Glaws CE insists Saracens should feel 'full force of points deduction'

[andermt]

I think you miss the point.  For example ...If they are both 50% shareholders in the development company.  Player X invests £500k Director Y invests £500k.  They  buy and development a site...sell the units and make say £500k profit...they both walk away with £250k each.  No payment to the player at all! The issue is that Player X has no experience or sufficient capital to do the thing himself and the additional £250k in his pocket would not have happened.  There is no payment to player...just business experience and a share of the financial capital.

I guess it depends on who has actually invested what in each company, if player X invests £200k, Director Y invests £800k, They buy and develop a site...sell the units and make say £500k profit...they both walk away with £250k each. Not sure in that instance it can be classified as a joint investment with equal shares......
Also as this is allegedly about property and who owns what, it's also about what any potential rents are being applied to player X in that property that may or may not quite be at market value, (another point that is included in the salary cap regulations).

Also, the point I mentioned from the regulations is about something that is only available to players of the club, I'd bet Director Y wouldn't do a joint investment with a player not at Sarries.

So, no I don't really think I did miss the point.

However I still expect them to get off as it would put into question a number of championship wins and not sure the RFU, Prem Rugby, EPCR & CVC want that can or worms opened.

[Neils]

"However I still expect them to get off as it would put into question a number of championship wins and not sure the RFU, Prem Rugby, EPCR & CVC want that can or worms opened."

So do I. However if it opens the EA deeds to all then some will lose out even more - I suspect Wasps couldn't yet finance similar actions but a few others certainly can.

[W2APS]

Nigel Wray can prove its not anything to do with the players being at Sarries by investing in players at other clubs and then not signing them for Sarries ever. Otherwise it is fundamentally linked to them being Sarries employees.

Sent from my TA-1012 using Tapatalk

[Tervueren]

Have any of these arrangements turned in any profit? If not then where is the transfer of value that could be counted towards the salary cap?

[King Prawn Phuna]

I think you miss the point.  For example ...If they are both 50% shareholders in the development company.  Player X invests £500k Director Y invests £500k.  They  buy and development a site...sell the units and make say £500k profit...they both walk away with £250k each.  No payment to the player at all! The issue is that Player X has no experience or sufficient capital to do the thing himself and the additional £250k in his pocket would not have happened.  There is no payment to player...just business experience and a share of the financial capital.

I guess it depends on who has actually invested what in each company, if player X invests £200k, Director Y invests £800k, They buy and develop a site...sell the units and make say £500k profit...they both walk away with £250k each. Not sure in that instance it can be classified as a joint investment with equal shares......
Also as this is allegedly about property and who owns what, it's also about what any potential rents are being applied to player X in that property that may or may not quite be at market value, (another point that is included in the salary cap regulations).

Also, the point I mentioned from the regulations is about something that is only available to players of the club, I'd bet Director Y wouldn't do a joint investment with a player not at Sarries.

So, no I don't really think I did miss the point.

However I still expect them to get off as it would put into question a number of championship wins and not sure the RFU, Prem Rugby, EPCR & CVC want that can or worms opened.

That's a good scenario where the Club director Y is clearly investing additional funds for the player X's benefit but all of the investment is recouped on the sale of the development, but the profits are split according to the shareholding.  No money has been paid by the director directly he has just facilitated the financing of a project for mutual benefit.

In this case the arrangement is very one sided and shouldn't be seen as normal business practice by the salary cap authorities who should have already been informed of a business relationship between a director and a player. In my opinion, Player should get £100k and Director get £400k i.e. he has £150k outside of what would be expected and that should be deducted from the cap.

In the real world though, the nature of the development companies set up aren't going to be that simple and it's going to take a while to unravel the actual additional value the player is going to get in the long run....meanwhile we await another Saracens European success and the setup of Daly's Dodgy Developments Ltd

...

[Rossm]

Daly's Dodgy Developments Ltd

LOL.

Is his dad called Arthur?

[MarleyWasp]

People always raise the comparison with CVC being the major stakeholders of F1 (formerly). The same comparison would be Ferrari to have been seemingly caught cheating (bending the rules) but the powers that be not really wanting to rock the boat with Ferrari for fear of hurting their product

But isn't that exactly what happened with the MacLaren spygate scandal in 2007 when CVC owned F1? that resulted in MacLaren being banned form the constructors championship for a year & fined $100 million.

Rumour has it the fine was never paid.........

Also that was not CVC, that was the FIA.

It was Bernie Ecclestone, CVC's defacto representative, who suggested the fine as an option. Half of it was by way of a loss of prize money after being kicked out of the Constructors Championship.

[BG]

Back to the rugby side of things - it would be nice if a newspaper employed someone with an accounting/legal background with no vested interest in rugby to go through the wording of the PRL Salary Cap rules and then apply those to what Nigel Wray has done because that's all its going to come down to. The argument isn't about whether these companies have been set up or not.. its there in black and white.

[Brandnewtorugby]

Have any of these arrangements turned in any profit? If not then where is the transfer of value that could be counted towards the salary cap?

My understanding of the implication is that that players end up with a large share of a business that they have put a small share of the investment into. Property investment could be as simple as buying a house, it doesn't need to turn a profit to retain its value.

[Tervueren]

If they end up with a large share for a small investment then they have profited, I am just not sure at what point they gain the value/benefit that can be counted. (I hope there is a way.)

[Raggs]

Even if they just live in the house, rent free, that's a significant benefit.

It's hard to see how it would be argued that it's not a benefit, clearly stemming from them playing for the club.  If somehow they do argue that, well, Bristol and Bath have far deeper pockets. I don't think Sarries can actually afford to "win" this in the long term, they need to lose it, then find some other way to cheat and pretend they didn't realise it was a problem.

[Tervueren]

I agree, if they live rent-free then it is a benefit, but do we know that they are?

To me it does appear that a circumvention of the cap is underway, but it seems that some of the benefits we are suggesting might not actually have happened yet.

[mike909]

Benefits in kind

Two examples from Citizen's advice

Accommodation
Generally, if you’re provided with accommodation either rent-free or for a rent which is below market rent, the difference between the rent you pay, if any, and the annual value of the property is taxable.

Below market rent means below what you would normally expect to pay to rent a similar property.

Annual value is usually taken to be the same as gross rateable value.

An extra charge will be made if the accommodation cost more than £75,000 when it was bought by the employer.

Loans
Interest-free and cheap loans are taxable.

[Tervueren]

Do any of the Sarries "business arrangements" result in players living in subsidized accommodation or having received a loan? If they do then the salary cap rules cover it.

I am still not clear with these arrangements at what point a benefit is conferred and so contravenes the letter of the cap rules, even if the intent of the cap is being roughshod over.

[Marlow Nick]

I got the impression that the rent-free living etc was part of the last round of cheating mis-understanding about the cap rules and this time it's not abut accommodation it's about investments for which the fact that it involves buildings is largely irrelevant - it could be businesses such as coffee shops or breweries or it could be any other time of long-term investment that generates profits which are only realised after the player retires and hence are hoped to be off the radar of the cap police