Worcester Warriors fully support the unanimous decision of Premiership clubs to reduce the salary cap from the 2020/21 season to ensure the viability and sustainability of the competition in the challenging economic circumstances that have been caused by the Coronavirus (Covid-19) pandemic.
We are delighted that common, business sense has prevailed and we now have a plan in place to ensure that we have a strong and sustainable future.
This is not a decision solely about the preservation of our club but of the other 12 member clubs of Premiership Rugby Limited, the strength of England’s national side and the future health of rugby at all levels in England.
Due to the Covid-19 lockdown all generated income for all clubs has effectively stopped for the last three months.
Although there are signs of the lockdown easing and we have a target date for a resumption of the 2019/20 season of August 15 it is clear that income will not return to pre-Coronavirus levels for some considerable time.
The effects of this downturn are unparalleled and would be disastrous without serious and immediate remedial action being taken by clubs to ensure that we not only survive but, in the longer term, emerge stronger and more robust.
Inevitably, some difficult decisions have to be made if we are to ensure that elite professional club rugby in England is to prosper.
As owners we are committed to supporting a vibrant domestic game that underpins a successful England team with Premiership clubs at the heart of their local communities, helping to nurture rugby and future generations of players and supporters.
The support shown for Warriors during this difficult time has been both humbling and overwhelming and has emphasised the important role we play in our local community.
It is a role that we are proud of but, in order for us to continue to play that role in demanding economic times all areas of expenditure will, inevitably, come under scrutiny, particularly players’ salaries.
All 13 clubs have already taken significant steps to mitigate the situation in the short term, which includes asking players and staff to accept pay reductions of 25%.
We recognise the impact of this decision on players and are discussing the implications directly with our playing group and working closely with the Rugby Players Association whose support and understanding we greatly appreciate and welcome.
Although Premiership clubs operate within a salary cap, players’ salaries remain the largest single item of expenditure for clubs.
In order to sustain the size of playing squad required to support a fully-professional rugby club and protect the health and welfare of our players, it has been agreed to make changes to the salary cap for the 2021/22, 2022/23 and 2023/24 seasons.
We remain committed to delivering a Premiership that is widely-regarded as being the strongest and most competitive domestic competition in the world and with the support of everyone who plays, coaches, administers, sponsors or watches, we will continue to do that.
Salary cap changes
From 2021-22:
• The senior ceiling will be £5m (down from £6.4m), and it will continue to be linked to the central growth of Premiership Rugby.
• Home-grown player credits will be retained up to £600,000.
• International and EPS player credits will be retained but limited to a maximum of £400,000.
• Season-long loans salary cap exemption will be removed.
• The academy ceiling will remain at £100,000 (this is for non-home grown academy players) but the upper salary limit for an academy player will increase from £30,000 to £50,000. Homegrown academy players do not get counted in the £100,000, boosting the clubs’ ability to support young English qualified talent.
• For any existing contracts that continue into the 2021-22 salary year, and beyond, their cap cost will be counted at 75% of their overall actual value, to sensibly manage the transition to new cap levels.
From 2022-23
• Excluded players will reduce to one player, except for where a club has a current contract in place for two excluded players. In that scenario, both players may remain as excluded players until the first of their current contracts expire. The decision to reduce from two excluded players to one is based on balancing financial sustainability while still attracting the best talent from around the world to the league.
From 2024-25
• The senior ceiling will return to a minimum of £6.4m.