Leicester chief executive Simon Cohen is concerned about player welfare as a consequence of the salary cap, which will increase in 2017/18.
Cohen feels that rising wages for players across the board will eventually result in more injuries as teams have to spend big on all personnel.
Speaking to the Leicester Mercury, Tigers boss Cohen believes clubs are having to spend more than ever before to attract and keep players, which is having a detrimental effect on improving their ground for example, adding that the salary cap is already at a "dangerous level".
"There has been a significant increase in wages across the board," he told the newspaper.
"It's not just the star players that are getting significantly more, it's the squad players as well. What tends to be happening, as a result, is that squad numbers are being squeezed.
"Smaller squads are detrimental to player welfare. Players will play more games in a sport that is becoming quicker and faster with bigger hits coming in all of the time. I think the salary cap is already at a point in time where it will be dangerous for the game if it goes any higher.
"Spending, in total, on players is roughly £60m and, this season, it will be roughly £80m. That is a significant increase and a huge amount of revenue that could have gone into stands, community projects and developing the game – but it has all gone straight into the players' pockets," Cohen said.
"It is becoming much, much harder to fund the salary cap. We live in a society where people like things in front of a screen or television and even for those elements of society that actually want to go out, there are huge amounts of things to do. This puts huge pressure on attendances.
"In Leicester, for example, there is the football, the Richard III museum, Highcross, cinemas and the lovely restaurant complex. That is a lot of competition for people's pound," he added.
"As a club, you have to invest in marketing and in community because those are the elements that help bring people into the ground. But it's harder to invest when you have less of your own revenue to do so.
"We have been lucky because we have been able to build a new stand but we have a south stand (Crumbie) that is nearly 100 years old and we could do with redeveloping that. It effects absolutely everything that you want to do."