Wage cap - Updated with news on Saracens Punishment

by No 7&1/2 Tue 05 Mar 2019, 9:30 am

First topic message reminder :

Saracens have made the following statement.
"
Club Statement - Co-investment partnerships between the Saracens owner and players.

Following a newspaper article, the Club would like to make the following statement:

“Firstly, we would like to reiterate that the Club readily complies with Premiership Rugby salary regulations and information relating to remuneration is declared to the salary cap manager. Although co-investment partnerships between owners and players are not a prerequisite of the salary regulations, we disclose these transactions to Premiership Rugby and will continue to do so.

“Currently, 57% of the men’s squad is comprised of home grown talent - the highest in the Premiership. These players not only produce results on the pitch, they help entitle the Club to £1.2m in credits above the baseline salary cap from the RFU and Premiership Rugby. This is a direct result of our significant investment in the Saracens Academy which nurtures and develops Saracens and England players of the future.

“A professional playing career in rugby can be short. We have a responsibility to help our players fulfil their potential, not just on the pitch but off it too. It is why our Academy incorporates an education programme that actively prepares players for life beyond the sport. We are encouraged that many of our senior players are exploring business opportunities away from rugby.”

To me it just seems to be we're doing good work for the England team so don't pry!

by No 7&1/2 Thu 23 Jan 2020, 6:09 am

The added line of no player was aware of any wrongdoing...in terms of total wage bill that may be true but what did itoje think he was getting the 30 k s for? The wordling of deliberate seems a touch misleading as well in that they probably though they'd found a legal way to circumnavigate the rules:hardly a moral one sticking to the spirit.

by No 7&1/2 Thu 23 Jan 2020, 6:37 am

The itoje payments weren't paid as an event per event payment just for services retained apparently.

by Khouli Khan Thu 23 Jan 2020, 6:56 am

Soul Requiem wrote:
Rugby Fan wrote:
Khouli Khan wrote:You better believe they knew what was going on - you can't seriously expect a sensible person to believe that each Saracens player signed up to a massive salary and assumed everyone else in the game was getting paid the same....

A number of ex-players have said they never knew what anyone else was being paid, and they wouldn't have seen it as their personal priority to find out.

I'd like to hold Saracens players to account for not realiizing how their squad must have looked too expensive. Then again, the PRL had a salary cap manager, so it's not unreasonable to think this man should have had more information than anyone else.

I don't know what my colleagues get paid so why would a rugby player, I don't suppose until recently that the likes of Farrell and Itoje gave it much thought.

As has been said, I didn't really mean that each Saracens player knew what all his team mates were being paid individually. But they did know (unless they were complete fools) that collectively, the club was under suspicion of overspending. It is absolutely ridiculous to suggest that a player signing up to a £300K contract wouldn't think, "either we're all earning this much and the salary cap is well busted", or, "well everybody else must be earning less than me - otherwise, we'll be busting the salary cap".

Rumored salaries were all over the media, talked about at length practically during every televised match by pundits and it seems, weren't too far from being accurate. The fact that the PRL had a salary cap manager supposed to 'manage' this aspect of the game, but that it wasn't uncovered for three years until some random reporter exposed it absolutely stinks of corruption and collusion root and branch in the Saracens team and in the governing bodies.

And, when I talk about corruption, I do not necessarily mean corrupt in the dishonest sense (although i'd put the farm on it myself) - but corrupt in the sense that its broken or malfunctioning. Either way, it is wholly unacceptable.

I have absolutely no doubt that every player, coach, board member at Salarysins and responsible officials elsewhere colluded to some degree in this mess because they assumed that English Club and International success was more important than the integrity of the sport and that as a result if they were found out, it would be dealt with less harshly. Not to agree this assumes that everybody involved was ignorant of what went on and stupid enough to think they would go unpunished. People can defend them all they like - but they all knew they were cheating, and they're all guilty of it.

