Prem clubs have agreed to introduce a minimum amount each team must spend on players’ wages from next season in a bid to improve the competitive balance of the top flight.
Each club will be expected to spend £5.4m a season on talent.
The salary cap will remain at £6.4m, with ‘credits’ on offer such as for home-grown talent which stretch the restriction to £7.8m.
Failure to spend up to the ‘salary floor’ will be punished by a fine equivalent to the difference between a club’s squad spend and the lower limit, incentivising clubs to invest in their squads.
New lower figure
Several clubs are likely to need to pay more to meet the new lower figure.
Bottom side Newcastle have signed a host of new players since Red Bull took over in August but will likely need a few more to meet the wage bill threshold.
Introducing this salary cap measure is reflective of renewed confidence in the future of the Prem.
Billionaire James Dyson became co-owner of Bath this month and further investment in Prem clubs is in the pipeline.
Such prescriptions over squad spending are rare in UK sport, they are more common overseas.
The NRL, Australia‘s elite rugby league competition, requires its clubs to spend at least 95 per cent of its salary cap figure, while in American football the NFL sets it at 90 per cent.
A divide has opened up in the table this season with four teams – Newcastle, Harlequins, Gloucester and Sale – cut adrift of the play-off race with seven rounds of the season to go and with no jeopardy at the bottom, there is a risk that the league could have a number of matches with little riding on them.
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