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Salary cap breaches revealed
Discussion started by Saracens23 , 22 January, 2020 22:10
Salary cap breaches revealed
Saracens23 22 January, 2020 22:10
[www.skysports.com]

From sky sports.

Re: Salary cap breaches revealed
derbyshire fan 22 January, 2020 22:20
Well well well!

Re: Salary cap breaches revealed
mfc 22 January, 2020 22:34
Unreal, if this is the extent of the cheating its an embarrassment. Some people need to take a long hard look in the mirror

Re: Salary cap breaches revealed
Paulr58 22 January, 2020 22:34
So it is just all co investments. Therefore if their are no more co-investments we are in compliance with the salary cap.

Re: Salary cap breaches revealed
OhMaroItoje 22 January, 2020 22:37
But but we are 2 million per season over the cap! Unbelievable. Every single club needs to come out and say they want to be investigated with the same amount of detail...



Edited 1 time(s). Last edit at 22/01/2020 22:42 by OhMaroItoje.

Re: Salary cap breaches revealed
derbyshire fan 22 January, 2020 22:40
I suspect the 2m figure is entirely made up by the media

Re: Salary cap breaches revealed
Paulr58 22 January, 2020 22:46
The 2m was over three years if you read whats been put out and 800k of that is a disputed value of shares bought in itoje's image right company. Which were valued by PWC the leading share company. This valuation was disputed by anther company used by the prl, very thin evidence.

Re: Salary cap breaches revealed
OhMaroItoje 22 January, 2020 22:50
Quote:
Paulr58
The 2m was over three years if you read whats been put out and 800k of that is a disputed value of shares bought in itoje's image right company. Which were valued by PWC the leading share company. This valuation was disputed by anther company used by the prl, very thin evidence.

Yeh. I was just saying how weve been rumoured to have been 2 million over this season alone which clearly is an absolute lie!

Re: Salary cap breaches revealed
Sorry Sarrie 22 January, 2020 22:51
What stood out for me was the PRL saying that relegation was a disproportionate penalty.



My wife and I are on the verge of splitting up because of my obsession with rugby.
I've decided to give it one last try......

Re: Salary cap breaches revealed
carlyleuk 22 January, 2020 22:55
Well the sky report from the PRL judgement makes me feel happy again.

The Daily Telegraph report makes me feel happy again. [www.telegraph.co.uk]

The Rugby union weekly- Saracens special made me feel happy again. [www.bbc.co.uk]

Thank you for releasing this.

I am now pleased that we are in the Champions league, we don't have the stench of those hypocritical club owners from the premiership.

I would prefer to be in the Pro-15 (used to be called 14!)

Re: Salary cap breaches revealed
BlackheathSarrie 22 January, 2020 23:08
Quote:
Paulr58
800k of that is a disputed value of shares bought in itoje's image right company. Which were valued by PWC the leading share company. This valuation was disputed by anther company used by the prl, very thin evidence.
PWC are also the salary cap auditors so you might have thought they were exactly the right company to get a value from.

Quote:
Sorry Sarrie
What stood out for me was the PRL saying that relegation was a disproportionate penalty.
Just for clarity it was Lord Dysons panel which said that. PRL in contrast have made a point of seeing the club relegated.

Right now I think that information casts a different light on a number of things but I'll wait to see the full report or whatever we're shown in case there is information missing out which paints things in a much worse light.

Lets be clear though. We were over cap on matters that should have been run by the SCM if Wrays really felt there was nothing to hide so I don't think we should be broadcasting too much righteous indignation.



Edited 1 time(s). Last edit at 22/01/2020 23:22 by BlackheathSarrie.

Re: Salary cap breaches revealed
Primavesi2 22 January, 2020 23:24
We are not in the clear (clearly broke the rules) and we certainly should not be coming across as smug in any way but this does show just how much speculation was taken as fact over the last few weeks, much of which appears not to be true.

Did we cheat the cap? Yes.
Was it on an industrial scale as many (including me to be honest) believed? It appears not.

Its early days but a quick glance at twitter suggests that the wider public opinion is starting to shift. Interesting to see how it pans out over the next few days.

