All Aviva Premiership Rugby clubs are now subject to a new, more transparent, salary cap monitoring and investigation system.
Following a detailed consultation by the salary cap manager with all of the clubs on the operation and management of the salary cap, the Premiership Rugby Board has approved increased monitoring, investigation and transparency systems to support this important area of Premiership Rugby business.
Premiership Rugby may now undertake an investigatory audit in addition to the annual salary cap audit which can involve using independent experts to access relevant records held by a club who are suspected of breaching the regulations. There will also be clear sanctions to deal with any club failing to co-operate.
Being open and transparent, both internally and externally, will support the management of the salary cap in many ways. In particular it will help promote the effective administration, management and governance of the salary cap to the clubs and key stakeholders within Premiership Rugby.
"As a collective, Premiership Rugby and its clubs led the way in England when in 1999 they introduced their salary cap in order to ensure the continuing financial viability of all clubs," said Premiership Rugby chief executive Mark McCafferty.
"Their objective was to control inflationary pressures on clubs' costs and to provide a level playing field for clubs to ensure a competitive Aviva Premiership Rugby competition.
"These objectives are borne out in the financial success the league is now seeing, with a healthy turnover of teams at the top of the league. We have also had three different winners of the Aviva Premiership Rugby competition in as many years, in the most competitive league in world rugby (highest number of games finishing in less than one score compared to any other rugby competition in the world).
"Having a compelling and unpredictable Aviva Premiership Rugby competition is at the centre of Premiership Rugby's strategic objectives. It is a crucial factor in increasing the commercial value of the competition through its new broadcaster, BT Sport, and seeing the renewal of its title sponsor, Aviva."
Phil Winstanley, rugby director at Premiership Rugby, added: "It was inevitable that as the game develops we would conduct a review of the salary cap.
"Salary caps exist in many commercially successful sports around the world. The most obvious examples are the NFL and NHL in the USA, and the NRL and AFL in Australia.
"The introduction in football of UEFA's Financial Fair Play and the Premier League clubs' new financial regulations, together with salary caps in Rugby League, county cricket and in rugby union with France's Top 14 and the Welsh regions, all demonstrating how European sport has recently grasped the importance of controlling costs and long-term financial sustainability."
The Premiership Rugby salary cap was set up to achieve the following objectives in an appropriate and proportionate manner:
(a) ensuring the financial viability of all clubs and of the Aviva Premiership Rugby competition;
(b) controlling inflationary pressures on clubs' costs;
(c) providing a level playing field for clubs; and
(d) ensuring a competitive Aviva Premiership Rugby competition.
The new system also means that any clubs suspected of breaching the cap will be subject to a confidential disciplinary hearing with the sanction of both a points deduction and fine available. Any breach and the sanction will be made public.
Sport Resolutions UK, will run the disciplinary procedure, appointing an independent panel of legal experts and overseeing any appeal procedure.
Premiership Rugby has also set up an email address and hotline phone number for anyone wanting to present information. Anyone can now email [email protected] or call 07583 826343.
In the 2013-14 Season the total salary cap comprises:
£4.26 million – Senior Salary Cap
£240,000 – Academy Credits (see definition below)
1 Excluded Player (salary is not included in the salary cap)
Clubs can also benefit from the £200,000 Academy Cap which supports the development and retention of home grown talent at each Club.