Salary Cap

[Neils]

https://www.dailymail.co.uk/sport/rugbyunion/article-7580909/New-Premiership-season-begin-cloud-salary-cap-investigation-Saracens.html

The very strong smell of Fudge is starting to rise.

[coddy]

Did we seriously expect anything else?

[Neils]

Nope. Wray controls it all.

[mike909]

Saracens responded to questions from Sportsmail in March by insisting that all co-investment and the house-sharing between Wray and players had been declared.

However, some weeks later Premiership Rugby (PRL) issued a statement announcing there would be a formal review into the evidence as they were not aware of all the co-investment arrangements 'between connected parties and players'.

Saracens blamed a 'minor internal oversight' for not having disclosed all the details and denied any wrongdoing, issuing a statement saying that 'co-investments are not part of the salary regulations'

So, basically, we provide more money to players (and only players for Sarries) than the salary cap allows, but it doesn't count because we say so.....

Ho hum...

[W2APS]

Well if they get away with it everyone else will start doing it too.

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[Neils]

Well if they get away with it everyone else will start doing it too.

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But not everyone can afford to do it so it becomes a two/or more level league.

[BG]

Well if they get away with it everyone else will start doing it too.

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But not everyone can afford to do it so it becomes a two/or more level league.

Exactly - The Salary Cap was partly introduced to stop clubs spending themselves into extinction. I'm guessing 80% of the clubs couldn't spend much more than they currently do (£7m - credits + marquee amount + other club wages and expenses).  Only Bath and Bristol have the same sugar daddy finances but as yet they don't seem to be pursuing other ways to pay more wages outside of the salary cap (that we know of).

I only hope that the 12 other club owners stand by their view that the scheme Wray has used is a way of paying players more money outside the salary cap.

[welsh wasp]

BG: Might our owner or his businesses also fall into the sugar daddy category?
I assume co-investments are "OK" provided both parties have money to invest in the schemes. If it all comes from one, then that suggests a device outside the salary cap - which Premiership Rugby could/should/might/may (which word fits?!) decide is wrong.

[InBetweenWasp]

BG: Might our owner or his businesses also fall into the sugar daddy category?
I assume co-investments are "OK" provided both parties have money to invest in the schemes. If it all comes from one, then that suggests a device outside the salary cap - which Premiership Rugby could/should/might/may (which word fits?!) decide is wrong.

Our owner who is supposedly worth £50m or so, versus a billionaire and Wray worth hundreds of millions? I don’t think it’s quite the same league.

The issue whether both parties have money to invest in the schemes.  The issue is that you cannot control this being a vehicle whereby in, 1, 3, or 5 years time (or however long), Nigel Wray sells his stake to Farrell or Billy etc... for £1, or relinquishes his shares to the other Party and effectively ‘donates’ them giving the player, or ex-player a payday or an asset worth hundreds of thousands.

Yes, investments may go up or down but there’s no suggestion that these are high-risk, unstable investments and every suggestion that it is low-risk stuff like property. 

Therein lies the issue.  How do PRL police such investments, or ensure that the players only gain from the share they originally put in and not disproportionately aka flouting the cap?

[mike909]

Its clear that on other forums - discussing the opening of the Prem season, Sarries supporters are trying to suggest that its because Sarries are such good employers that players come to them

Well - that might be true - but a quick look at recent signings - probably near Lions starters (Daly, Williams) don't come to Sarries because of a love of plastic pitches and education opportunities......

[Marlow Nick]

If you want to add fuel to the debate it's interesting to see the additions that have been put into the salary agreement for this season (agreed back in February so before any recent investigation)

Budget is unchanged at £6.4m plus credits
Additional clauses ...

A reference to section 1122 of the corporate tax act 2010 ... Which to my uneducated eyes seems to say that any company operated exclusively on behalf of an individual shall be considered to be that individual ... Does this suggest someone has been channelling funds to companies?

Clubs to assist accountants in a timely manner. Plus new clause about penalties for delays ... Does this suggest that someone has dragged their feet in order to allow their lawyers to massage any submissions to the accountants?

Clubs to provide full financial records of player benefit year including any 3rd party contributions to benefit years ... Has someone been boosting salaries?

Clubs to provide receipts for family immigration costs

Any payments or benefits which on the balance of probabilities should be considered as salary especially if it was agreed at the same time as a contract or exceeds market value of the service provided ... Does this suggest someone has been giving below market services when signing new players?

[mike909]

That's all very interesting Nick

I believe that you would likely be correct in your understanding - especially re "balance of probabilities" which is a much lower level of evidence required than would be needed by criminal law!

[BG]

A reference to section 1122 of the corporate tax act 2010 ... Which to my uneducated eyes seems to say that any company operated exclusively on behalf of an individual shall be considered to be that individual ... Does this suggest someone has been channelling funds to companies?


Clubs to provide full financial records of player benefit year including any 3rd party contributions to benefit years ... Has someone been boosting salaries?

To the first point - I think this means that PRL will view any LTD company where the player is a director and that it appears that there are no employees or outgoings other than paying the director a wage or end of year dividends will not been seen as a Ltd company but as a single sole trader.

This only becomes relevant if income being paid into the LTD company is somehow related back to Sarries or associates related to Sarries.

There's nothing wrong with players earning addtional money outside of the Sarries wage (endorsements, book sales, England appearance money).

The 2nd point seems to be yet again missing the crux of the issue at hand.

The money that might be generated by the joint venture companies won't appear on the books of Sarries so aren't considered to be a company "benefit".

These are ventures between the player and Wray personally (or one of his business partners)... so the bigger question is whether the link between the player and the club, the club and Wray, and then Wray to the player constitutes a benefit that should come within the salary cap. In my view, yes.

[Heathen]

Is player sponsorship outside the salary cap?

[Neils]

Must be or we wouldn't be doing it.