Re: Salary cap breaches revealed
siNBin 22 January, 2020 23:28
Sky's summary just raises more questions for me. The distracting one is, when did we change our name?

"Sarecens: Full details of payments which breached Premiership salary cap revealed"

Does the typo undermine the synopsis provided?

I need to read the original words to get a real feeling of what Lord Dyson's conclusion actually is.

Re: Salary cap breaches revealed
Marlow Nick 23 January, 2020 06:32
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
Maro: OK but I want 1.6m for 30%
All the dragons: I'm out
Nigel: sounds like a fair market price that doesn't need to be discussed with PRL or double checked in the market place. I'm in

RECKLESS is being very generous

Re: Salary cap breaches revealed
DoubleChampions 23 January, 2020 07:37
Quote:
OhMaroItoje
Quote:
Paulr58
The 2m was over three years if you read whats been put out and 800k of that is a disputed value of shares bought in itoje's image right company. Which were valued by PWC the leading share company. This valuation was disputed by anther company used by the prl, very thin evidence.

Yeh. I was just saying how weve been rumoured to have been 2 million over this season alone which clearly is an absolute lie!

+1



+1

Re: Salary cap breaches revealed
DoubleChampions 23 January, 2020 07:54
Quote:
BlackheathSarrie
Quote:
Paulr58
800k of that is a disputed value of shares bought in itoje's image right company. Which were valued by PWC the leading share company. This valuation was disputed by anther company used by the prl, very thin evidence.
PWC are also the salary cap auditors so you might have thought they were exactly the right company to get a value from.

Quote:
Sorry Sarrie
What stood out for me was the PRL saying that relegation was a disproportionate penalty.
Just for clarity it was Lord Dysons panel which said that. PRL in contrast have made a point of seeing the club relegated.

Right now I think that information casts a different light on a number of things but I'll wait to see the full report or whatever we're shown in case there is information missing out which paints things in a much worse light.

Lets be clear though. We were over cap on matters that should have been run by the SCM if Wrays really felt there was nothing to hide so I don't think we should be broadcasting too much righteous indignation.

+1

Re: Salary cap breaches revealed
Adey 23 January, 2020 08:06
You lot are hilarious.

I wont be happy until I see the report.

One summarised article of the report:

Is that it? We only cheated for 3 years to the sum of 2m, not 2m a season. Its a witch hunt.

Re: Salary cap breaches revealed
DoubleChampions 23 January, 2020 08:09
Quote:
Adey
You lot are hilarious.
I wont be happy until I see the report.

One summarised article of the report:

Is that it? We only cheated for 3 years to the sum of 2m, not 2m a season. Its a witch hunt.

Not a witch hunt with regard to the reports findings Adey. 35 points and a hefty fine. But the relegation and continued hounding - yes a witch hunt.



+1

Re: Salary cap breaches revealed
myleftboot 23 January, 2020 08:11
Haha, well put Adey. I would guess its an outpouring of relief, in a way. We will now (presumably, once published,) know the truth, and its not as bad as the worst case the Daily Hate whipped up a frenzy for

Re: Salary cap breaches revealed
Adey 23 January, 2020 08:25
Cheating is still cheating. If Nigel Wray and his cronies didnt know if they were allowed to do it or not, dont do it.

Should have been automatic relegation. -35 points for each season to run at the same time from the championship and a fine.

Doesnt matter about handing the trophies back or not. Theyre meaningless after the cheating.

Re: Salary cap breaches revealed
Ken I L Worth 23 January, 2020 08:35
Just to make it clear.

Saracens accepted relegation, PRL didn't force it upon them
For some unknown reason they didn't want to open their books for 'full scrutinisation' from that everyone makes the obvious conclusion that by choosing relegation (arguably a punishment out of proportion to what has been declared) Saracens have chosen the lesser of the two evils.

We will probably never know what the other evil was, but sadly it almost certainly would have assigned a once great club to a shameful history.

For the sake of the game we all love, hopefully we will never know.

Re: Salary cap breaches revealed
Exeforever 23 January, 2020 08:46
There is a serious chance here of two issues being conflated.

Dyson's report led to the fine and 35 point deduction at which point relegation was not mentioned.

