English Premiership clubs agree to lower salary cap for 2020-21 season

(Reuters) - English Premiership clubs have agreed to reduce the salary cap for the 2020-21 season, with spending limited to 6.4 million pounds ($8.49 million), Premiership Rugby said on Friday.

FILE PHOTO: Rugby Union - Premiership - Bristol Bears v Bath Rugby - Ashton Gate Stadium, Bristol, Britain - October 18, 2019 General view of the Gallagher Premiership trophy before the match Action Images/Andrew Boyers

The cap will be further reduced to 5 million pounds for the 2021-22 campaign.

Teams will be allowed to spend 600,000 pounds on home grown players that will not count towards the salary cap, as well as 80,000 pounds on individual foreign players to cover for absences during international periods.

A total of 400,000 pounds can be spent on replacement players to cover for long term injuries, while the salaries of two senior players will be excluded from the cap.

The new regulations follow a comprehensive review led by former government minister Paul Myners, who proposed an overhaul of the salary cap.

The review was initiated after Saracens were relegated from the Premiership in January for persistent breaches.

"The strong endorsement of the salary cap in November 2019... presented us with a perfect springboard to undertake an independently-led review into the cap in order to further strengthen the system," Premiership Rugby Chief Executive Darren Childs said in a statement here on Friday.

“This review included substantial public consultation, and game-wide interviews helping us to put in place the right set of powers, obligations and sanctions for the long-term benefit of the sport.”

Teams that breach salary cap rules can be docked 50 points and incur severe financial penalties based on the size of the breach. The clubs can also face relegation and be stripped of their titles, the Premiership said.

Premiership Rugby will also be allowed to access texts, emails and bank statements of players and club officials to maintain the integrity of the system.

Reporting by Arvind Sriram in Bengaluru; Editing by Ken Ferris