Kiwis adopt salary cap
2 Jun 2006
The New Zealand Rugby Union will implement a salary cap in domestic competition for the first time this season.
The union gained approval for the measure from a government business watchdog.
The cap, the limit of which has not been disclosed, will take effect immediately and will apply to the 14-team Air New Zealand Cup, involving New Zealand’s top provincial sides, which will be played from 28 July.
The Commerce Commission said the cap had been approved for an initial period of six years and would be subject to review after five. The New Zealand union will be responsible for its monitoring and enforcement.
The union argued a salary cap was needed to ensure an even spread of players to produce more competitive matches and higher television audiences for the new, fully professional competition.
The approval of the Commerce Commission was needed because a salary cap could be deemed an anticompetitive practice.
“We have maintained throughout the process that we had a convincing case for the salary cap and today’s decision confirms that the Commerce Commission agrees,” union deputy chief executive Steve Tew said.