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Premiership Rugby Salary Cap Report 2020-21

An official report, published by Premiership Rugby in June 2022, that provides information about the operation and management of Premiership Rugby's Salary Cap in respect of the 2020-21 Salary Cap Year.

An official report, published by Premiership Rugby in June 2022, that provides information about the operation and management of Premiership Rugby's Salary Cap in respect of the 2020-21 Salary Cap Year.

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SALARY CAP REPORT

2020-21

SALARY CAP REPORT 2020-21 | 1


CONTENTS

03 INTRODUCTION

04 HISTORY OF THE PREMIERSHIP RUGBY

SALARY CAP

05 SALARY CAP BACKGROUND

06 OPERATION & MANAGEMENT

OF THE SALARY CAP

09 PLAYERS USED AND SQUAD SIZES

10 PLAYER SALARY INSIGHTS

18 EXCLUDED PLAYERS

19 GLOSSARY

2 | SALARY CAP REPORT 2020-21


INTRODUCTION

The Salary Cap continues to be a crucial part of Premiership Rugby’s

strategic framework and is supported unanimously by all 13 Premiership

Rugby Clubs.

Established in 1999, the Salary Cap framework is under constant review but in

2020 it underwent some crucial changes inspired by a report written by former

cabinet minister Lord Paul Myners and commissioned by Premiership Rugby.

One of the main principles set out in the Myners Report emphasised the promotion

of greater transparency, to broaden and deepen visibility and scrutiny about how

the Salary Cap operates in practice. This report, which covers the season 2020-21

is borne from his recommendations and will become an annual publication.

It was very sad to hear of the passing of Lord Myners earlier this year. Premiership

Rugby is extremely grateful for the huge amount of time and commitment he put

into the review. We believe that through his report and recommendations he has

helped us continue to operate a world-leading system.

This Report provides information about the operation and management of

Premiership Rugby’s Salary Cap in respect of the 2020-21 Salary Cap Year.

If you have any questions or would like further details please contact the media

team at Premiership Rugby via communications@premiershiprugby.com

Simon Massie-Taylor

Chief Executive Officer, Premiership Rugby

SALARY CAP REPORT 2020-21 | 3


HISTORY OF THE PREMIERSHIP

RUGBY SALARY CAP

As a collective, Premiership Rugby and its Clubs led the way in England

when they introduced a Salary Cap in 1999 with the aim of achieving the

following objectives in a proportionate manner:

• ensuring the financial viability of all Clubs and of the Gallagher Premiership

Rugby competition;

• controlling inflationary pressures on Clubs’ costs;

• providing a level playing field for Clubs;

• ensuring a competitive Gallagher Premiership competition; and

• enabling Clubs to compete in European competitions.

The Salary Cap has been kept under continuous review each year but in 2019 the

Salary Cap was subject to a challenge on competition law grounds to the validity

of the Regulations. The Independent Panel, chaired by Lord Dyson, rejected the

challenge and in setting out its conclusions, the Panel noted that the Salary Cap

operates in a pro-competitive manner by promoting the system’s objectives.

The fact that the Salary Cap was kept under continuous review by Premiership

Rugby and the Clubs was a notable factor in the successful competition law

defence.

This decision and the Panel’s strong endorsement for the Salary Cap, presented the

perfect springboard to undertake an extensive review of the Salary Regulations.

As stated above Lord Myners led a comprehensive review of the Salary Cap,

which was published in May 2020 and had the purpose of further strengthening

the Regulations to ensure they provide a world-leading system with extensive

investigatory powers and appropriately robust sanctions. Lord Myners’ review

included a public consultation and meetings with every Premiership Club, the RPA

and the RFU.

His report made a number of recommendations which have been incorporated into

the new system which started during the 2020-21 Salary Cap Year.

4 | SALARY CAP REPORT 2020-21


SALARY CAP BACKGROUND

The Salary Cap is a Premiership Rugby rule that places a limit on the amount

of money a Club can spend on Player salaries. The restriction is on the total

squad spend, not on individual salaries. The level of the cap is determined by the

Premiership Rugby Clubs and for the 2020-21 season was set at £6,400,000 for

senior squads. A number of relief mechanisms are available to Clubs including

credits, injury dispensations and other allowances that are excluded from the

Salary Cap.

