Prem Rugby chiefs have openly acknowledged the difficulties of competing with the French Top 14, largely due to differences in salary cap regulations and tax advantages.
English clubs operate under a salary cap of approximately £8 million per season, which includes a standard cap of £6.4 million supplemented by various credits and allowances. In contrast, the French Top 14 salary cap will increase to around £9.5 million next season. This disparity is often highlighted as a factor behind the Premiership’s recent struggles in European competitions. Exeter Chiefs were the last English club to win the prestigious Investec Champions Cup, achieving the feat in 2020.
At the recent Sports Resolutions conference in London, Prem Rugby’s salary cap director Andrew Rogers explained the challenges: “Trying to compete with the French Top 14, the cap has been quite prohibitive. It’s a challenge, the market. They have a higher salary cap and benefit from a different tax structure.”
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Rogers elaborated on the tax differences, noting that in France, players only pay tax on 70 percent of their income in their first year. Ireland offers another advantage, granting a 40 percent tax rebate on earnings after 10 years of service. “There are benefits in other unions and jurisdictions that make competing more difficult,” he said. Despite this, Rogers stressed that Premiership clubs remain competitive in European competitions, which remains crucial for the league.
The Premiership has recently abolished relegation, a move Rogers attributes to increased investment in the sport. High-profile investors such as energy drinks giant Red Bull and vacuum technology innovator Sir James Dyson have recently entered the rugby market, while US investors are reportedly showing interest in Exeter Chiefs. Investment has also grown in the second-tier Championship, with the Cornish Pirates receiving funding from overseas supporters.
To promote parity, the Premiership will introduce a salary cap floor next season, ensuring clubs maintain a minimum level of spending and thereby enhance competitiveness across the league.
“We’ve faced many challenges recently,” Rogers commented. “Removing relegation has already encouraged investment. With Red Bull’s investment into Newcastle and Dyson’s involvement at Bath, plus other ongoing talks, the landscape is changing rapidly. Combined with the salary floor starting next year, the league is on a far more optimistic path post-Covid.”