Last week Premiership Rugby published the report of a comprehensive review of its Salary Cap regulations led by former Government Minister, Lord Myners CBE. The review was commissioned by Darren Childs, CEO, Premiership Rugby, in December 2019, three months after his appointment and before the onset of the global Covid-19 pandemic.
The independent Review was created with the objective of strengthening the regulations to create a world-leading Salary Cap system.
The Myners Review follows on from the 2019 case in which an independent disciplinary panel upheld charges against Saracens for breaches of the Salary Cap. The panel gave a strong endorsement of the regulations, finding the cap to be consistent with competition law and with the objectives of ensuring the financial viability of clubs and the league, controlling inflationary pressures, providing a level playing field, ensuring a competitive league and enabling clubs to compete in European competitions.
As part of the review, Lord Myners undertook an extensive public consultation so that anyone interested in professional club rugby, including supporters and players, could have their say on the future of the regulations. Around 450 individuals and organisations responded to the consultation and Lord Myners held follow-up interviews with around 200 stakeholders to discuss their views in detail.
After considering all responses and examining examples of international best practice, Lord Myners has now developed a set of recommendations to improve how the Salary Cap operates. Among the changes proposed in the report, Lord Myners recommends:
- Greater flexibility for a Disciplinary Panel in relation to the range, and severity, of sanctions to ensure “the punishment fits the crime”, including the availability of sanctions such as suspensions and the removal of titles
- The promotion of greater transparency, which will broaden and deepen visibility and scrutiny
- Greater accountability for the board and the executives of the constituent clubs of Premiership Rugby
- Greater accountability for the players and their agents
- Increased reporting obligations on clubs
- Stronger investigatory powers vested in the salary cap manager function and increased resource to perform this function
- Making the regulations easier for clubs to understand, and for Premiership Rugby to administer
A full list of the recommendations can be found at the end of this statement.
Premiership Rugby will now work with member clubs and, where appropriate, other stakeholders to consider Lord Myners’ recommendations and finalise changes to the regulations.
Darren Childs, Chief Executive of Premiership Rugby, commented: “Premiership Rugby established an independent review of the Salary Cap because we want to ensure that it provides a world-leading framework for the future. We are immensely grateful to Lord Myners for his thorough and insightful work during an extensive review process.
“We welcome the comprehensive set of recommendations put forward by Lord Myners following the review and we are pleased to publish his report so that everyone has an opportunity to consider his conclusions. In the next stage of this process, we will consult carefully with our clubs and other stakeholders as we finalise the new Salary Cap regulations for the long-term benefit of our sport.”
Appendix: The full list of Lord Myners’ recommendations
1. Separation of Investigation, Decision to Prosecute and Enforcement
1.1 Enshrine a commitment by the clubs to respect the independence of the regulations.
1.2 The current discretion for clubs to choose to remove a director of a club pursuant to Regulation 14.7 should be removed.
1.3 Appoint an independent Cap Governance Monitor, with reserved powers in relation to the enforcement of the regulations.
2.1 Announce the fact that a charge has been brought as soon as is reasonably practical and within seven days, with a brief summary of the substance and details, and proposed dates for a hearing.
2.2 Publish disciplinary decisions in full, with the redaction of confidential information or personal data.
2.3 Include details of all breaches and sanctions in a comprehensive SCM annual report, which is made public.
2.4 Publish guidance from the SCM regularly and make this publicly available.
2.5 Publish general information to share details about the operation of the cap and how it is achieving its objectives.
2.6 Publish any changes to the regulations, along with a rationale for how it is consistent with the five regulatory objectives.
3. Drafting of the Regulations and Definition of Salary
3.1 The regulations should remain as a set of detailed rules, backed up by principles.
3.2 All permitted payments to players should be automatically included within the salary cap, except for a few clearly communicated exceptions.
3.3 All exceptional items to be pre-approved by the SCM, otherwise they will be automatically treated as salary.
3.4 Prohibit payments which are subjective, extend beyond a player’s playing career or come from connected parties (including sponsorship by connected parties). Any prohibited payment should result in a sanction.