EXCLUDED

PLAYER

1

EDUCATION

ALLOWANCE

(unlimited)

INJURED

PLAYER

CREDIT

(£400,000)

£6.4M

SALARY

CAP

INTERNATIONAL

PLAYER CREDITS

(up to £80,000

per Player)

EXCLUDED

PLAYER

2

HOME

GROWN PLAYER

CREDITS

(£50,000 x 12)

The Clubs are actively involved in the development of the Salary Cap. The level

of the Salary Cap and the Regulations that support it are set by the PRL Investor

Board (all 13 Clubs). To make any change at least 10 of the 13 Clubs need to

support any proposal. In the last few seasons, these have been unanimous across

the Clubs. There is also a Salary Cap Sub-Committee that includes representatives

from five Clubs, as well as the Salary Cap Director and the Rugby Director, who

review the Regulations and make recommendations to the Investor Board for

consideration.

SALARY CAP REPORT 2020-21 | 5


OPERATION & MANAGEMENT

OF THE SALARY CAP

The new system has expanded the scope of the Regulations to ensure all

“Participants” have a shared responsibility to support in the compliance

of the Salary Cap. These now cover, not only the Club itself, but also, its

shareholders, directors, employees and Players, as well as Agents. All of

these people must comply with the Regulations and actively support in a

number of areas.

“Each Participant agrees to act honestly, with integrity and in

accordance with the spirit of the Regulations”

There is also a strict obligation on all Participants to:

• Fully co-operating with the Salary Cap Director

• Provide true and accurate information to the Salary Cap Director

• Not assist or take part in any attempt to breach or get around the

Regulations

Report any breaches

Failure to Co-operate is now a serious offence under the Regulations.

In addition to the ongoing day-to-day management of the Salary Cap there are

some key requirements that take place at specific times. These are:

• Club Annual Declarations (30 June) – detailed forecast for the

year signed off by the Chair, CEO, FD and Director of Rugby.

• Club Annual Certifications (30 September) – detailed

certification for the previous year signed off by the Chair, CEO, FD

and Director of Rugby.

• Annual Player Submissions (1 September)– detailed

confirmation of current and previous season income and other

relevant information provided by each Player.

• Annual Audits (October to December) – independent audit

carried out at each Club by PwC on behalf of the Salary Cap

Director. This includes obligations on both the Club and Players.

• Extended Audit (October to December) – forensic audit carried

out by PwC Forensic Services Team on behalf of the Salary Cap

Director.

• Player, Agent and Club Education (July to August) – all

Participants receive education on the Salary Cap and how it

relates to them.

ANNUAL AUDIT

Every Club is subject to an Annual Audit, which is carried out by PwC, as

Premiership Rugby’s appointed Salary Cap accountants. The purpose is to confirm

the accuracy of each Club’s certification and to assess the completeness of the

submissions to ensure that all stipulated costs are included. Whilst the audit

focuses on the previous season, the Regulations allow the accountants and the

Salary Cap Director to look back at compliance over a 5 year period.

6 | SALARY CAP REPORT 2020-21


The accountants performed the audits on-site at Clubs; liaising with Clubs’ finance

teams and reviewing a wide range of documentation including; Player contracts,

commercial contracts invoices, payroll data, credit card reports and accounting

ledgers. During the audit they have full access to each Club’s accounting systems.

The Salary Cap Director also conducted over 50 individual interviews with selected

Players and the Chief Executive Officer at every Club.

A selection of Players at every Club were also required to provide the Salary Cap

Director with their 2019-20 Personal Tax Return and 2019-20 Company Tax Return

for review. This enabled greater insight and scrutiny of Player income, helped

corroborate Club information and provide additional assurances around compliance

of the cap.

As stated above all Players across all Clubs are now required to submit an annual

declaration and certification.

EXTENDED AUDIT

In addition to the Annual Audit, the winner of the Gallagher Premiership is subject

to an Extended Audit, undertaken by PwC’s Forensic Services Team. In line with

the additional powers provided as part of the Salary Regulations 2020-21, this was

the first season in which an Extended Forensic Audit was completed.

As 2020-21 winners, Harlequins was the first Club to be subject to an Extended

Forensic Audit.

The Extended Audit uses forensic technology to analyse the communications

between Club Officials and playing staff that may have a direct impact on the

application of the Salary Regulations at the Club.

This Extended Audit covers both the Club and Players.

Club Element

Email records from selected Club Officials during a stated timeframe were

obtained and reviewed, and the mobile phones of selected Club Officials were

forensically imaged.

PwC’s forensic software then applied a targeted set of search terms to the data

(from the emails and mobile phones, including WhatsApp messages), in order

to identify information within the responsive documents that indicated areas

of potential relevance to the Salary Regulations. The documents deemed as

potentially relevant were then reviewed by the Salary Cap Director.

