How long will the CVC money last... and what then?

[Daeg]

There 'appears' to be a lot of player movement in the Premiership at the moment and lots of talk (rumours) about massive increases in wages due to CVC money allowing some clubs to finally pay up to the cap. But I am left wondering (if that is the case) how long this will last. Presumably the CVC money will only last so long and then after that what happens? If the clubs in question couldn't afford to pay up to the cap before CVC how will they manage after the money runs out? Will we see in 3-4 years a sudden flood of formerly well payed players flogging their rolexes and going on strike because they are being told they have to take a pay cut!! 

[Neils]

Clubs would be exceedingly stupid to commit CVC money to players wages now. I think I read that if the agreement is signed by all parties the fiorst tranch of money is not due to be paid until 2019/20 season commencement. May be wrong but the media announcement was not the deal.

[Fats]

Daeg,

Totally agree with you.  I thought that the CVC money couldn't be used for players salaries?

I appreciate that it can be used indirectly by using the CVC money to pay something that frees funds up to be used for salaries but it's like giving an alcoholic money for drink or a smack user money for drugs. ie short term "relief" but a bigger longer term problem.

[BG]

I don't think clubs have been "told" they can't use the money on wages but encouraged not to. Some may splash the cash on marquee players but the salary cap is frozen for a while so theoretically most clubs couldn't spend it anyway. You would hope clubs will invest in infrastructure.

What the clubs may do is use a portion of the lump sum for a few years to plug the ineviatble drop in income caused by CVC taking their share (25%?) of the PRL payment to all the clubs.

What the clubs will be hoping is that CVC can increase the overall PRL income to cover what CVC are taking back out on a yearly basis.

I doubt that will happen over night and may take 5 yrs to achieve (which I think is questionable.. where are the new markets to extract money from and will Sky or BT be prepared - given viewing figures - to pay anymore than they currently are).

Initially every club's income from PRL will drop which is where clubs may use a portion of the lump sum to balance the books and bring thei income back up to where it was before the CVC share buyout

Of course if CVC take more money out than they can increase the PRL income then the clubs will lose out by receiving less each year.

But.. the clubs all voted for it so they must be confident in the plans been given to them.

[jamestaylor002]

I'm not really sure what to make of the CVC investment, in all honesty. I am in full agreement with all comments made previously to mine. I am also worried that this increased financial support is used incorrectly and we see more money being thrown around resulting in very large wages rather than infrastructure investment and a more football-esque sport.

[InBetweenWasp]

This is probably the last year that players are able to make a significant jump in salary - As within a season, almost all clubs will be operating at the cap so will make wiggle room a lot more difficult.

That’s why we’re seeing reasonably big money moves to clubs like Gloucester, Sale and Bristol who haven’t otherwise operated at the cap now being able to offer significant increases.

So it’s almost a now or never (within reason) move for most.  I think we’ll see things far more settled in the future with an emphasis and importance put on academies for all the teams.  I think a lot of clubs would be sensible to invest CVC money in that. 

We certainly would be.

[jamestaylor002]

This is probably the last year that players are able to make a significant jump in salary - As within a season, almost all clubs will be operating at the cap so will make wiggle room a lot more difficult.

That’s why we’re seeing reasonably big money moves to clubs like Gloucester, Sale and Bristol who haven’t otherwise operated at the cap now being able to offer significant increases.

So it’s almost a now or never (within reason) move for most.  I think we’ll see things far more settled in the future with an emphasis and importance put on academies for all the teams.  I think a lot of clubs would be sensible to invest CVC money in that. 

We certainly would be.

+1 for academies.

[wasps]

I absolutely agree that we want to invest in the academy to ensure that we have a constant influx of new players.

However, why does everyone feel that academy players offer better value?

Let's take Jack Willis as an example (ignoring his injury)
He's been detected in the England squad.
If he continues to improve over the next coupe of years he could become an England regular, and who knows, maybe a Lion too.

Do you really think he'd be any cheaper for us as an established international than any other international back row?

[Tervueren]

I don't suppose they end up being cheaper. However, I get pleasure from seeing players developing through from the academy that I don't get from seeing a player come here for a couple of years and then leaving. Note, I am not saying that the likes of Beale have not given me a great deal of enjoyment, just that there is something a bit special about "one of ours" coming through.

However, the greatest pleasure is from seeing great Rugby so we have to strike an appropriate balance.

[InBetweenWasp]

Depends how we look at cheaper, but he’d be more economically viable surely.

- We get a dispensation on the salary cap for home being a homegrown player
- He’d likely be on relatively low salaries for his first few contracts before gaining a bigger salary - at which point, he’d most likely be on a like-for-like salary as recruiting an international / international calibre player in the same position.

Perhaps take Willis v Sheilds as a real-world example.  Jack last year was performing arguably at a higher level than Brad has this year yet is almost certainly on a significantly lower salary than Brad (currently).  Who knows how long it’ll take him until he’s at parity, if he’ll even get to parity (or past Brad).

Ergo i’d suggest Jack is better value than recruiting an established international. 

[Raggs]

Launch wouldn't qualify as a home grown player for us. Basically he's worth as much cap credit to Sale, as he is to us, with his missed games due to England duties.

Jack is worth more to us than others, unless he becomes an established durable international. Once a player misses 16 games due to being an international, they're worth the same to everyone.

Quick back of the envelope count would be that only 14? games are missed due to being and England player? 5 from Autumn (3 games, 1 prep week, 1 rest week), then 9 for 6N (5 games, 1 prep week, 2 mid tournament weeks, 1 rest week after?). So upto £70k (£5K per missed game for England internationals), max home grown and intenrational allowance on a single player is £80k.

So having done all that, a home grown player, who's an established England player, is perhaps only worth £10k more to his home team, though it will vary.

[JonnyD]

Rumours on twitter that Launchbury too has the ‘Daly clause’ in his contract.

Unless him or his wife have family that way I’m not sure why he’d want to head to Sale

[Heathen]

Rumours on twitter that Launchbury too has the ‘Daly clause’ in his contract.

Unless him or his wife have family that way I’m not sure why he’d want to head to Sale

Bright lights of Manchester!

[Brandnewtorugby]

Isn't the benefit of a strong academy less about unearthing the odd international level player and more about having a core of very good players that don't expect dramatic pay rises, at least for a few years. Players that can hold their own in the premiership, but would not feel on the verge of a call up. I think Exeter have been clever, perhaps helped by their style of play, to keep some of their very good players under the radar for so long.

[BG]

The evidence seems to suggest that having a strong academy, bringing young players through with the occasional wise signing of an an experienced  player is the way to go.. Sarries and Exeter being the example. The slight caveat to that is Sarries, especially, can attract the best of the young u18/19/20 talent due to the recent successs they've had.

For a very good academy prospect, a club may get 2 contract periods from a player who can hold his own in the premiership but is a fraction of the cost of more experienced players. If a player progresses to the final step, to become an international then obviously the 3rd contract is going to increase massively, at which point the player may want to move on or stay with the club that he is familiar with

An example for us would be Jack Willis and Haskell. Prior to his injury Willis was probably performing at a higher level than Hask, but I wonder what the wage difference ratio was.. 1 - 5 (20%)