A look back at the transfer of Cheslin Kolbe from Stade Toulousain to RC Toulon in 2021 which highlighted the salary cap system, system for capping the payroll of French professional rugby clubs. Although the two clubs concerned were financially sanctioned, the LNR did not consider exceeding the salary cap. However, this case pushed the body to strengthen its rules from 2023, in particular by integrating part of the transfer compensation in the calculation of the payroll.
The salary cap system in the Top 14
The salary cap was introduced in 2010 by the National Rugby League (LNR) on the basis of article L. 132-2 of the Sports Code. It aims to limit the total payroll devoted to the remuneration of professional rugby players in order to preserve sporting fairness and the financial balance of clubs.
In 2019, the Council of State validated this system, considering that it did not "no disproportionate attack on contractual freedom or freedom of enterprise and which has no impact on freedom of association in sporting matters" (Council of State, December 11, 2019, n°434826).
If the salary cap is exceeded, clubs are exposed to financial sanctions imposed by the Specialized “Salary Cap” Section of the LNR Disciplinary and Regulations Commission.
Even without proven excess, a "breach of the general obligation of transparency and cooperation" can be punished, as in the Cheslin Kolbe transfer affair.
The salary cap was set at 11 million euros for the season 2021-2022. Since the 2022-2023 season, it has been set at 10,7 million in accordance with the provisions of article 3.1 of the Title VII of the NRL General Regulations.
Compliance with the salary cap is monitored by the LNR “Salary Cap Manager”. All amounts and benefits paid to players must be taken into account by clubs to ensure that they do not exceed the authorized ceiling.
The Kolbe affair: the question of transfer compensation at the heart of the debates
In August 2021, South African winger Cheslin Kolbe, then under contract with Stade Toulousain until 2023, requested a salary increase which the club refused.
At the time, the transfer compensation was not included in the calculation of the salary cap.
Seized in 2023, the LNR Disciplinary Commission decides to sanction Toulon with a fine of $70.000 and Toulouse with a fine of $50.000 suspended for "breach of the general obligation of transparency and cooperation".
The clubs did not appeal of this decision.
Strengthening the rules to guarantee the effectiveness of the salary cap
From the summer of 2023, even before the decision in the Kolbe affair, the LNR decided to modify its regulations to better regulate transfer compensation.
Article 3.2.1.a) of Title VII of the General Regulations now provides for the inclusion in the salary cap of the joined club of "the fraction of the compensation which would exceed the amount fixed by the text of article 41 bis of the Administrative Regulations of the LNR including the compensation paid to compensate for that attributable to the Player as compensation for the early termination of his commitments to the previous Club."
Concretely, the part of the transfer compensation between $350.000 and the total amount of salaries remaining owed to the player by his former club is now included in the salary cap of the new club, under article 41 bis of the administrative regulations.
Article 41 bis of the LNR Administrative Regulations:
« In the event that an anticipated transfer, falling within the application of this article 41 bis, gives rise, by mutual agreement, to compensation for the club left by the club joined, this will generate inclusion in the Salary Cap of the joined club - for the first season of execution of the employment contract concluded between the player and the joined club - of the amount of compensation greater than a franchise, the minimum of which is set at $350.000 (three hundred and fifty thousand euros) and the maximum is set at the total amount of gross salaries (hereinafter the “Total Amount”) which would have been paid by the left club to the player, until the end (hereinafter the Term) of the player's contract or amendment in the left club.
To determine the Total Amount and the Term of the contract referred to above, the player's last contract or amendment approved by the Legal Commission or the LNR during the season preceding the conclusion of the early transfer agreement will be taken into account. Excluded from the Total Amount are all bonuses other than those for ethics and attendance, as well as any other sum or benefit, in particular any remuneration for image rights. »
On the same theme, see the following articles:
[16.01.2020]
[14.02.2022]