I would rather English rugby spent 10 years rebuilding its integrity and trust and gaining success the hard way than win one 6N or WC with cheats and corrupt governing bodies.

by No 7&1/2 Thu 23 Jan 2020, 7:05 am

England arent affected by saracens paying over the cap. Not positively anyway. A case could be made that should players such as tomkins be involved in a lesser squad they would have received more time on the pitch or moved to another club and been capped by england by now.
Finally starting to add detail to your thoughts though. Well done khan. Have a cookie.

by carpet baboon Thu 23 Jan 2020, 7:13 am

As one of the podcast said earlier this week, if you were concerned that payments may contravene the salary cap, why not ask the salary cap manager? Would have been cheeper than the £3000 per hour they were paying .
Unless you knew it was against the cap and wanted legal advice as his best to hide/defend these payments.

by **Rugby Fan** Thu 23 Jan 2020, 7:40 am

Khouli Khan wrote:...The fact that the PRL had a salary cap manager supposed to 'manage' this aspect of the game, but that it wasn't uncovered for three years until some random reporter exposed it absolutely stinks of corruption and collusion root and branch in the Saracens team and in the governing bodies...

Well, reports now say that the cap manager was looking into the issues at the same time as the Mail on Sunday reporter. Other clubs, notably Quins, are said to have supplied the cap manager with information they had. Seems the clubs felt the he didn't have the resources to conduct a proper investigation, so did some of the legwork for him. Wouldn't surprise me if someone also steered the Mail on Sunday to looking at Companies House.

Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

by Khouli Khan Thu 23 Jan 2020, 7:48 am

Rugby Fan wrote:
Khouli Khan wrote:...The fact that the PRL had a salary cap manager supposed to 'manage' this aspect of the game, but that it wasn't uncovered for three years until some random reporter exposed it absolutely stinks of corruption and collusion root and branch in the Saracens team and in the governing bodies...

Well, reports now say that the cap manager was looking into the issues at the same time as the Mail on Sunday reporter. Other clubs, notably Quins, are said to have supplied the cap manager with information they had. Seems the clubs felt the he didn't have the resources to conduct a proper investigation, so did some of the legwork for him. Wouldn't surprise me if someone also steered the Mail on Sunday to looking at Companies House.

Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

It just gets better..... picard

by **Rugby Fan** Thu 23 Jan 2020, 9:20 am

Khouli Khan wrote:
Rugby Fan wrote:Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

It just gets better.....

That's only Haskell's opinion.

by BamBam Thu 23 Jan 2020, 9:44 am

There's a bit more detail in the Sky article, where it appears the news broke last night -

https://news.sky.com/story/revealed-how-saracens-broke-rugbys-salary-cap-rules-11915269

The bit about Itoje's image rights company doesn't quite stack up. If PwC valued the rights at £1.6m, does a subsequent alternative valuation mean that Saracens are in breach? The normal terms of these things mean that independent valuations are enough reassurance that something is being done on commercial terms.

If PwC have fecked up or been coerced by Saracens .. why are they still advising and auditing PRL?

by R!skysports Thu 23 Jan 2020, 9:48 am

Rugby Fan wrote:If the report leak is accurate, then Brendan Venter is right that the cap breach was not as severe as some rumours suggested. Still a breach, though.

https://www.telegraph.co.uk/rugby-union/2020/01/22/saracens-confident-keeping-hold-england-stars-talks-eddie-jones/

The extent of Saracens’ abuse of Premiership Rugby’s salary cap was laid bare on Wednesday night as details of Lord Dyson’s report were leaked.

In November, English and European champions were hit with a 35-point deduction and a £5.36million fine for breaches of the league’s £7m salary cap over a period of three seasons. Saracens have since accepted a further punishment of relegation to the Championship after refusing to open their books for a forensic audit.

However, details of the breaches have remain shrouded in secrecy with only an edited summary released to the public. On Wednesday, Premiership Rugby had agreed to release the report after new Saracens chairman Neil Golding called for its publication, but were usurped after details of the 103-page document were reported by Sky News. Premiership Rugby intended to release a redacted report later this week.

According to the report, Saracens’ broke the cap in three successive seasons: by more than £1.1m in 2016-17, by nearly £100,000 in 2017-18 and by £906,000 in 2018-19. During that period Saracens won two Premiership and two Champions Cup titles.