Saracens' subsequent refusal to trim the budget to bring you under the cap for this season led the other Premiership Chairmen to decide to impose relegation or a forensic audit. You chose the former.

Your management has been the architect of your downfall and to blame it on outside parties or claim that "it's only 2m over three years" is utterly irrelevant. Had you trimmed your budget, or even shown evidence of cooperation, you would not be being relegated and would have got away with a deduction that might have stopped you getting into the playoffs this year but probably wouldn't have stopped you getting into Europe either by qualification or by winning it outright and a fine that is small change to a man of Wray's wealth. It is evidence of how unfit for purpose Sarries' senior management is that they couldn't or wouldn't grasp the chance that they were offered.

I have every sympathy with you the supporters and particularly those of you who have forked out for a valueless season ticket that they won't refund but just because the original report doesn't reveal further skulduggery that doesn't exonerate either the original cheating nor the attitude that the Club's management has displayed prior to Goulding's comments this week.



Edited 1 time(s). Last edit at 23/01/2020 08:47 by Exeforever.

Re: Salary cap breaches revealed
myleftboot 23 January, 2020 08:47
The stripping of previous titles, as a fan, would be a greater evil

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 09:11
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Apart from the Ashton excuse (which is clearly rubbish and I call bulls***), there is nothing here which is a black and white.

Except of course from the panel's recommendation relegation would be disproportionate.

Re: Salary cap breaches revealed
Primavesi2 23 January, 2020 09:11
Quote:
Marlow Nick
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
PWC: a 30% stake would be 1.6m
Maro: OK then I want 1.6m for 30%
Nigel: sounds like a fair market price based on the valuation of one of the biggest consultancy firms in the world, one that is trusted by premier rugby.

RECKLESS is being very generous

Fixed it for you

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 09:22
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Re: Salary cap breaches revealed
GHA 23 January, 2020 09:25
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Apologies, I obviously haven't read as much of the detail as you. So the club resisted a three year retrospective audit which would've been for this season and the previous two, whilst the report covers the previous three seasons but not this one?

Do you think the club are cutting off their nose to spite their face by choosing relegation because 'the same scrutiny wasn't applied to every Premiership club?'

Re: Salary cap breaches revealed
Statesman 23 January, 2020 09:29
The one new thing in the report for me is that there are very clear tax implications if whats written in the article is accurate. I would expect HMRC to be getting very interested in this.

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 09:35
Quote:
GHA
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Apologies, I obviously haven't read as much of the detail as you. So the club resisted a three year retrospective audit which would've been for this season and the previous two, whilst the report covers the previous three seasons but not this one?

Do you think the club are cutting off their nose to spite their face by choosing relegation because 'the same scrutiny wasn't applied to every Premiership club?'

It isn't really a straight choice though. If other clubs were open to having their accounts retrospectively audited (and Leicester Tigers appear to have suggested they are at least), then it sounds as though Saracens will also have their accounts audited. Is the ball not in their court?

I am also not clear what else this retrospective audit would have shown that wasn't looked into by this panel - genuine point rather than an attempt at point scoring, I don't know how much material the panel looked at previously: did it not cover the last three years accounts? I guess we'll find out when the full judgment is revealed.

Re: Salary cap breaches revealed
McSaracens 23 January, 2020 09:38
What I don't understand is the Sky report stating Itoje didn't turn up to any MBN events.....

I was lucky enough to attend one last year & guess who was there, Farrell and Itoje!



I believe it might have been said before, but there is something special happening at Saracens, and I want to be part of it. - Nils Mordt

Re: Salary cap breaches revealed
DoubleChampions 23 January, 2020 09:50
Quote:
GHA
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Apologies, I obviously haven't read as much of the detail as you. So the club resisted a three year retrospective audit which would've been for this season and the previous two, whilst the report covers the previous three seasons but not this one?

Do you think the club are cutting off their nose to spite their face by choosing relegation because 'the same scrutiny wasn't applied to every Premiership club?'

The ultimatum was audit and return the trophies - no club would agree to that.