The Salary Cap Director then met with the Club CEO and other relevant staff to

discuss the results of the Extended Audit and for them to answer any questions in

respect of any relevant documents.

SALARY CAP REPORT 2020-21 | 7


Player Element

The Regulations require the Salary Cap Director to review tax returns and bank

statements of at least half of the Club’s Senior Players, including at least half

of the Club’s best paid Players. In addition to this, the Salary Cap Director

interviewed at least five of the Club’s Players.

Harlequins and their Players provided full and open co-operation during this

process. There were no adverse findings coming from this Extended Audit that

would impact upon the Club’s compliance of the Salary Cap.

Harlequins and their Players should be commended upon their approach, support

and full compliance towards this new provision within the Salary Cap.

AUDIT RESULTS

On completion of the Annual Audit and Extended Audit by PWC and the Salary Cap

Director, the results are communicated to each Club. The data provided in this

report comes from these certified values. Whilst these audits do confirm a final

position to each Club, the Salary Cap Director still has the ability to amend the

values if new information comes to light within a 5 year window.

The data must be read in the context of the COVID-19 pandemic where most Clubs

reduced salaries throughout the 2020-21 season. On average, reductions were

set at 25% of total salary, however a number of Clubs chose to set a floor value

for COVID-19 enforced salary deductions, for example £25,000 and therefore,

protecting the lowest earners at the Club. Therefore, the data reflects the amounts

actually paid rather than the full pre-COVID-19 contractual amounts.

GENERAL LEAGUE INSIGHTS

The following section provides insights into Salary Cap spending across the

Premiership Clubs during the 2020-21 season. The Salary Cap Year runs from 1

July – 30 June and counted in the Salary Cap are payments made by Clubs (and

their Connected Parties) to Players (and their Connected Parties).

The Total Cash Spend in the Senior and Academy Salary Caps are detailed below.

Total Cash Spend is the spend by all 13 Premiership Clubs to employ their Players,

which is counted in the Salary Cap. This includes all payments from Clubs (and

their Connected Parties) to Players (and their Connected Parties), along with

costs attributed to employing Players such as Employer National Insurance

contributions and agents fees. The total numbers of Players contributing to Club

Cost in the Senior Salary Cap is 607 and in the Academy Salary Cap 263. These

Player numbers include Players who were on short-term contracts during the

season and ex-Players who received payments during the Salary Cap Year.

TOTAL

CASH

SPEND

SENIOR

£94,722,353

ACADEMY

£4,143,756

SENIOR

£7,286,335

ACADEMY

£318,750

AVERAGE

CASH

SPEND

8 | SALARY CAP REPORT 2020-21


PLAYERS USED AND SQUAD SIZES

“Players Used” refers to the cumulative number of Players used by Clubs in

Premiership and European matches through the course of the season. This may

include Players which are classed as Senior or Academy Players for the purposes

of the Salary Cap. The 2019-20 season was heavily disrupted by the COVID-19

pandemic, with the league being suspended on 16 March 2020 and restarting on 14

August 2020. As a result of this suspension, Clubs saw numerous Players depart

and new Players join during the course of the 2019-20 season, which resulted in an

increased average number of Players used (59), as shown in the graph below. The

2019-20 season is therefore not comparable with other seasons when analysing

the trend of the number of Players used.

80

AVERAGE NUMBER OF PLAYERS USED

70

60

50

40

30

20

10

44 44 45 45

43

59

47 47 49 49

0

2011-12 2012-13 2013-14 2014-15 2015-16

SEASON

2016-17 2017-18 2018-19 2019-20 2020-21

The graph below details the Players Used v League Points during the 2020-21

season, showing a trend of Clubs with more league points using fewer Players.

Whilst the average number of Players in each Senior Salary Cap squad was 47

the balance between this number and Players used (49 Players) comes from the

Academy Salary Cap Players, which comprised on average 20 Academy Players.

58

56

54

52

50

48

46

44

42

PLAYERS USED vs LEAGUE POINTS

40

20 30 40 50 60

LEAGUE POINTS

70 80 90

SALARY CAP REPORT 2020-21 | 9


PLAYER SALARY INSIGHTS

Two terms referred to in this report are “Total Salary” and “Player Income”. “Total

Salary” is defined in the Salary Regulations and means any remuneration that has

been or will be paid by a Club or a Club’s Connected Party to or for a Player or a

Player’s Connected Party. It also includes remuneration that has been paid or is

due by a Club to HMRC in respect of Employer National Insurance contributions

relating to a Player. “Player Income” is not defined in the Regulations, but is

used in this report to describe the package that the Player receives, it does not

include costs for items such as Agents fees and Employer National Insurance

contributions.

