French flexing financial muscles

WITH four Top 14 sides in the Heineken Cup quarter-finals, this is shaping up to be the ‘Year of the French’ and it’s a surge sourced by economics off the pitch as much as élan or elbow grease on it.

Fluctuations in the sterling/euro exchange rate are fuelling the growing French dominance in European club rugby, and it is England’s Guinness Premiership which appears to be suffering most in the new order.

The proof is in this weekend’s fixture list. Northampton will be the only English representative, while Ireland provides the second largest contingent thanks to Munster and Leinster’s progress through the group stages.

There are a number of reasons for the shift of power across the Channel. Between January 1, 2008 and January 1, 2009, the pound slumped in value against the euro from €1.36 to €1.03, and one of the net results has been a drain of talent from the Guinness Premiership to the Top 14.

British players are now simply much better value for French clubs, whose wage bills are limited to 52% of their forecasted operating budget, plus or minus any shortfall or overshoot from the previous year.

In addition, a new tax measure applicable to individuals moving to France after January 1, 2008 is understood to have led to some leading players paying less income tax than they would in Britain on similar wages. That will shock those who think of France as a repository of high taxes, although it’s an innovation likely to strike a chord with those familiar with the Irish tax rebate provisions for pro sportspeople here. The so-called ‘McCreevy tax break’, introduced for sportspeople in late 2001, has been an important impediment to French clubs cherry-picking players left, right and centre across the Irish Sea.

Retained to huge sighs of relief last September after the latest Commission on Taxation Report, the carrot for players playing here is that they can claim back 40% of their tax paid over the course of their best 10 years.

That is a sizeable incentive for top players in Ireland whose annual earnings can hit the €200,000-mark and it is no different for the average pro who might earn €50-€60,000 in the same 12 months.

“The success of the teams, Munster and Leinster, is one obvious thing that is keeping players here,” said Niall Woods, chief executive of the Irish Rugby Union Players Association. “The McCreevy thing is huge as well.

“That has nothing to do with the IRFU but they are benefiting from it. The (Felipe) Contepomi move to Toulon is the perfect example. They could simply pay so much more than Leinster and I know what Leinster were offering was huge. They were able to pay him more than he would have picked up (in tax breaks) for eight years playing in Ireland and any normal player would be able to make up for it in two years in France.”

With Brian O’Driscoll again raising the possibility of a future switch to France this week – where, he hinted, he may link up with Michael Cheika at Stade Francais after next year’s World Cup – this is once again a live issue, but there are more than just tax incentives to keep a player at home.

The IRFU’s widely-applauded game management of their employees offers the best bet of a lengthy career and there is also the awareness that players would not be able to earn as much commercially living elsewhere.

That doesn’t mean they aren’t considering every option. According to Woods, there is enough anecdotal evidence to suggest players are giving serious thought to offers they might have dismissed out of hand only two years ago.

The reality is that the switch to France, or England, would appear to suit the less established stars more – someone like Timmy Ryan who swapped life in Munster for a new beginning in Toulon last summer.

France is also contemplating a tax break similar to that in place here and the age profile of players making the move to Top 14 lends credence to the inherent attraction of a new challenge.

“Most of the players coming are 28 or 29,” says Simon Gillham, chief executive of Brive, which has Riki Flutey, Jamie Noon and Steve Thompson on its books. “They want a life experience, to embrace a new lifestyle.”

However, with the tough economic climate also biting in France, salaries are coming down. In addition, the French league is to introduce quotas to promote homegrown talent, while 2011 World Cup duties will make English internationals less attractive to the moneyed ranks in France.

Who knows, maybe then, all eyes will turn to Ireland.