Re: Salary cap breaches revealed
daz_71 23 January, 2020 09:56
Quote:
McSaracens
What I don't understand is the Sky report stating Itoje didn't turn up to any MBN events.....
I was lucky enough to attend one last year & guess who was there, Farrell and Itoje!

Just seen David Flatman saying exactly this on Twitter. Flat's I believe is hired by MBN to host a lot of these events so would know. Also many pictures doing the rounds on SM of Maro at such events.

Re: Salary cap breaches revealed
TonyTaff 23 January, 2020 10:04
Quote:
daz_71
Quote:
McSaracens
What I don't understand is the Sky report stating Itoje didn't turn up to any MBN events.....
I was lucky enough to attend one last year & guess who was there, Farrell and Itoje!

Just seen David Flatman saying exactly this on Twitter. Flat's I believe is hired by MBN to host a lot of these events so would know. Also many pictures doing the rounds on SM of Maro at such events.

However, Dyson et al point out that the payments were not on a per appearance basis, and therefore were salary not commercial income.

It wouldn't have been difficult to structure the arrangement so that it didn't resemble salary, but that wasn't done.



721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication.


(*) As at October 31, 2018.

Re: Salary cap breaches revealed
GHA 23 January, 2020 10:07
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Apologies, I obviously haven't read as much of the detail as you. So the club resisted a three year retrospective audit which would've been for this season and the previous two, whilst the report covers the previous three seasons but not this one?

Do you think the club are cutting off their nose to spite their face by choosing relegation because 'the same scrutiny wasn't applied to every Premiership club?'

It isn't really a straight choice though. If other clubs were open to having their accounts retrospectively audited (and Leicester Tigers appear to have suggested they are at least), then it sounds as though Saracens will also have their accounts audited. Is the ball not in their court?

I am also not clear what else this retrospective audit would have shown that wasn't looked into by this panel - genuine point rather than an attempt at point scoring, I don't know how much material the panel looked at previously: did it not cover the last three years accounts? I guess we'll find out when the full judgment is revealed.

Didn't this panel look at the previous three seasons only - so a new 'full' audit would've included this season and gone into more detail? Only guessing, obviously...

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 10:18
Quote:
GHA
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Quote:
GHA
Quote:
#wolfpack
Except of course from the panel's recommendation relegation would be disproportionate.

Based on the 'transgressions for the previous three seasons. And the punishment for the previous three seasons was a fine and two points deductions of 35 points which, given concurrently, meant Sarries weren't relegated.

Sarries chose relegation over opening the books for this season, didn't they?

<sigh>

Read the report: "It is thought the club did not resist an investigative audit at the end of this season[i][/i] but they did resist a three-year retrospective audit on the grounds that it would be unfair - in the club's view - if the same scrutiny wasn't applied to every Premiership club"

Apologies, I obviously haven't read as much of the detail as you. So the club resisted a three year retrospective audit which would've been for this season and the previous two, whilst the report covers the previous three seasons but not this one?

Do you think the club are cutting off their nose to spite their face by choosing relegation because 'the same scrutiny wasn't applied to every Premiership club?'

It isn't really a straight choice though. If other clubs were open to having their accounts retrospectively audited (and Leicester Tigers appear to have suggested they are at least), then it sounds as though Saracens will also have their accounts audited. Is the ball not in their court?

I am also not clear what else this retrospective audit would have shown that wasn't looked into by this panel - genuine point rather than an attempt at point scoring, I don't know how much material the panel looked at previously: did it not cover the last three years accounts? I guess we'll find out when the full judgment is revealed.

Didn't this panel look at the previous three seasons only - so a new 'full' audit would've included this season and gone into more detail? Only guessing, obviously...

But as per the original point - Saracens did not resist an investigative audit at the end of the season (THIS season).

Did they resist an audit carried out now on 23 January 2020? I don't know - but judgement based on where you are on 23 January 2020 would be completely iniquitous because the salary cap year runs from July-June. Had you judged Saracens now (as has been pointed out elsewhere), Saracens would not benefit from any England credits picked up during the 6N or injury credits (because the season hasn't ended).

My suspicion is that is exactly why it was demanded now and not at the end of the season (like every other club). But that is a suspicion from a suspicious mind.