The overpayments centre on payments totalling £1.3m made by former chairman Nigel Wray into joint property ventures with several leading players. According to Sky News, these included:

1. A payment of £250,000 into Maro Itoje’s company. It is alleged that the England lock received three lump sum payments of £30,000, £30,000 and £35,000 for hospitality work for which there was no evidence that he attended. The report states that Wray also overpaid for shares in Itoje’s image rights company
2. A £450,000 investment into Vuniprop, a company majority-owned by Billy and Mako Vunipola. A house bought by Vuniprop was part funded by a 33% interest free loan by Wray
3. A breach of £319,600.76 for a £1.4m property bought by former player Chris Ashton

There is no suggestion that any of the players were aware of any wrongdoing. The Sport Resolutions disciplinary panel, led by Lord Dyson, also accepted that the breaches were “not deliberate” but they were “reckless”. It recommended that the club should not be relegated and instead impose the points deduction and fine.

Wray’s defence was the property co-investment payments did not amount to benefits in kind as the equity could have risen or fallen. Telegraph Sport understands that the club were being billed for legal advice costing £3,000 an hour that buoyed Wray’s confidence until they conceded they were unlikely to win a challenge.

This makes my blood boil if true. As a successful business man there would be almost no way he would believe that.

My company makes us to ethical training every year and this sort of this is clear a day

It reminds me of the tax 'avoidance' schemes that the rich and celebs have used. They know 100% they are morally wrong, but they have very expensive legal and tax teams ripping apart the rules to find loop holes (if you end up paying 1% tax you KNOW that it is not how it should be)

The lack of contrition really is turning me against Sarries and if the report comes out to back the details above and their 'defence' I think that getting dropped for a year is the least they should get - maybe relegated one league for every year they breached

And for players 'not knowing' - if my boss came to me to offer to pay for my house - i would know there was something dodgy going on.

Plus, do we know if the player declared this on their tax returns?

by Khouli Khan Thu 23 Jan 2020, 10:01 am

Rugby Fan wrote:
Khouli Khan wrote:
Rugby Fan wrote:Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

It just gets better.....

That's only Haskell's opinion.

I think he should be made to back it up.

by quinsforever Thu 23 Jan 2020, 10:07 am

Risky - i haven't seen it suggested there are any tax issues with any of this

and if Lord Dyson accepted the payments were not "deliberate", merely "reckless", then i don't think your comments apply. plus they got them cleared by their own counsel.

clearly Wray, based on the advice he got, still thought the payments obeyed the letter of the salary cap regs, if not the spirit, as shown by his willingness to contest Dyson's penalty, right up until his advisers changed their mind on the strength of his case.

I think people are getting a bit too emotional about this.

yes, in hindsight, Saracens were over the cap. they were aggressive in co-payment schemes, and guess what, there was a difference of opinion between lawyers about that. no shocker there. the jury of the other 12 PRL(+ newcastle) clubs have now effectively doubled the points penalty all because Saracens wouldnt hand back their last two premiership titles. nothing to do with opening their books IMO.

so maybe people should just calm down a bit. no crime has been committed. Saracens look bad yes. but so do the PRL!

England have benefited significantly from having the core of their team play together consistently IMO. and i have loved watching Sarries win the Champs Cup, something the other english teams were absolutely nowhere near doing.

by **Rugby Fan** Thu 23 Jan 2020, 10:11 am

Khouli Khan wrote:
Rugby Fan wrote:
Khouli Khan wrote:
Rugby Fan wrote:Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

It just gets better.....

That's only Haskell's opinion.

I think he should be made to back it up.

He did. However, he was talking about a period before 2015. You'll hear other opinions, especially from team owners, that the 2015 investigation showed trust was insufficient, and they had committed to stronger enforcement. Current outcome shows that was still insufficient.

by R!skysports Thu 23 Jan 2020, 10:37 am

Quins -see every time I hear the comment 'they thought they were doing it right as they go legal council' used to justify it as simply a mistake that anyone could make

i hear

they got legal council to see how they could get away with it and they thought they had found a way

Maybe a cynic - but like the politicians expense scandel, it sticks in my throat as cheating and however you flower it up - it was cheating

The fact 2 months after they were fined they were still making it like they were the victim has not helped neutrals like me come to their side

by TightHEAD Thu 23 Jan 2020, 10:38 am

[quote="quinsforever" i have loved watching Sarries win the Champs Cup, something the other english teams were absolutely nowhere near doing.[/quote]

I wonder why that was?

