A number of financially struggling Premiership rugby clubs, thought to be in the majority, are keen on scrapping plans to see the league’s salary cap bounce back to £6.4m in 2024/25 as they continue to count the losses.
English professional rugby is once again in a state of turmoil, having seen Worcester Warriors and Wasps Rugby collapse into administration and drop out of the league early during the 2022/23 season, London Irish are now balanced on a precipice.
The Exiles face potential suspension from the Gallagher Premiership as speculation continues to rage about their future amid a possible takeover by an American consortium led by Alfred ‘Chip’ Sloan, a former sports agent and California-based lawyer.
The Rugby Football Union says that, along with Premiership Rugby and the Rugby Players’ Association, it is “seeking to take action to obtain greater clarity on the future of London Irish”.
A deadline of May 30 has now been set by the RFU in what is an increasingly grim saga, with Irish having reported debts of £30million. London Irish’s current millionaire owner Mick Crossan is on record as saying he is ready to give the club away for nothing after almost a decade of ownership.
By May 30, a takeover of the club must have been completed and approved by the RFU, with the buyers undertaking to provide all required working capital to meet the club’s obligations for at least next season, or the club showing that it will continue to be funded to operate throughout next season.
The Daily Telegraph report that contingency plans are being drawn up to restructure the league to 10 sides for next season in case London Irish go under while the agents of worried players wait in the wings should another Premiership squad need to be scattered.
The financial struggle clubs are facing has been accelerated by repayments kicking in from the hefty Government loans taken out during the Covid pandemic to cover the shortfall sides felt when fans were locked out from the stadiums and the rugby’s lifeblood of matchday revenue was strangled. Premiership clubs collectively received Government loans totaling £148m.
But the Daily Mail reports that once again, as so often is the case on prominent matters, the owners of the Premiership clubs are split over how best to proceed with setting the salary cap which as it stands is due to increase from a £5 million baseline spend per squad to £6.4m for the start of the 2024/25 season having been cut from that higher figure in 2020.
Many clubs feel the cap should remain at £5m, but others, reported to include Bath and Bristol who are backed by wealthy owners Bruce Craig and Steve Lansdown, disagree.
READ MORE: Gloucester Rugby CEO extols the virtues of a 10-team Premiership
Speaking after the final game of the regular season, when Bristol said goodbye to the likes of rugby 'rock stars' Charles Piutau and Semi Radradra in large part due to salary cap constraints, Bears director of rugby Pat Lam said: "We have huge change this summer, there are a lot of guys leaving. The salary cap change had a big impact on us so we are rebuilding. I am excited for the year we are building for the year after [24/25] and the team we have got now has some really good young talent and we will keep going on this journey."
Bath, who have also relaunched their bid to build a new stadium in the heart of the city, have also shown their willingness to spend big. making the highest profile signing ahead of the 2023/24 campaign with Scottish superstar fly-half Finn Russell arriving at the club.
Saturday will see Leinster host La Rochelle in the final of the Heineken Champions Cup, with no English side reaching the silverware decider since the salary cap was reduced three years ago, with clubs unable to compete with their better-financed rivals. The hard cold fact is Premiership sides are not on an even playing field in the European competitions and will likely be significant underdogs in the latter stages next season and beyond, but senior figures at clubs up and down England warn a salary cap increase would also create an imbalanced league system domestically with some clubs able to spend as much as others.
This week, an anonymous high-ranking source at a leading Premiership side told the Daily Mail: "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 source continued: “Rugby clubs are businesses. 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.
“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.
“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 current TV deal with BT Sport runs for one more season until the end of 2023/24 with the broadcaster undergoing a rebranding of its own this summer to TNT Sport following an acquisition of the channel by Warner Bros Discovery, which also owns Eurosport.
For now though, any thoughts of Premiership Rugby or EPCR finalising fixtures for next season's competitions will have to be put on hold until officials know how many clubs will be competing in them. As things stand, the future is uncertain.
