The state Council, by a judgment of December 11, 2019, considered that the salary cap or cap on the payroll, introduced in France in 2010 by the National Rugby League, did not carry "no disproportionate infringement of contractual freedom or the freedom to undertake and which has no impact on the freedom of association in sporting matters."In order to preserve the sincerity and fairness of the championships, an important economic regulation was, little by little, put in place. Explanation of the system taking the example of the NBA and the NRL.
In order to preserve the sincerity and fairness of the championships, an important economic regulation was, little by little, put in place. Explanation of the system taking the example of the NBA and the NRL.
The American example of the NBA
La National Basketball Association, the professional North American basketball league, introduced in 1984 a new method of controlling the total payroll of teams with a double objective:
- restore profits within the League, losing momentum at the start of the 80s, by tracing the evolution of player salaries on the evolution of franchise income;
- maintain the balance between the different teams by limiting the financial power of the largest franchises on the transfer market.
Initially the amount of salary cap had to be the same for all clubs. However, under pressure from the powerful players' union, many exceptions (Larry Bird exception, Mid-level exception, except rookie,…) Have been implemented. Therefore, the salary cap can vary greatly between different teams which reduces its effectiveness in rebalancing the competition. He was therefore described as soft cap (unlike the hard cap in the NFL, the American football league, where no overtaking of the salary cap is not allowed). Other systems have also been put in place to supplement it (luxury tax, individual salary ceilings, etc.).
To ensure compliance salary cap, each contract signed by the teams must be validated by the commissioner NBA later in 48h of the signing.
Failure to comply with these obligations results in different sanctions for the player and / or the team. This can be a fine, the loss of a draft round or even the cancellation of the contract.
The French example of the National Rugby League (LNR)
The National Rugby League was the first French professional league to introduce this system for the 2010-11 season. This salary cap capped at a maximum amount the payroll players of rugby clubs always with this objective specified in the "regulation of the player payroll cap": avoid deregulation of the market and of the economy of professional rugby clubs, an essential element for preserving the fairness of competition.
Setting up the device
On the basis of Article L. 132-2 of the Sports Code, the LNR's Management Committee has established a limitation on the total payroll devoted to the remuneration of players. This article says, "the federations which have set up a professional league create within themselves an organization, endowed with an independent power of appreciation, empowered to refer the matter to the competent disciplinary bodies and having the following missions: 1 ° To ensure the administrative, legal and financial control of sports associations and societies which are members of the federation or the professional league or apply for membership in the federation or the league; 2 ° To ensure the financial control of the activity of sports agents; 3 ° To ensure the control and evaluation of plans for the purchase, sale and change of shareholders of sports companies."
It is therefore a question of fixing a maximum amount in absolute value of remuneration that a club cannot exceed.
Determination of the ceiling
It is determined by the LNR Management Committee.
In 2018, the LNR Steering Committee set the salary cap amount at 11,3 million euros for the next three seasons.
Determination of the elements of remuneration to be taken into account
Definition of payroll
It should be noted that the framework only concerns the players' payroll. Administrative staff and trainers are therefore excluded.
The players' payroll corresponds to the sum of the gross remuneration, excluding employer charges, paid to players under a professional or multi-active contract and to hopes.
As remuneration, any form of remuneration, in cash or in kind, immediate or deferred, direct or indirect, must be understood to include:
- gross salary and gross premiums of all kinds,
- the part of the remuneration paid in the form of collective image rights,
- benefits in kind,
- the sums paid in return for the exploitation of the right to individual image,
- ...
Special situations
Control procedure
The League has set up a Controller, the salary cap manager, who is an independent professional. He is appointed because of his skills, independence and experience.
He controls the respect of the ceiling by each club. To do this, it carries out controls and audits and draws up a report which it then transmits to the Control Committee for Professional Clubs (CCCP) of the DNACG.
Penalties for non-compliance
Sanctions are pronounced by the Superior Council of the DNACG, referred to by the CCCP, either for non-compliance with the provisions relating to control procedures and the production of information, or for non-compliance with the provisions relating to the cap on player payroll.
These sanctions are 4 type:
- pecuniary fines,
- withdrawal of points in the championship classification, demotion to the lower division
- non-approval of new contracts during one or more seasons (ban on recruiting)
- several of these measures combined.
The sanctions may be increased in the event of non-regularization within the time limit set by the Superior Council.
