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Nigel Wray: Club Statement.
Discussion started by Faithful_City , 23 January, 2020 14:40
Nigel Wray: Club Statement.
Faithful_City 23 January, 2020 14:40
In its entirety(long)

Quote:
Saracens Offy
CLUB STATEMENT FROM NIGEL WRAY

I am really sorry for the heartache that I have caused you due to my ill-considered approach to matters relating to salary cap compliance. My intention with co-investments was always to support players beyond their playing careers.

I recognise that the actions of the Club were described by the panel as ‘reckless’ primarily due to my failure to consult with PRL’s salary cap manager prior to entering into any agreements and then disclosing the transactions to him. I take full responsibility for this. We should have been far better.

Equally important is the Panel’s determination that neither the Club nor myself deliberately attempted to breach the cap.

As the matter is complex (the 103 page panel’s report of determination is available on PRL’s website), I thought I would take this opportunity to explain these one-off transactions that the Panel considered to be undeclared salary.

Property co-investments entered into between myself and certain players.

A payment by an ex-player to myselfand another Saracens director.

The purchase of a 30% share in a player’s image rights company by two other Saracens directors and myself.

Agent fees across the three years.

Appearances at MBN Events.

It is not my intention to rerun our defence but simply to summarise the main points of the Disciplinary Panel’s findings.

2016/2017 the cap was breached by £1,134,968.60 due to property joint ventures entered into between myself and certain players.

In 2017, I entered into property joint ventures with four players. All these transactions are long-term investments that run far beyond the length of a player’s contract and to date no personal financial value has been transferred.

The structure is as follows:

The relevant players and I became shareholders of a joint venture company.

The company purchased one or more buy-to-let properties.

The parties contributed to the purchase price of a property pro-rata to their shareholding in the company. My contribution was by way of capital investment to the company and the player’s contribution was by way of personally guaranteeing a mortgage taken by the company equivalent to the remainder of the purchase price.

In some cases, I invested further funds in order to renovate the property. (These loans were provided at standard commercial rates of interest).

The mortgage and all other ongoing costs are paid from the rental income.

When a property is sold in the future, the proceeds are to be distributed in the following priority:
(i) first to redeem the mortgage;
(ii) second to repay my loans to the company and any interest;
(iii) the remainder to be distributed to the shareholders in accordance with their respective shareholdings.

The Disciplinary Panel concluded that under the regulations my investments into the joint venture companies amounted to ‘loans’ by a connected party of Saracens (i.e. me) to a connected party of the relevant players (i.e. the joint venture companies) and as they were not repaid within a salary cap year, the full amounts are considered salary within that time period.

I should have declared these transactions to the salary cap manager prior to signing off the agreements. I mistakenly assumed that as I had entered into personal property agreements with players previously that had been signed off by the Salary Cap Manager, a precedent had already been set. Equally with many years’ experience in the property sector, I considered these investments to be equity investments as they bear equity style risks. However, because I made my investments into the joint venture companies through directors’ loans (pursuant to accountancy advice) the entire amount has been deemed salary in the salary cap year in which they were made.

2017/2018 the salary cap was breached by £98,249.80 for payment from an ex player to myselfand another Saracens Director.

When playing for the Club, the player in question jointly purchased a residential property with myself and another Saracens director. The player lived in the house with his wife. He owned 80% of the property, with myself and the other director owning a 10% share each. Each party contributed equity for the purchase equal to their shares in the property (PRL had previously confirmed that equity investments of this nature are outside of salary for the purposes of the Regulations).

Having joined another club, the former player wished to purchase the directors’ stakes in the property through equal monthly instalments over an 18-month period. After initially complying with the payment plan, he was unable to meet the instalments due to personal circumstances. We wanted to help him and his family so agreed to a short delay in the repayments. Eight months later the former player moved to a new club where the owner of that club paid off the full outstanding amount to us directly.

The Disciplinary Panel concluded that the eight-month grace period (which straddled two seasons) amounted to a loan from connected parties of Saracens to the former player and, therefore, was a benefit in kind to a former player in accordance with the Schedule 1, paragraph 1(s) of the Regulations.

