EXCLUSIVE: Premiership rugby warned against increasing the salary cap

EXCLUSIVE: ‘The Premiership is a really good product and competitive – but its in danger of shooting itself in the foot again’: English rugby is warned against increasing the salary cap, by a club chief – amid major doubts over London Irish’s future

  • There’s a split among the 11 Premiership clubs over plans to increase salary cap 
  • It’ll go from £5million-a-team to £6.4m for the start of the 2024-25 season 

English rugby has been told it’s ‘shooting itself in the foot’ with its clubs at war over proposals to raise the Premiership’s salary cap at a time when London Irish are the latest team in severe financial difficulty.

After a season in which both Worcester and Wasps have fallen out of existence, Irish must prove their proposed US takeover has been completed or that their current owners can fund the club for next season by May 30. If they can’t, they will be suspended from the Premiership.

There are serious concerns in the English game Irish will not be able to meet the deadline imposed by the RFU and will become the third team to exit the top tier due to monetary problems.

At the same time, there remains a huge split among the current 11 Premiership clubs over plans to increase the salary cap from £5million-a-team to £6.4m for the start of the 2024-25 season. Many feel the cap – how much each side can spend on their playing squad – should remain at £5m as it is now with it clear many clubs are struggling to stay afloat.

But others – understood to include Bath and Bristol who are backed by wealthy owners – disagree.

Premiership Rugby has been warned about the dangers of increasing the salary cap again

‘Rugby clubs are businesses,’ a high-ranking source at a leading Premiership side told.

‘I don’t know any other industry that would see so many of its businesses fold and then choose to increase its cost base without any form of additional income. It’s crazy.

‘There is the point you don’t have to spend up to the cap and that is the view of some clubs. Right now the Premiership is a really good product. It’s a competitive league.

‘But if you have a league where some teams are spending up to the cap and others aren’t, all you will get is a two-team division and there may well not be enough clubs left to keep that competitive. If that happens, how do you attract sponsors and increase commercial revenue? Rugby is shooting itself in the foot once again.’

The vote to lower the Premiership’s salary cap to £5m and then increase it back to £6.4m took place before the tragic demise of Worcester and Wasps.

There is a growing feeling that plan should be revisited but keeping the cap in its current guise would require a unanimous vote from all Premiership clubs.

That remains unlikely as things stand.

‘The majority of clubs want to maintain the salary cap as it is and regulate it to central funding which makes a great deal of sense,’ the source added.

Clubs are torn over increasing the salary cap from £5million to £6.4m for the start of 2024-25 

‘There has got to be a way to get clubs back on a stable financial footing. If the Premiership secures a really good TV deal then all our problems might be over but I don’t know any industry that works on the basis of crossing its fingers and hoping.’

The RFU-imposed deadline on Irish is designed to avoid the club becoming insolvent midway through a season which is what happened to both Worcester and Wasps.

But in a letter to Irish players, which has been seen by Mail Sport, English rugby’s governing body spells out there is no sign of a US takeover of the club being anywhere near close.

‘We have been asking for details of exactly who the new owners will be and to show they have the funds to keep the club going because it is still lossmaking,’ the letter reads.

‘As yet, we have not been provided with this information and so cannot approve any takeover.

‘In any case, we understand the contract for the sale of the club has not been agreed between the current owners and buyers yet.’

London Irish have been given a deadline to have their takeover completed – or face suspension

If the May 30 deadline is not met, the club who recently finished fifth in the Premiership will not be involved in the league or any competition next season

The US consortium looking to buy Irish includes Super Bowl winner Ray Lewis and ex-NBA stars Julius Erving and Allen Iverson among others.

But the fact Iverson has previously admitted to burning through the $200m he earned in his basketball career and then filed for bankruptcy won’t reassure Irish supporters.

With there little optimism Irish will meet their deadline of 4pm on May 30, the RFU and the Premiership are drawing up contingency plans to start next season without them.

Such a possible scenario has already attracted other clubs to the potential availability of Irish players, chief among them England tyro Henry Arundell.

If Irish are suspended at the end of the month, it is understood their players would have to submit breach-of-contract letters to leave immediately.

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