Premiership Rugby clubs finally confirmed they had unanimously voted to temporarily reduce the salary cap in England's top-flight after the players' union warned of a legal dispute if wages were cut.
The changes, agreed at a meeting on Monday, were made in response to the "significant financial impact of the COVID-19 pandemic," according to a Premiership Rugby Limited statement.
The salary cap will be reduced in the 2021/22 campaign and return to the current level before the start of the 2024/25 season at the latest.
Significantly, the changes cover teams' overall budgets rather than individual players' contracts.
From 2021/22, the cap will be set at �5 million ($6 million, 5.6 million euros), down from �6.4 million.
Meanwhile, a compromise has been found after clubs were divided over whether to retain the 'marquee' system, which currently allows teams to have two players whose wages don't count towards the cap.
From 2022/23, this will apply to just one player, except for where a club has a current contract in place for two 'marquee' men.
- 'Best talent' -
In that case, clubs can still have two 'marquee' or excluded players until the first of their current contracts expires.
PRL said this change was "based on balancing financial sustainability while still attracting the best talent from around the world."
From 2024/25, the salary cap will return to a minimum of �6.4 million.
"The ambition for the future of the game remains unchanged," said Premiership Rugby chief executive Darren Childs.
"And as we look beyond the immediate crisis we know that Premiership Rugby has huge potential to bring people together and will grow as a sport with the players, clubs and all stakeholders sharing in that future."
Many players accepted a temporary 25 percent pay cut after professional rugby union ground to a halt in March because of the pandemic.
But the Rugby Players' Association said it was "unequivocally" opposed to making such 25 percent cuts permanent ahead of the 2019/20 Premiership season's planned resumption on August 15.
"This was unanimously rejected by the players' board," said RPA chairman Mark Lambert.
Bemoaning the lack of a "collaborative and transparent approach" from PRL, Lambert warned of a "significant legal dispute unless meaningful and genuine dialogue takes place urgently".
He also insisted it was "totally unacceptable" that players at some clubs were "being served with ultimatums" to sign amended contracts through what he called a "manufactured deadline" of June 18.
The row takes place against the backdrop of the Saracens scandal, which will see the reigning Premiership champions relegated to the second-tier next season for breaches of the salary cap.
The English Premiership is currently on hold due to the coronavirus pandemic