Consequently, the full amount of the purchase price paid by the ex-player to both Saracens directors was deemed to be undeclared salary for the 2017-18 season.

The Disciplinary Panel noted that this “may seem unrealistic and even unfair”, but accepted that under the regulations the salary cap manager is charged with the task of determining salary within a particular salary cap year without reference to future events (i.e. the fact that we were paid in full by the ex-player eight months later).

The salary cap was breached by £906,505.57 due tothe purchase of a 30% share in a player’s image rights company by myself and two other Saracens’ directors.

The purpose of this transaction was to leverage the collective experience of the investors to help grow the player’s off-field commercial activities and generate income.

An indicative valuation was produced by leading firm PwC which the investors used to negotiate the purchase price. The valuation was also based on a 12-year term regardless of whether the player stayed at Saracens or not.

Based on an alternative valuation, PRL argued that the true market value of the shareholding was less than that paid by the investors.

The Disciplinary Panel stated that it accepted “without reservation” the investors’ evidence regarding how they arrived at the agreed purchase price. However, the Disciplinary Panel found that it was not required to conclude whether the price paid by the investors was correct, but whether the valuation relied upon by the Salary Cap Manager was reasonable.

The Disciplinary Panel concluded that the valuation relied upon by the Salary Cap Manager was reasonable and that, therefore, the difference between that valuation and the purchase price paid amounted to undeclared salary for the 2018-19 season.

For the avoidance of doubt, the Disciplinary Panel stated that it did not find that the market value of the shareholding was, in fact, the value asserted by PRL. The Disciplinary Panel accepted that the investment was legitimate; they simply asserted that the salary cap manager acted reasonably when relying on his own accountant’s valuation (which was lower).

The Panel also found that payments made to various third parties for scouting services over the three- year period constituted salary. This was because those third parties also operated as player agents and under the regulations any such payment is treated as salary.

MBN Events, a company owned by my daughter Lucy, arranges corporate hospitality events featuring high profile guest speakers from across the sporting spectrum.

MBN entered into a commercial agreement with one Saracens player whereby it paid him a yearly lump sum of £30,000 to make a number of appearances at its events over the three-year period.

The Club’s position was that this was a genuine commercial arrangement between MBN and the player, not disguised salary.

The player appeared at several MBN events during this period. However, the Disciplinary Panel found that because Lucy is a connected party, the appearance payments made to the player were undisclosed salary totalling £95,000.

I appreciate there is a lot to digest but felt you were owed a full explanation. Again, I am sorry that this has caused so much upset to you and our sport.

As you know, the Club has already started to implement new processes to ensure nothing like this happens again.

Despite recent events Saracens is a family which has always brought me and my family so much joy. The team’s incredible form and the Club’s togetherness in recent weeks shows me the culture we have built is strong. Our vision, represented by a united group of players, coaches, staff, families and fans who care deeply for one another, endures.

Thank you all for continuing to unite behind the Club.

Best Wishes

Nigel




Edited 1 time(s). Last edit at 25/01/2020 08:27 by Faithful_City.

Re: Nigel Wray: Club Statement.
centrethere 23 January, 2020 15:45
He cheated along with players such as Itoje, and thought he could get away with it.
And they are still hiding their accounts having decided to take relegation instead.

This thread full of his excuses doesn't need a sticky, but the actual report does

Re: Nigel Wray: Club Statement.
Fiver 23 January, 2020 16:25
I think what the message from PRL is that if you're connected with the club, don't enter into any financial arrangements with a player because it looks dodgy. As the old saying goes, if you can smell a rat, it's because there's a rat.

Re: Nigel Wray: Club Statement.
WarwickEastie 23 January, 2020 16:43
Looks like Nigel thought he could tiptoe around the legal niceties to comply.

Anyone reading through that list knows full well that those payments are effectively salary.

The wierd thing is that he was either naiive, or badly advised to think he could get away with it.

Or maybe PRL (and the other clubs) just decided they'd had enough and decided to 'throw the book at him'?

I've a feeling this will run on a while....