Re: Salary cap breaches revealed
daz_71 23 January, 2020 10:25
A lot of people are saying we are being relegated because we are over the cap this season. The questions I have is why are we over the cap? Are co-investments continuing or are the previous co-investments being pro-rataed over the length of player's contracts?

I have no doubt (in my head) that these co-investments are a way of circumventing the cap however I still struggle to see how these investments can categorically be seen as salary unless it is written in to contracts. On the face of it these co-investments look a lot like co-investments!

Re: Salary cap breaches revealed
Gray_Lensman 23 January, 2020 11:00
Co-investments look odd. Firstly because they don't seem to be on normal commercial terms (eg. interest free loans'). The second is that there don't seem to have been any of these vehicles set up for 'marquee' players (or indeed many other players). If the intention behind them was a laudable desire to help a post-rugby career then logically all players should have had these arrangements. Not providing them for those exempt from the cap makes it look like only high profile players within the cap were offered such co-investments based on criteria other than future careers.

As for avoiding an audit, the rules provide for an audit at any time. Under the rules Saracens should have agreed to that. Clearly a three year audit is an unusual step and admittedly one not provided for in the rules. But it isn't an unreasonable request given the timescale over which salary cap cheating was found to have taken place. In particular it is easy to see why other members of PRL may have felt a lack of trust in Saracens given both the previously discovered breaking of the rules and the fact that repeated statements that Saracens was compliant this season were revealed not to be true. To request that other clubs should submit to a similar audit is a ridiculous demand: they haven't been found to have broken the salary cap rules over several seasons. That is true of one club only and a club that has shown itself to untrustworthy.

It is only supposition but it is unsurprising that many outside observers will take the view that a decision to accept relegation rather than agree to an audit indicates that there is something disreputable or dishonest that would be revealed by such an audit. After all, even this leaked report says that relegation would be disproportionate to the offences revealed and yet Saracens chose to accept it rather than agree to the entirely reasonable request from PRL for openness and transparency. I'm usually uncomfortable with the argument that 'you've nothing to hide if you've done nothing wrong' but Saracens have shown a willingness to do wrong and may well have something to hide.

Re: Salary cap breaches revealed
Chops3 23 January, 2020 11:39
It's widely reported in the press that the demand was not just for an audit, but also that the trophies had to be given up. Maybe this is what Saracens considered to be a step to far (on top of the fine, points deduction and mid season audit) in regard to punishments they were willing to accept?

Daily Telegraph 19th January
Faced with the demand from rival clubs for Saracens to open their books for a forensic audit, and hand back their Premiership trophies from 2018 and 2019 or accept automatic relegation, the club opted for the latter.

Daily Mail 23rd January
Sources have indicated that Saracens were presented with an ultimatum cut 2m from their playing budget with immediate effect, hand back their trophies and open their books up to forensic accountants.

The Times 18th January
The English and European champions are resigned to another 35-point deduction for breaching salary-cap regulations again this season, having failed to meet a league demand that they cut their wage bill by 2 million and return the Premiership trophies they won in 2018 and 2019

Re: Salary cap breaches revealed
DoubleChampions 23 January, 2020 11:41
Quote:
Chops3
It's widely reported in the press that the demand was not just for an audit, but also that the trophies had to be given up. Maybe this is what Saracens considered to be a step to far (on top of the fine, points deduction and mid season audit) in regard to punishments they were willing to accept?
Daily Telegraph 19th January
Faced with the demand from rival clubs for Saracens to open their books for a forensic audit, and hand back their Premiership trophies from 2018 and 2019 or accept automatic relegation, the club opted for the latter.

Daily Mail 23rd January
Sources have indicated that Saracens were presented with an ultimatum cut 2m from their playing budget with immediate effect, hand back their trophies and open their books up to forensic accountants.