AVERAGE SENIOR SALARY AND

PLAYER INCOME OVER TIME

The graph below shows the average Senior Salary and Player Income since

2013-14. As detailed above, most Clubs reduced salaries in the 2020-21 season

due to the effects of the COVID-19 pandemic and therefore this season is not

comparable with the other seasons. To avoid skewing the data, Players earning less

than £30,000 per year have been excluded, as for Players on short-term contracts

earning less than this amount it may not be reflective of their full season value. The

average Senior Player Total Salary in 2020-21 was £171,187 and Player Income

£143,699.

AVERAGE SENIOR PLAYER TOTAL SALARY AND PLAYER INCOME

AVERAGE OF TOTAL SALARY

AVERAGE OF PLAYER INCOME

£ 200,000

£ 180,000

£ 160,000

£ 140,000

£ 120,000

£ 100,000

£ 80,000

£ 60,000

£ 40,000

£ 20,000

£ 0

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

PLAYER INCOME BANDINGS FOR ALL SENIOR PLAYERS

28%

17%

19%

14%

7%

5%

4%

1%

4%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

10 | SALARY CAP REPORT 2020-21


AVERAGE SENIOR PLAYER INCOME BY POSITION

The graphs in this section detail Senior Player Income by position in the 2020-21

season. Where a Player has played multiple positions during the season, the data

relates to his primary position. A Player’s primary position is determined by where

he has played the most number of minutes in Premiership matches.

The graph below shows the average Player Income by Position. The highest paid

position is Fly-Half, with an average income of £175,679. The highest paid Forward

is Lock, with an average income of £158,617. The lowest paid Forward is Hooker

with an average income of £113,115 and lowest paid Back is Scrum-Half with

£117,912. In the graph below, Forwards are shown in light blue and Backs in dark

blue.

AVERAGE INCOME BY POSITION

FLY-HALF

£175,679

CENTRE

£167,779

LOCK

£158,617

FULL-BACK

£154,021

BACK ROW

£144,437

PROP

£140,897

WING

£122,663

SCRUM-HALF

£117,912

HOOKER

£113,115

SALARY CAP REPORT 2020-21 | 11


The graphs below show in more detail the distribution across salary bandings.

The arrows by each graph indicate the average for each position.

27%

FORWARDS

LOCK

£159K

15%

17%

15%

9%

6%

2%

3%

6%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

27%

BACK ROW

17%

18%

15%

£144K

9%

3%

5%

1%

5%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

PROP

22%

25%

13%

14%

11%

£141K

5% 6%

2% 2%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

12 | SALARY CAP REPORT 2020-21


43%

HOOKER

£113K

21%

15%

13%

0%

6%

2%

0% 0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

BACKS

21%

18%

24%

FLY-HALF

£176K

8%

11%

13%

3% 3%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

0%

24%

21%

19%

CENTRE

£168K

13%

6% 6%

8%

2% 2%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

SALARY CAP REPORT 2020-21 | 13


27%

23%

FULL-BACK

17%

17%

£154K

7%

7%

3%

0%

0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

35%

WING

25%

13%

13%

10%

£123K

3%

0%

0% 0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

SCRUM-HALF

32%

23%

27%

£118K

5%

7%

2%

2%

2%

0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

14 | SALARY CAP REPORT 2020-21


AVERAGE SENIOR PLAYER INCOME BY AGE

The graphs below detail Senior Player Income by age in the 2020-21 season.

Player age is as at 1 July 2020. The age banding with the highest average income is

26-28, with an average of £182,532.

£ 200,000

£ 180,000

£ 160,000

£ 140,000

£ 120,000

£ 100,000

£ 80,000

£ 60,000

£ 40,000

£ 20,000

AGE

£ 0

17-19 20-22 23-25 26-28 29-31 32+

The graphs below show in more detail the distribution across salary

bandings by age. The arrows by each graph indicate the average for each age.