They are cheats and should be stripped of all titles.

by **LondonTiger** Thu 23 Jan 2020, 11:24 am

Rugby Fan wrote:
Khouli Khan wrote:
Rugby Fan wrote:
Khouli Khan wrote:
Rugby Fan wrote:Haskell said he felt the cap was largely based on trust, rather than forensic investigation, which is why so many are upset at the breach of trust.

It just gets better.....

That's only Haskell's opinion.

I think he should be made to back it up.
He did. However, he was talking about a period before 2015. You'll hear other opinions, especially from team owners, that the 2015 investigation showed trust was insufficient, and they had committed to stronger enforcement. Current outcome shows that was still insufficient.

Slightly hard to enforce when the clubs decided not to allow a bigger budget to the Salary Cap department - meaning it was one person doing a largely administrative job.

by king_carlos Thu 23 Jan 2020, 12:34 pm

carpet baboon wrote:As one of the podcast said earlier this week, if you were concerned that payments may contravene the salary cap, why not ask the salary cap manager? Would have been cheeper than the £3000 per hour they were paying .
Unless you knew it was against the cap and wanted legal advice as his best to hide/defend these payments.

A very good question. When the story first broke Sarries said that the salary cap manager was informed. Then that it was an administrative error. Now that question seems to be getting ignored.

by Scottrf Thu 23 Jan 2020, 1:21 pm

This is the inevitable consequence of the brushing it under the carpet all clubs subscribed to in 2015. That was a disgrace then and none of this is really a surprise now.

by **Rugby Fan** Thu 23 Jan 2020, 1:22 pm

Dyson report here:

https://media-cdn.incrowdsports.com/fa097ce0-fc01-4b01-bbb0-e147ffa67de6.pdf

by Scottrf Thu 23 Jan 2020, 1:56 pm

quinsforever wrote:Risky - i haven't seen it suggested there are any tax issues with any of this

and if Lord Dyson accepted the payments were not "deliberate", merely "reckless", then i don't think your comments apply. plus they got them cleared by their own counsel.

clearly Wray, based on the advice he got, still thought the payments obeyed the letter of the salary cap regs, if not the spirit, as shown by his willingness to contest Dyson's penalty, right up until his advisers changed their mind on the strength of his case.

I think people are getting a bit too emotional about this.

yes, in hindsight, Saracens were over the cap. they were aggressive in co-payment schemes, and guess what, there was a difference of opinion between lawyers about that. no shocker there. the jury of the other 12 PRL(+ newcastle) clubs have now effectively doubled the points penalty all because Saracens wouldnt hand back their last two premiership titles. nothing to do with opening their books IMO.

so maybe people should just calm down a bit. no crime has been committed. Saracens look bad yes. but so do the PRL!

England have benefited significantly from having the core of their team play together consistently IMO. and i have loved watching Sarries win the Champs Cup, something the other english teams were absolutely nowhere near doing.

Yes it has. It's illegal under competition law.

by Gooseberry Thu 23 Jan 2020, 1:57 pm

Dyson doing the report should see it all come out in the wash and nothing swept under the carpet anymore and less hot air being blown about it.

by **Rugby Fan** Thu 23 Jan 2020, 1:57 pm

Just going through it now. Seems Saracens main defence was to call into question the legality of the salary cap. At the same time, however, Saracens CEO and Wray both said they thought a salary cap was a good idea, which somewhat undermined their case (they did say the current cap regulations were unfit for purpose).

A very large part of this report is about the legality of the process itself.

by WELL-PAST-IT Thu 23 Jan 2020, 2:06 pm

So, it appears that Sarries players and Wray jointly bought properties, the Player via a commercial mortgage for a percentage of the property, Wray funding the rest. Both parties then own a proportionate share. Wray then advanced further monies to renovate the property as a loan, but interest free.