The Times 18th January
The English and European champions are resigned to another 35-point deduction for breaching salary-cap regulations again this season, having failed to meet a league demand that they cut their wage bill by 2 million and return the Premiership trophies they won in 2018 and 2019

+1 - no club would have agreed to this



+1

Re: Salary cap breaches revealed
Statesman 23 January, 2020 11:48
Quote:
DoubleChampions
Quote:
Chops3
It's widely reported in the press that the demand was not just for an audit, but also that the trophies had to be given up. Maybe this is what Saracens considered to be a step to far (on top of the fine, points deduction and mid season audit) in regard to punishments they were willing to accept?
Daily Telegraph 19th January
Faced with the demand from rival clubs for Saracens to open their books for a forensic audit, and hand back their Premiership trophies from 2018 and 2019 or accept automatic relegation, the club opted for the latter.

Daily Mail 23rd January
Sources have indicated that Saracens were presented with an ultimatum cut 2m from their playing budget with immediate effect, hand back their trophies and open their books up to forensic accountants.

The Times 18th January
The English and European champions are resigned to another 35-point deduction for breaching salary-cap regulations again this season, having failed to meet a league demand that they cut their wage bill by 2 million and return the Premiership trophies they won in 2018 and 2019

+1 - no club would have agreed to this

DC, I see you are happy to quote the DM when it suits you! Can you find any direct statement from either Saracens or the PRL that references the trophies? I cant. Furthermore, if it was the case that this had been demanded why would your Chairman not have referenced it in his e-mail? Its a far more powerful rebuttal of the audit demand than the one he offered!

Re: Salary cap breaches revealed
Wilson Pickett 23 January, 2020 12:26
What we need is the absolute truth to come out, if it doesn't there will always be suspicion which helps no-one.

Saracens is a famous old club that needs sensible owners to run it according to the cap rules to try to build the support base into an organically successful club that doesn't need a mega rich man to lose money every year. I am not sure fans of other clubs will be content without change but hey ho.

Time is a healer and a year in the Championship is no bad thing, some of the loyal fans will enjoy the away trips. Plus it gives the chance for more of the younger players to get game time.

What a mess but light at the end of the very long tunnel.



Edited 1 time(s). Last edit at 23/01/2020 15:11 by TonyTaff.

Re: Salary cap breaches revealed
Sarriebone 23 January, 2020 12:34
Here's the full report if anyone is interested [media-cdn.incrowdsports.com]

Re: Salary cap breaches revealed
Gray_Lensman 23 January, 2020 12:40
From your own Chairman

Quote:
Prior to my time here, there were discussions with PRL in relation to conducting a mid season audit spanning several seasons you will have seen references to that in the press. These discussions continued last week after my appointment.

It would be fair to say that other PRL stakeholders were sceptical about our compliance with such an audit.

We carefully considered the option of a full investigatory audit. However, that inevitably would have involved a long period of more financial and emotional strain and this in turn meant this was not a viable option for us. We therefore agreed with PRL on relegation in the hope that we could draw a line under the mistakes made by Saracens with respect to compliance with the regulations and concentrate on putting our new robust procedures in place.

So, willing to accept the financial and emotional strain of relegation in order to avoid the financial and emotional strain of being audited. Perhaps you can see why more people than PRL stakeholders are sceptical about Saracens' motivations?

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 12:49
Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is 800,000 out of 906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, Mr Rogers was reasonably entitled to conclude that the purchase price for the [REDACTED] shares was above the true market value to the extent of 800,000. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.



Edited 1 time(s). Last edit at 23/01/2020 12:53 by #wolfpack.

Re: Salary cap breaches revealed
stevene 23 January, 2020 13:33
Redacted report here:

[media-cdn.incrowdsports.com]

Whoever leaked the unredacted report needs banning from the sport if I am honest. Its done more harm.

For those interested I have summarised some of the key points from the redacted report.