75%

17-19

£50K

13% 13%

0% 0% 0% 0% 0% 0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

38%

42%

20-22

£76K

12%

2% 3%

1% 1%

0% 0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

SALARY CAP REPORT 2020-21 | 15


33%

23-25

20%

22%

12%

£114K

7%

2% 2% 2%

0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

24%

26-28

14%

15% 15%

12%

11%

£183K

5%

3%

0%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

29-31

21%

23%

19%

10%

£174K

6%

6% 6%

6%

2%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

32+

26%

24%

26%

9%

7%

£163K

4%

2%

0%

2%

£30-50K £50-100K £100-150K £150-200K £200-250K £250-300K £300-350K £350-400K £400K+

16 | SALARY CAP REPORT 2020-21


AVERAGE SENIOR PLAYER INCOME BY

PREMIERSHIP EXPERIENCE

The graph below details Senior Player Income by Premiership Experience in the

2020-21 season. Premiership experience is defined as the number of Premiership

appearances as at 1 July 2020.

£250K

PREMIERSHIP EXPERIENCE

£205K

£200K

£174K

£150K

£130K

£149K

£100K

£88K

£94K

£50K

0

0 APPS 1-10 APPS 11-20 APPS 21-50 APPS 51-100 APPS

OVER 100 APPS

The graph shows a clear trend of increased income with more Premiership

appearances. It should be noted that Players in the category ‘0 Premiership

Appearances’ can be further split into two categories, those who have joined

a Premiership Club from a Club abroad and those who have not (i.e. academy

graduates). Players who have joined from abroad and have 0 Premiership

Appearances have an average income of £98,123, compared to £44,550 for Players

who have not come from abroad.

AVERAGE SENIOR PLAYER INCOME BY

INTERNATIONAL EXPERIENCE

The graph below details Senior Player Income by International Experience in the

2020-21 season. International experience is defined as the number of international

caps as at 1 July 2020. The graph shows a trend of increased income with more

international caps, with the biggest increases coming between the bands of 0 caps

and 1-5 caps, and 21-50 caps and over 50 caps. The average income of a Player

with over 50 international caps is £325,306.

£350K

INTERNATIONAL CAPS

£325K

£300K

£250K

£200K

£184K

£198K

£207K

£250K

£150K

£100K

£97K

£50K

0

0 CAPS 1-5 CAPS 6-10 CAPS 11-20 CAPS 21-50 CAPS

OVER 50 CAPS

SALARY CAP REPORT 2020-21 | 17


EXCLUDED PLAYERS

Clubs are entitled to nominate up to two Players to be Excluded Players.

Remuneration paid to Excluded Players is excluded from the Salary Cap. A Player

is only permitted to be nominated as an Excluded Player if he:

• is new to the Premiership;

• has always been at his current Club; or

• has been with his current Club for at least 2 full Salary Cap Years.

The average income of an Excluded Player is £457,409. However, Excluded Players

are not always the highest paid Players, the average income of the top 24 earners

during the 2020-21 season is £532,894 and 10 of the 24 Excluded Players are

not in the top 24 earners. One Club did not nominate any Excluded Players for the

2020-21 Salary Cap Year.

EXCLUDED

PLAYER

AVERAGE

INCOME

AVERAGE

INCOME OF

THE TOP 24

EARNERS

10

1

£457,409

£532,894

10 OF THE 24

EXCLUDED PLAYERS

ARE NOT IN THE

TOP 24 EARNERS

1 CLUB DID

NOT HAVE ANY

EXCLUDED

PLAYERS

Contact Details

salarycap@premiershiprugby.com

18 | SALARY CAP REPORT 2020-21


GLOSSARY

Home Grown Credits

Clubs are able to claim credits of £50,000 per Home Grown Player, up to a

maximum of £600,000 per club, which incentivises Clubs to retain home grown

talent. A Player qualifies as a Home Grown Senior Player if he has been a Player at

the same Club since he was 17 years old and for at least two complete Salary Cap

Years prior to the current one.

International Credits

Clubs are able to claim credits of £40,000 for each Player classed as a Senior EPS

Player, who has been nominated by the RFU to be a member of the Annual Senior

Elite Player Squad. Clubs can claim further credits when Players are unavailable

for Club matches due to being away with England or their International team.

Injury Dispensations

A Club is entitled to credits for the cost of replacing one or more injured Players

up to a maximum of £400,000. The salary paid to a Player who has not made any

appearances for his Club in a season due to injury can be excluded from the Salary

Cap.

Excluded Players

Each Club is entitled to nominate up to two Excluded Players; the remuneration

paid to those Players is excluded from the Salary Cap.

SALARY CAP REPORT 2020-21 | 19


20 | SALARY CAP REPORT 2020-21

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