First charge was to the players lender, second Wray for his initial share and third Wray for the refurbishment costs. So Wray is taking all the rsik and not recovering some interest on the refurb loan.

The panel has decided that as the player is effectively taking no risk; the value unlikely to drop to a level below the players investment, that all the money put up by Wray, as it was not repaid within a year, is counted as wages. Wray still owns a third of the value of the properties, not the player.

The only fair way of valuing this would be to have the properties valued and if the value has dropped, then the drop be regarded as income.

What the judgement is effectively saying is that no player can go into business with any shareholder in the club he/she plays for, if the shareholder is to contribute any money to the company as that money is regarded as wages, if the shareholder is taking a bigger risk, despite the shareholder owning their share of the business.

by Scottrf Thu 23 Jan 2020, 2:09 pm

Yeah that's a strange one. A loan is not a salary.

by Gooseberry Thu 23 Jan 2020, 2:10 pm

WELL-PAST-IT wrote:So, it appears that Sarries players and Wray jointly bought properties, the Player via a commercial mortgage for a percentage of the property, Wray funding the rest. Both parties then own a proportionate share. Wray then advanced further monies to renovate the property as a loan, but interest free.

First charge was to the players lender, second Wray for his initial share and third Wray for the refurbishment costs. So Wray is taking all the rsik and not recovering some interest on the refurb loan.

The panel has decided that as the player is effectively taking no risk; the value unlikely to drop to a level below the players investment, that all the money put up by Wray, as it was not repaid within a year, is counted as wages. Wray still owns a third of the value of the properties, not the player.

The only fair way of valuing this would be to have the properties valued and if the value has dropped, then the drop be regarded as income.

What the judgement is effectively saying is that no player can go into business with any shareholder in the club he/she plays for, if the shareholder is to contribute any money to the company as that money is regarded as wages, if the shareholder is taking a bigger risk, despite the shareholder owning their share of the business.

This vastly different to what clubs were doing toward the end of the "amateur" era.

I'm wondering how much HMRC are following this, the tax implications must be incredibly complex.

by Gooseberry Thu 23 Jan 2020, 2:10 pm

Scottrf wrote:Yeah that's a strange one. A loan is not a salary.

Neither is a bonus or a date with Charlotte Church. Caps never just cover salary for exactly that reason.

by Scottrf Thu 23 Jan 2020, 2:12 pm

Gooseberry wrote:
Scottrf wrote:Yeah that's a strange one. A loan is not a salary.

Neither is a bonus or a date with Charlotte Church. Caps never just cover salary for exactly that reason.

A bonus is a payment which is not returned, easy to see why that is part of income that is relevant to the salary cap.

The only applicable amount for the loan should be the waived interest at market rates, not the capital.

by **Rugby Fan** Thu 23 Jan 2020, 2:29 pm

Scottrf wrote:Yeah that's a strange one. A loan is not a salary.

That's not what the cap regulations say, however. They say a loan should be considered as salary, unless it is repaid within the salary cap year, or it can be shown why that condition should not apply. The cap manager decided, on the 16 factors set out in the agreement, that there were not good enough reasons why it should not be treated as salary. Dyson agreed with his interpretation (Page 48, paragraphs 182 & 183). They were not "arms length transactions between commercial parties".

by **LondonTiger** Thu 23 Jan 2020, 2:49 pm

Reading the report leaves me thinking:

1) In general Saracens were correct when they stated the overspend was CapEx stuff.
2) The breaches are perhaps overstated as in general the value of the "loans" to the players does not match the amount that goes against the salary cap. In general it would be better to use the value gained by the player rather than the loan into a joint company - however as per the regulations they have applied the rules.
3) The players have not received monies in line with the scale of the breaches.
4) I struggle though to agree with the panels view that this was not a deliberate attempt to circumvent the cap
5) What was disclosed in teh previous breaches does not explain away this season's breach. That Sarries are not willing to open their books suggest a different "accounting policy" was being used.

by nathan Thu 23 Jan 2020, 2:53 pm

Should point out that this report is only for past seasons and not this season which leads to the questions of;

What went on after this report for Sarries to choose relegation over a full audits of their accounts

by WELL-PAST-IT Thu 23 Jan 2020, 3:00 pm

But it is not a loan, Wray took the appropriate portion of the property, he owned 33% of the property, or to be precise 33% of the company that bought the property. It was not a personal loan. The refurbishment costs were a loan to the company and interest free. He did n't increase his equity, but presumably he increased the value of the property and therefore did benefit.

