Welsh clubs to use salary caps
Cardiff - Wales's four major professional clubs have agreed to operate on a salary cap from the start of next season despite seeing several leading players leave for lucrative deals with French teams.
The salary cap of £3.5m will cover players registered for European competition by the Cardiff Blues, Newport Gwent Dragons, Scarlets (Llanelli) and the Ospreys (Neath-Swansea) but does not include academy or development costs.
French clubs, many of them bankrolled by wealthy businessmen, have been able to lure the likes of Wales internationals James Hook (Perpignan), Mike Phillips (Bayonne) and Lee Byrne (Clermont Auvergne) across the Channel recently.
Several more Welsh stars are thought to be contemplating similar moves even though Wales coach Warren Gatland has warned players their Test careers could be adversely affected if they sign for either a leading French or English club.
There have been calls for the Welsh Rugby Union (WRU) - which already distributes £6 m annually to the four regions - to boost its financial support so as to prevent a player exodus.
But there are those who believe that, against the backdrop of a global economic recession, trying to match the spending of French teams poses an unacceptable financial risk for the Welsh regions.
Stuart Gallacher, chairman of umbrella group Regional Rugby Wales, said on Tuesday: "This is a significant step forward for regional rugby in Wales and the future viability and balance of our four rugby businesses that are so vital to the development and promotion of the game in Wales.
"As part of that, it is essential that every element of the circa 30m annual costs involved with operating four professional rugby businesses in European competition, is examined in detail and managed effectively.
"The introduction of this agreement and the European squad salary cap illustrates pragmatic and responsible action in tough times."
Salary caps are in place in both England and France but are significantly larger than the one proposed in Wales.
In the English Premiership, the current limit of £4m is set to rise to £4.26m from next season, but that includes development and academy costs. The cap in France is 7.1m.
Now the hope in Wales is that clubs can continue to produce talented young players such as Test captain Sam Warburton and wing George North, who helped the country reach the semi-finals of this year's World Cup in New Zealand.
"I applaud the regions for the way they have achieved this agreement with one unified voice," said WRU chief executive Roger Lewis.
"The WRU invests 6 million in cash every year to the four regions, in addition to its funding of the four regional academies, so is delighted to see the approach to build greater sustainability being taken by the regions."