a) as reported Saracens tried to claim the salary cap was illegal under comp law despite being signatories to it. Section A point 8.
b) refused/ werent able (delete based on POV) to provide documents legitmately requested by PRL (section A point 7)
c) Saracens were investigated in 2014. (Section b point 1) to which Saracens refused to co-operate. Defense by Saracens was a breach of competition law and PRL 'settled' with Saracens.
d)Argument (with no distinction between 2014 and 2019) was that that challenge shouldnt be upheld. (point 23/51/109/111).
e)definition of reckless. failing to give significant thought to or recognising and deliberately taking a risk of a breach. So in order words foolish or took a gamble. (112). Hardly supports the argument this wasn't in some way deliberate and 'just a few forms' to paraphrase earlier statements.
f)the panel found that the investments were salary (section 179)
g)they found that interest free loans for renovations were salary (186)
h)MBN. Didnt disclose the agreement and as a connected party (MBN to Saracens) it counts as salary (regardless of whether the player turned up or not) (section 209). Apparently this was an oversight according to Saracens and also argued these were arms length transactions despite evidence to the contrary and providing no evidence of their own (213). The panel gives a myriad of reasons why it constitutes salary and they say they would have concluded the same as the cap manager (219).
i) the salary cap manager provided evidence that a senior player who received image right payments of 800k was underpaid in salary (259).
j)the salary cap manager got 3 valuation for the image right valuation and picked the mid range (254) and the difference between that and salary was found to consitute salary. [note valuations, even by PWC, are subjective as they are forecasts of future value]. The allegation here is that Saracens have picked a valuation which suits the purpose.
h)saracens chose not to bring any evidence to the panel from PWC to additionally support PWC's valuation/ discredit the valuation arrived at by the cap manager (266)
i) the fine and penalty were strict interpretations of the rules (282-296) which would be 5.3m fine and 70 points.
j)discretion is open to the panel due to the severity of the offences commited by Saracens to which the panel ruled they had been found to have breached (297+). Only the panel not PRL have this ability in isolation (eg without agreement of the other party) in respect of the charges brought to the panel.

The panel found (300):

rather than admit the breaches saracens challenged the legality of the breaches
the breaches were reckless (as defined above)
they failed to previously co operate in 2015
they failed to fully co-operate with this investigation

They suggest (in 306) that a higher sanction than what ended up being levied should be considered.

However they reject PRL statement that this was extraordinary in nature and therefore the regulations couldnt possibly take such a level of breaches into account (307)

The panel rejected saracens assertions that these breaches were merely negligent by the very nature of their failure to co-operate (313).

This was halved because the breaches were deemed reckless (2nd worst category) rather than deliberate (319) and therefore points deduction was halved to 35. [note other than a smoking gun of evidence it seems very difficult to be found to have deliberately breached the cap]. It recognised earlier that 70 points would relegate the club.


My view on the report:
Its pretty shocking if I am honest the negligence (whether deliberate or not) by the club. The inertia of PRL in policing this post 2015 is also pretty shocking and more needs to be spent beefing up the SC team. However that doesnt detract from what was done. I think Saracens were pretty lucky first time round to get a 50% discount on the original 70 point deduction. considering the 4 levels of breach all the way through to deliberate concluding they were reckless and applying a 50% reduction feels a bit out of kilter. However thats the decision the panel made.

Recent events:
its clear PRL wanted saracens relegated with their submissions with a full 70 point deduction. Considering 90% of what they charged saracens with was upheld I would suggest they were pretty peeved at the 50% discount on point deductions. I would hazard a guess that (under the rules of the SC) PRL have clearly (with reasonable reason) wanted to do a full detailed review. Saracens refused to co-operate (as they did in 2015 and 2019) and therefore there was a stand off. Clearly Saracens could accept this and PRL could do as the rules allow (and with reason in light of this). Saracens statements after the decision stated they were inside this years cap. PRL have called their bluff from what I can see.

Re: Salary cap breaches revealed
freddydoesdallas 23 January, 2020 13:36
I've been an outside observer of this for a while and not here to pass judgement on the club or the punishment.

However, after seeing similar things happen in football and then seeing some of the terminology in the releases today ie 'interest free loans' to players now being considered salary...is this going to have tax implications on the players?

Many footballers in recent years have been saddled with huge tax bills after their career had ended due to the EBTs they received. How much of this non-salaried income is now going to be deemed salary and taxable?

Re: Salary cap breaches revealed
Marlow Nick 23 January, 2020 13:40
Freddy
Be careful not to mix the very broad PRL definition if salary with the tax man's relatively narrow definition of salary. There could of course be other tax questions broader than just income tax

Re: Salary cap breaches revealed
stevene 23 January, 2020 13:43
Quote:
#wolfpack
Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is 800,000 out of 906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, Mr Rogers was reasonably entitled to conclude that the purchase price for the [REDACTED] shares was above the true market value to the extent of 800,000. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.

not sure this is entirely accurate. The key points from that entire section:

The panel report noted evidence submitted that the player was underpaid.