Can some bright spark tell me how a "loan" to a private company in which he is a shareholder, becomes wages if not repaid within the SCY. Especially if he benefits. If he repays the "loan" the year after does that count as a negative against the cap, if not it is grossly unreasonable and that would have been a better ground to appeal on.

A lot of what they are picking up on are small advantages players got from options to buy etc, £10-20K a time. If you are going into that detail, should clothes, cars etc provided by sponsors also count towards the salary cap?

It seems to me that we as ordinary people can see also sorts of problems with the SC rules and the effects they would have, how come these high rollers and their lawyers did not?

by **Rugby Fan** Thu 23 Jan 2020, 3:52 pm

WELL-PAST-IT wrote:...Can some bright spark tell me how a "loan" to a private company in which he is a shareholder, becomes wages if not repaid within the SCY...

That's what the salary cap agreement specified.

by R!skysports Thu 23 Jan 2020, 4:16 pm

WELL-PAST-IT wrote:But it is not a loan, Wray took the appropriate portion of the property, he owned 33% of the property, or to be precise 33% of the company that bought the property. It was not a personal loan. The refurbishment costs were a loan to the company and interest free. He did n't increase his equity, but presumably he increased the value of the property and therefore did benefit.

Can some bright spark tell me how a "loan" to a private company in which he is a shareholder, becomes wages if not repaid within the SCY. Especially if he benefits. If he repays the "loan" the year after does that count as a negative against the cap, if not it is grossly unreasonable and that would have been a better ground to appeal on.

A lot of what they are picking up on are small advantages players got from options to buy etc, £10-20K a time. If you are going into that detail, should clothes, cars etc provided by sponsors also count towards the salary cap?

It seems to me that we as ordinary people can see also sorts of problems with the SC rules and the effects they would have, how come these high rollers and their lawyers did not?

They did and tried (and failed) to get round them

by WELL-PAST-IT Thu 23 Jan 2020, 4:57 pm

R!skysports wrote:
WELL-PAST-IT wrote:But it is not a loan, Wray took the appropriate portion of the property, he owned 33% of the property, or to be precise 33% of the company that bought the property. It was not a personal loan. The refurbishment costs were a loan to the company and interest free. He did n't increase his equity, but presumably he increased the value of the property and therefore did benefit.

Can some bright spark tell me how a "loan" to a private company in which he is a shareholder, becomes wages if not repaid within the SCY. Especially if he benefits. If he repays the "loan" the year after does that count as a negative against the cap, if not it is grossly unreasonable and that would have been a better ground to appeal on.

A lot of what they are picking up on are small advantages players got from options to buy etc, £10-20K a time. If you are going into that detail, should clothes, cars etc provided by sponsors also count towards the salary cap?

It seems to me that we as ordinary people can see also sorts of problems with the SC rules and the effects they would have, how come these high rollers and their lawyers did not?

They did and tried (and failed) to get round them

My point was not how did they fail to get around them, but how did they get into the finished agreement at all. I am not a lawyer, but I do have to draw up standard forms of contract and study contracts coming in and I would have picked up that these contradicted what I intended to do. I would have wanted written clarification on what these clauses actually would mean with regard to my intentions.

by Brendan Thu 23 Jan 2020, 7:04 pm

So as they were only over by 98k one year does that mean that they were more or less in he cap so that year is more or less ok

In regards the loans it's a weird one. Surely a loan should only be wages if it is shown it's not being paid back and no loan should be longer than the player's contract.