Re: Nigel Wray: Club Statement.
Old Col 23 January, 2020 18:22
So altruistic ! No hint of VANITY then -like wanting to be the owner of a champion club (at a hidden price ). No hint of understanding of the damage done to other clubs and the the integrity of the leagues as honest competitions for several seasons past ,nor any recognition of the the unfair ongoing and apparently uncorrectable this season ,destruction of the Premiership as a real level playing field competition .If not disreputable what else can the effect of his actions be classed as?
As for looking after the family-there are some examples of this in Sicily ,I think ! No,Old Col that is going too far--only joking ! "Consider yourself ,well in
Consider yourself one of the family ....."

Re: Nigel Wray: Club Statement.
Inbox 23 January, 2020 18:23
What a farce. The arrogance of an individual to claim his actions were “ill considered”. Frankly Mr Wray knew his strategy was “cheating” the system - just admit it.

I really do wonder how many other “staff” Mr Wray, both at the Rugby club and in his property companies, has entered into J/V’s “to care for their futures” by buying and investing in property and funding the mortgages?

So generous...



Edited 2 time(s). Last edit at 23/01/2020 19:06 by Inbox.

Re: Nigel Wray: Club Statement.
NW2 24 January, 2020 14:07
The stink surrounding this whole affair certainly doesn't get any less for reading this.

Re: Nigel Wray: Club Statement.
trummy200 24 January, 2020 16:24
There is a great summary on the Saints site by St Andy an ex detective - well worth a read ( Also posted on the Falcons site)

Re: Nigel Wray: Club Statement.
Fiver 24 January, 2020 17:19
Quote:
trummy200
There is a great summary on the Saints site by St Andy an ex detective - well worth a read ( Also posted on the Falcons site)

I thought I'd save others trawling to find it. A very good post:

Re: Sarries and the salary cap thread
St. Andy 23 January, 2020 16:42
May I say I have no contacts, no inside information, but I was in the police force for 17 years, most of it as a detective and often worked closely with the forces commercial fraud department, so this may give me a certain angle.

At the moment, especially on the Saracens board, they are, understandably looking for any little nugget to mitigate the case for the defence. I especially feel for the old time fans, who have done no wrong and wish them the best. But what they and some of us are looking at is the minutiae of the case, we are maybe failing to see the wood for the trees.

This sort of case is by no means unique in life in general, or sport in general but is probably the worst of its kind in rugby. It is about people, and one man in particulars hubris and arrogance, it is about money, it is about deceit. And in my view is not about this year, or the last three years, or even the last ten. It goes back to the last century. Also, like many cases it is not so much the crime that is seen as so heinous it is the continual cover up, with only anything actually being admitted once the evidence is overwhelming and not a hint of real contrition or apology to all the thousands of fans, employees and players of other clubs whose time, money, glory and medals they have stolen

Mr. Nigel Wray is not remembered fondly by Nottingham Forest Football fans, he had money, but wanted to be the sportsman who was parading around the pitch with the big silver cup. Unfortunately, money cannot buy you sporting talent for yourself, so the only way is to get others to do it for you. Mr. Wray realised, that even with his large wealth, the way football was going this was never going to be nearly enough to compete with the billionaires on the way. And he was right.

Rugby on the other hand was in its professional infancy and very much finding its feet. In the first instance I think there may have been a genuine attempt to grow the club and the fan base, with the free tickets, gimmicks and matches at Wembley. "If you build it they will come", but they didn't.

I remember us all being told that the astronomic losses were temporary and the club planned to at least break even within a few years. Eventually that message stopped and the South Africans had arrived complete with riches beyond the dreams of avarice. This I believe is where the rot really set in.

In spite of all the money. it could not be spent because of the salary cap, but that cap was only voted in by a slender majority, Mr Wray had to sign up to it and looked the other owners and stakeholders in the eye and lied to their faces, it looked like it was not taken particularly seriously by a number of clubs anyway. Saracens however were the ones who pushed it the most, with a myriad of South African stars gracing their team. And so the period of domination began, rumours abounded about monies and property being paid in South Africa.

