions to Premiership squads, with the biggest arguably involving Charles Piutau, whose switch from Ulster to Bristol is set to earn him up to £1 million per annum in wages. The New Zealand star’s raw power and pace will be a huge asset to the Bristol Bears this season, who have wasted no time in strengthening their squad since promotion.
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Other notable high-profile signings at Premiership teams include another Bristol acquisition – All Blacks prop, John Afoa – who brings a wealth of Premiership experience to the side after joining from local rivals, Gloucester. Dan Biggar has agreed a switch from the Ospreys to Northampton Saints, along with show-stopping Australian winger, Taqele Naiyaravoro, whose fast hands and immense turn of pace are guaranteed to catch the eye at Franklin’s Gardens.
Fans of Gallagher Premiership sides will want to cherish their clubs being able to pay for some of the world’s best talent. It’s unsure how long the Premiership will remain the leading Northern Hemisphere nation for club rugby, with France very much waiting in the wings. Although the RFU will be hoping that their profits don’t diminish too much to leave the door open.