For interest free loans there are already ways to treat that for tax purposes, so surely the cap should treat loans the same way as the tax system.

by king_carlos Thu 23 Jan 2020, 7:27 pm

nathan wrote:Should point out that this report is only for past seasons and not this season which leads to the questions of;

What went on after this report for Sarries to choose relegation over a full audits of their accounts

LondonTiger wrote:5) What was disclosed in teh previous breaches does not explain away this season's breach. That Sarries are not willing to open their books suggest a different "accounting policy" was being used.

The Dyson report being published (and mysteriously leaked with names not redacted) provides some clarity to end speculation, albeit does not put a stop to the bad blood.

The speculation will continue whilst the secrecy around this season remains though. It seems that:

1. Sarries thought the co-investments were fine and battered ahead despite the investigation.
2. Sarries found new ways of circumventing the cap in the belief it would take another few years to come out.

by king_carlos Thu 23 Jan 2020, 7:45 pm

Lucy Mercey (formely Wray) has stepped down from the Sarries board as well. I hadn't heard about that until reading the BBC article.

I believe Lucy was the last member of the Wray family with a formal connection to the club. Nigel says he will still be providing financial backing for them though.

by Recwatcher16 Thu 23 Jan 2020, 9:04 pm

I don't really understand how a loan which is not subject to PAYE or NIC contributions can be considered as salary.
Further the loans were personal monies from private individuals and not Saracens legal entity money. If there is any tax to pay, it would be capital gains tax and/or corporation tax and again that is nowhere near classified as salary.
Does this mean that rugby players cannot have business interests outside rugby if there is a rugby link i.e. Club Directors? Lawyers could have field day with that one but Wray has clearly let it go unchallenged.

The sooner the rules are made public and explicit the better, with fully resourced oversight and reporting rules.

by king_carlos Thu 23 Jan 2020, 9:41 pm

Recwatcher16 wrote:I don't really understand how a loan which is not subject to PAYE or NIC contributions can be considered as salary.
Further the loans were personal monies from private individuals and not Saracens legal entity money. If there is any tax to pay, it would be capital gains tax and/or corporation tax and again that is nowhere near classified as salary.
Does this mean that rugby players cannot have business interests outside rugby if there is a rugby link i.e. Club Directors? Lawyers could have field day with that one but Wray has clearly let it go unchallenged.

The sooner the rules are made public and explicit the better, with fully resourced oversight and reporting rules.

https://d2cx26qpfwuhvu.cloudfront.net/premier/wp-content/uploads/2019/10/16173132/Salary-Cap-Regulations-2019-20-Board-Approved-Feb-2019.pdf

The regs are available in full and always have been. Below is paraphrasing of what constitutes salary from the Premiership Rugby site. The link above is the full regs.

Premiership Rugby wrote:Amounts that are Included

Salary, wage, fee, remuneration etc.
Bonus (match, win, year-end etc.)
National insurance
Loan (not paid back in full before end of SCY loan was made).
Child support / maintenance /school fees
Accommodation or holiday cost
Pension (incl. annuities)
Image Rights payments
Payment in connection with promotional, media or endorsement work
Payment for off-field activities for or on behalf of club
Signing on fee, transfer payment, relocation allowance or payment linked to transfer
Accommodation, holidays, cars, match tickets (other than 4 per match), clothing (other than training kit, official club blazers and other club wear), travel, membership fees, food and drink (other than at matches and training)
Payment in kind a player would not have received were not for his involvement with a Club
Redundancy/Compromise etc.
Agent Fees plus VAT & NI
Any 3rd Party & Connected Party (e.g. sponsor) payment unless demonstrated separate

Directors investing in viable business entities (Wray has been permitted to within the cap as have others) is within the cap. The regs prevent means of circumventing the cap by a player paying a fiver and a packet of crisps into an investment and an owner (or party affiliated to the club) paying in £500k. Which to paraphrase is what's gone on to a large extent with the co-investments.

Lord Dyson, former supreme court justice and President of the Court of Appeal for England and Wales, ruled them to be benefit in kind. I'm no lawyer or accountant but I am inclined to trust an investigation headed by someone of his experience and stature.

by quinsforever Thu 23 Jan 2020, 9:47 pm

Scottrf wrote:
quinsforever wrote:Risky - i haven't seen it suggested there are any tax issues with any of this

and if Lord Dyson accepted the payments were not "deliberate", merely "reckless", then i don't think your comments apply. plus they got them cleared by their own counsel.

clearly Wray, based on the advice he got, still thought the payments obeyed the letter of the salary cap regs, if not the spirit, as shown by his willingness to contest Dyson's penalty, right up until his advisers changed their mind on the strength of his case.