This was used in conjunction with the IR payment to deem this salary.

In respect of the valuation the report notes the SCM used a mid range valuation from a valuation. He didnt simply pick the low valuation to suit his purpose. You are right in saying that valuations aren't a pure science as there is an element of forecasting involved.

The panel also note that Saracens didnt provide any additional evidence to support the PWC valuation despite the opportunity to do so. It would have helped their case if they had got a further independent valuation. Thats the point in terms of not being able to disprove the SCM valuation. In the absence of further evidence from PWC or another professional firm with a further valuation.

In addition (to avoid this in first place) due to the potential variance in different valuations they didnt seek clearance from the SCM as they should have done (to both rule whether it was salary and/or to what degree).

Re: Salary cap breaches revealed
freddydoesdallas 23 January, 2020 13:55
Quote:
Marlow Nick
Freddy
Be careful not to mix the very broad PRL definition if salary with the tax man's relatively narrow definition of salary. There could of course be other tax questions broader than just income tax

I get that. When pay scandals like this happen in sport, the taxman won't be far behind. The players & club could both potentially have liabilities on it. I really hope the players aren't affected

Re: Salary cap breaches revealed
#wolfpack 23 January, 2020 14:04
Quote:
stevene
Quote:
#wolfpack
Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is 800,000 out of 906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, Mr Rogers was reasonably entitled to conclude that the purchase price for the [REDACTED] shares was above the true market value to the extent of 800,000. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.

not sure this is entirely accurate. The key points from that entire section:

The panel report noted evidence submitted that the player was underpaid.

This was used in conjunction with the IR payment to deem this salary.

In respect of the valuation the report notes the SCM used a mid range valuation from a valuation. He didnt simply pick the low valuation to suit his purpose. You are right in saying that valuations aren't a pure science as there is an element of forecasting involved.

The panel also note that Saracens didnt provide any additional evidence to support the PWC valuation despite the opportunity to do so. It would have helped their case if they had got a further independent valuation. Thats the point in terms of not being able to disprove the SCM valuation. In the absence of further evidence from PWC or another professional firm with a further valuation.

In addition (to avoid this in first place) due to the potential variance in different valuations they didnt seek clearance from the SCM as they should have done (to both rule whether it was salary and/or to what degree).

I don't think what you have said necessarily contradicts what I have said though.

It does seem totally nuts that Saracens didn't ask PWC to provide an opinion on Saffery Champness's valuation, but that is as much the fault of Saracens' lawyers as Saracens themselves I'd suggest.

The crux of this was never whether or not PWC or SC's valuation was correct - or indeed (and this is important) whether Saracens' interpretation of events or the SCM's interpretation of events is correct.

In fact the panel said "there is force" in Saracens' rejection of the implication that the investors "knowingly and fraudently overpaid for the shares in [REDACTED] and the purpose of the overpayment was to compensate [REDACTED] for the fact he was underpaid salary". The panel deliberately does not "express a concluded view on this issue because it is not necessary to do so". (paragraphs 267-269).

The crux is actually whether "it was reasonably open to Mr Rogers to come to [his] conclusion in all the circumstances" (para 270). Not whether Saracens or anyone connected to them deliberately or reckless or manipulatively flouted the salary cap by 800,000 in 2018/19 by making a payment to Maro Itoje. Or, in fact. whether the SCM is actually correct in his assertion that the 800,000 should be counted as 'salary'! It is just whether he acted reasonably when deciding it was.

The point remains: it looks to me that the difference in PWC's valuation and SC's valuation has resulted in 800,000 being added to 'salary' for last season.

With regardless to seeking support of the SCM, I think that provided NW and friends thought what they were doing was commercially sound they probably felt did not need to. They had, afterall, got a valuation from PRL's own auditors! Nave, maybe.



Edited 1 time(s). Last edit at 23/01/2020 14:14 by #wolfpack.

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