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Re: Salary cap breaches revealed
Posted by: stevene
Date: 23/01/2020 13:33
Redacted report here:


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.

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