The Saffacens era eventually evolved, into hoovering up UK and especially English talent and an academy which was excellent, although not quite as excellent as they would have us believe because it has been allowed to operate in a way that would have been impossible if abiding by the cap. This was a good plan because not only were the best English players playing for Saracens, they weren't playing for anyone else in the Premiership. It became increasingly suspicious that every other club would have to lose star players to stay within the cap, but Saracens never did in fact it was often Saracens they would go to. It was then the spin machine had to click into gear, it was about the academy, it was about the facilities, it was about the medical care, it was about the creche, it was about the bonding trips, the brotherhood, the wolfpack. The only thing it was never about was the money. And every signing, had the tagline attached "There is something special was happening at Saracens." Well at least that bit was true.

To keep the whole thing rolling on they managed to get one and then two marquee players outwith the cap. They could snap up a couple of players others could not afford, pay them what you like, thereby tilting the balance but it was not enough.

The deception was now in full swing the trophies were flooding in, but that was still not enough, now it was time to really rub our noses in it. From a Saints point of view, who can forget the free beer tent and the march en mass to the stadium. The loud singing of "their" song in the dressing rooms. In the stands, waving their free flags singing as "When the Saints go marching home," after yet another drubbing. Away from home, the lack of grace by putting a 2014 league champions sign up when they had lost the final, and the guard of honour with children in arms BEFORE the match.

Meanwhile me and I am sure many other fans across the country, would year after year scan down the team sheet and especially the replacements and ask ourselves, how do they actually, really afford all this lot and be under the cap.

And so it went on and progressed from domestic to European domination and matches in the USA.

This brings us to three years ago and it would seem the other clubs, who obviously knew more than they would ever let on to the ordinary supporter, decided this could not be allowed to continue, but because a couple of other clubs had breached the cap by a small amount, it was decided that a fine would be paid, a line drawn and the whole thing brushed under the carpet. Again Mr. Wray looked them all in the eye and agreed.

He knew though that to comply in future he would have to reduce his squad, less cups perhaps, less lovely photos of him and his team on the pitch with the big silver cup. "Can't have that, we'll do what we did last time and find a way round it." But this time it was supercharged, it would seem schemes were hatched and lot of money paid to lawyers for opinions. But opinions are exactly that, and different lawyers have different opinions. So instead of taking the schemes to the league to get them signed off or not, he ran with it and the salary cap breach sky rocketed. The likes of Saints were being thrashed by 50 or 60 points every time we played them. Enough was finally enough and an independent inquiry has been done. Of course by this time, it seems the South Africans had seen the writing on the wall and perhaps that Mr. Wray had become a loose cannon and left the scene.

Now it is perfectly fair to argue that the results of this inquiry have been handled badly with diplomatic language used, redactions and the thing coming out piecemeal, revealing slowly a picture emerging. That said it is clear Saracens have no way of getting below the cap this season and thus if they could make up the 35 penalty, with an illegal squad then the result would be an innocent club relegated. This would have been unacceptable. But even then they could've taken the forensic audit option, so I suspect they know that what that would reveal would damn them to relegation anyway. But before this we once again got the old lines about the academy, and perhaps the most sickening of all, the co-investments "looking after players futures." But it emerges not the marquee players futures, can pay them as much you like anyway, not the fringe players futures. No, only the ones we need to make it look we are paying less, to keep them and stay under the cap.

And so to the future, it seems that the RFU are bending over backwards for the Saracens players, Farrell is on about staying on, fine what about the others? The problem now is Saracens RFC need to cut all ties with Nigel Wray to come back with any integrity at all, but without his money they are a complete basket case, nobody is going to want to back them and the sponsors are already decamping. The brand is toxic. How then are they going to pay these players, even the vastly reduced amounts that they would need to to get under the cap? They certainly dont have the fan base to do it.

So the sorry saga draws to a conclusion, where nobody comes out with much credit. So I think the words of the character Valery Lugasov, who was the nuclear scientist who carried out the Soviet investigation into the Chernobyl. And no I am not saying the two are comparable but the words from the TV series where he told the truth and thereby damned himself to exile until his later suicide, are apt:

"Our secrets and our lies, they are practically what define us, when the truth offends we lie and lie until we can hardly remember that it is even there. But it is still there. Every lie we tell incurs a debt to the truth, sooner or later that debt is paid."

Re: Nigel Wray: Club Statement.
Faithful_City 24 January, 2020 17:55
Great posting

JP


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