The news that Jonah Holmes is set to leave the Dragons for a move back to England is one that has been a long time coming.
The writing has been on the wall for a while - ever since his pay appeal was turned down by the Welsh Rugby Union. From then on, for Holmes to stay in Wales on the terms he wanted, the Dragons would have had to stump up the full amount, rather than the 20 per cent of his wages that would have been the case when he was part of the elite 38.
Given where we are in the season, and the general uncertainty in Welsh rugby that has led coaches to claim they are still in the dark about their budgets for next season, it's no surprise that Holmes is seemingly set for a move to the English Championship. Even a return to the Gallagher Premiership appears to have proven tough for the former Leicester Tigers back with their new salary cap coming in next season.
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Holmes' situation raises questions over the elite 38 system in Wales. Dragons director of rugby Dean Ryan said this week on the subject: “Attaching funding to people is often a dangerous position because it can inflate markets and raise wages. I have always been an advocate of having more stable funding and not related to who you have got in what squad, but I also recognise in a small country you have to concentrate some of that resource around key individuals.
“So it’s not a one-sentence answer, but I don’t believe attaching money to individuals as a way of getting our funding is the most stable way to move forward. I think more funding should be stable from year to year.”
Previously in Wales, we used to have dual contracts. Under those, 60 per cent of a player’s wage would be paid by the WRU and 40 per cent by his region. However, it only covered around 15 or so players, so it was soon deemed to not make much sense - given how many more players will turn out for Wales in a season. So the next solution was the elite 38.
A group of 38 Welsh-based players drawn up by Wayne Pivac at the start of every year. The list, not made available publicly, consists of the players likely to make up the Welsh squad. Being part of the 38 means their wages are decided by a panel, as part of the WRU pay-banding system, when they come out of contract. The significance of the list is that it has a bearing on the regions' finances.
The money from the PRB pot in the WRU's coffers, effectively whatever is left once the ringfenced £11.8m for the community game goes out, is split between the four professional sides. Under the elite 38 system, tier one of the funding is set aside to cover wages of the elite 38 players.
That’s separate to the general weighted distribution to the regions, which is based on criteria such as business plans, coaching and governance. 80 per cent of the elite players’ wages will be paid out of the first tranche, leaving the regions to fund the remaining 20 per cent.
The payment bands are thought to be approximately £20,000 for Academy players, £20,000 to £40,000 for player's first professional contracts, £40,000 to £110,000 for established regional players who aren't playing Test rugby and up to £160,000 for marquee regional players not on the Test stage.
New internationals should be getting around £110,000 to £180,000, Test players who haven't turned out for the Lions would be looking at roughly £180,000 to £350,000 and then those who have represented the best of British and Irish rugby could get between £250,000 and £450,000.
Given that you'd only be paying 20 per cent, in theory, having Welsh players on your books is perhaps more beneficial now than it once was. It's still not perfect though.
You're better off financially, something Ryan has spoken about recently - saying supporting Holmes' appeal partly being because "the only mechanism for us to increase the funding at the Dragons is to have more players in the national 38". However, the notion of losing more players to international breaks makes professional rugby in Wales a tougher sell for the four clubs.
Sometimes it's inescapable to shake the feeling that the four sides work as little more than vessels for keeping Welsh stars fit and healthy between Six Nations and autumn campaigns. Their own progression as competitive sides can feel secondary in the grand scheme of Welsh rugby.
But perhaps the biggest issue with the system, as demonstrated by Holmes' impending departure, is the nature of players' values being determined by a panel. Understandably, having pay bands being determined externally means Holmes isn't the first to feel undervalued and he won't be the last.
Back in 2019, then first-choice Wales fly-half Gareth Anscombe expressed his discontent at being restricted to offers over no more than £350,000 a year. The Cardiff Blues playmaker appealed the decision, but that was rejected - meaning the lure of the Welsh jersey was all that could keep him in Wales with clubs like Bristol, Bath and Harlequins all linked with offering him more than he could earn here.
Ultimately, with a World Cup on the horizon, that proved enough and he chose the Ospreys over Cardiff.
Cory Hill also had a drawn-out appeal before he swapped the Dragons for Cardiff. In fact, once the deal for Hill to return to the Arms Park was done, the Dragons called on Welsh rugby bodies to look into the move.
Others have had better luck.
Back in 2020, both Justin Tipuric and Ross Moriarty won their appeals over banding, meaning the Ospreys and Dragons were able to keep two players who would have been in-demand across England and France.