3.5 Broaden the current definition of connected party.
3.6 The SCM must approve all sponsorship arrangements in advance.
3.7 Tighten provisions around player loans to ensure they are bona fide.
3.8 Review provisions for exempt (marquee) players.
3.9 Remove the provision to deem a salary. Instead allow evidence of inaccurate salary declaration to be sufficient grounds for the SCM to launch an investigation.
3.10 Strengthen emphasis on clubs seeking clarification from the SCM in relation to any uncertainty in the interpretation of the regulations. Failure by a club to do so should be treated by the disciplinary panel as an aggravating factor leading to an increased sanction.
4. Club Accountability
4.1 The entry level for points sanctions should be increased.
4.2 The disciplinary panel should be entitled to take into account a wider range of factors and be given more guidance in relation to how those factors might influence their decision and their relative weighting.
4.3 Increase sanctions for failure to co-operate to a level equivalent to the sanctions available for breach of the salary cap.
4.4 Make additional sporting sanctions available, including relegation, suspension, stripping of titles and return of prize money.
4.5 Provide the disciplinary panel with the power to install an independent monitor for consistent and serious breaches.
4.6 Increase the sanctions available to the SCM for breach of lower level regulatory breaches, including the ability to deduct 2 points, with a right of appeal for clubs before an independent disciplinary panel.
5. Player Accountability
5.1 Tie players into the regulations so that they have accountability with respect to the salary cap.
5.2 The following player obligations should be adopted:
i) Player declaration
ii) Reporting arrangements for players
iii) Onus on player to clarify arrangements
5.3 Provide sanctions for players who are in breach of their obligations under the Regulations. These sanctions should include fines and sporting sanctions.
6. Accountability of Others
6.1 Introduce a fit and proper test for club owners to be available to the Disciplinary Panel in extreme circumstances.
6.2 Define a category of “club officials” to include directors and shareholders with more than a 10% holding and each club official should register with Premiership Rugby.
6.3 Require club officials to sign a declaration confirming that they have read the Regulations and agree to abide by them.
6.4 Require a board representative to sign a declaration of anticipated and actual compliance with the Regulations.
6.5 Provide that any club official who knew, or should have known, about the breach of the salary cap and who has signed a false declaration or certification or has unreasonably failed to co-operate with salary cap regulations is subject to sanctions including a ban from Premiership Rugby for up to two years (first offence) or up to lifetime (any subsequent offence).
6.6 Require clubs to nominate a salary cap officer who has duties to the SCM.
6.7 Provide obligations for agents in the regulations that mirror those of players in relation to disclosure and obligation to co-operate with the SCM.
6.8 Add a provision to the RFU’s agent declaration that includes an agreement by each agent to comply with the regulations.
6.9 Provide sanctions for breach of the regulations by an agent, including suspension of licence, forfeiture of any commission and/or fines.
7. Powers and Resource of the SCM and the auditors
7.1 Extend system to allow central access to each club’s salary cap spreadsheet at all times.
7.2 Require clubs to provide copies of documents such as new contracts to the SCM within 14 days.
7.3 Clarify the power of the SCM to attend clubs without notice and require them to provide him with finance reports and access to management accounts.
7.4 Allow the SCM to make requests to see players’ tax returns on a random basis.
7.5 Clarify that, as a part of their annual review, the auditors are able to obtain downloads of raw accounting data from each club’s system.
7.6 Enhance the powers available to the auditors in their annual audit to include mandatory interviews, sampling of tax returns and more extensive provision of information and documents by the clubs.
7.7 Introduce sanctions for clubs that do not comply with reasonable requests from auditors within a reasonable time frame.
7.8 The SCM should work with the Rugby Players Association and RFU to provide a programme of education for players and agents so that they understand their obligations under the regulations.
7.9 Change the title of the “SCM” to salary cap director”.
7.10 Appoint a deputy SCM to assist the SCD.
7.11 Appoint a full-time data analyst.
7.12 Make investigatory audits compulsory if the SCM has reasonable grounds to initiate.
7.13 Expand the scope of investigatory audits to include broader powers of search.
7.14 Provide sanctions for any club or individual who is found to have deleted evidence post the notification on an investigatory audit.
7.15 Introduce random mini investigatory audits for two clubs every year.
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