I think people are getting a bit too emotional about this.

yes, in hindsight, Saracens were over the cap. they were aggressive in co-payment schemes, and guess what, there was a difference of opinion between lawyers about that. no shocker there. the jury of the other 12 PRL(+ newcastle) clubs have now effectively doubled the points penalty all because Saracens wouldnt hand back their last two premiership titles. nothing to do with opening their books IMO.

so maybe people should just calm down a bit. no crime has been committed. Saracens look bad yes. but so do the PRL!

England have benefited significantly from having the core of their team play together consistently IMO. and i have loved watching Sarries win the Champs Cup, something the other english teams were absolutely nowhere near doing.

Yes it has. It's illegal under competition law.

umm, no it's not.

by quinsforever Thu 23 Jan 2020, 9:59 pm

king_carlos wrote:
Recwatcher16 wrote:I don't really understand how a loan which is not subject to PAYE or NIC contributions can be considered as salary.
Further the loans were personal monies from private individuals and not Saracens legal entity money. If there is any tax to pay, it would be capital gains tax and/or corporation tax and again that is nowhere near classified as salary.
Does this mean that rugby players cannot have business interests outside rugby if there is a rugby link i.e. Club Directors? Lawyers could have field day with that one but Wray has clearly let it go unchallenged.

The sooner the rules are made public and explicit the better, with fully resourced oversight and reporting rules.

https://d2cx26qpfwuhvu.cloudfront.net/premier/wp-content/uploads/2019/10/16173132/Salary-Cap-Regulations-2019-20-Board-Approved-Feb-2019.pdf

The regs are available in full and always have been. Below is paraphrasing of what constitutes salary from the Premiership Rugby site. The link above is the full regs.

Premiership Rugby wrote:Amounts that are Included

Salary, wage, fee, remuneration etc.
Bonus (match, win, year-end etc.)
National insurance
Loan (not paid back in full before end of SCY loan was made).
Child support / maintenance /school fees
Accommodation or holiday cost
Pension (incl. annuities)
Image Rights payments
Payment in connection with promotional, media or endorsement work
Payment for off-field activities for or on behalf of club
Signing on fee, transfer payment, relocation allowance or payment linked to transfer
Accommodation, holidays, cars, match tickets (other than 4 per match), clothing (other than training kit, official club blazers and other club wear), travel, membership fees, food and drink (other than at matches and training)
Payment in kind a player would not have received were not for his involvement with a Club
Redundancy/Compromise etc.
Agent Fees plus VAT & NI
Any 3rd Party & Connected Party (e.g. sponsor) payment unless demonstrated separate

Directors investing in viable business entities (Wray has been permitted to within the cap as have others) is within the cap. The regs prevent means of circumventing the cap by a player paying a fiver and a packet of crisps into an investment and an owner (or party affiliated to the club) paying in £500k. Which to paraphrase is what's gone on to a large extent with the co-investments.

Lord Dyson, former supreme court justice and President of the Court of Appeal for England and Wales, ruled them to be benefit in kind. I'm no lawyer or accountant but I am inclined to trust an investigation headed by someone of his experience and stature.

agree with you

only person coming out of this with any kind of credibility is Dyson. Sarries clearly cheated, by the letter of the rules, however i would suggest that the salary cap rules that they fell foul of are rather dumb. A loan, if paid back, cannot in any world be counted as salary. if HMRC dont count it then why should PRL.

would love to see someone calculate how much Sarries players were overpaid relative to the salary cap. because if its just these loans (which are real loans), i wonder if they were even over the cap at all?

in which case all the "outraged on t'internet" should really calm down a bit - because if so, the arrangements clearly did not enable Sarries to assemble some kind of Marvel Universe squad unfairly compared to everyone else. I am sure they were a bit over. maybe by a Vunipola leg or something Wink

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