Sarries and the Cap

[RBB]

And here is what they have said https://www.saracens.com/news-article/club-statement-co-investment-partnerships-between-the-saracens-owner-and-players

“Firstly, we would like to reiterate that the Club readily complies with Premiership Rugby salary regulations and information relating to remuneration is declared to the salary cap manager. Although co-investment partnerships between owners and players are not a prerequisite of the salary regulations, we disclose these transactions to Premiership Rugby and will continue to do so."

This will run for a while I would think.

[InBetweenWasp]

I’m pleased they’ve issued a public response and if they’ve been declaring it to PRL and PRL are happy that it is within the confines of the cap, then so be it and good on Sarries for finding a (legitimate) way to foster the careers of players after their playing career.

It would be easy to continue with the conspiracy theories, but unless the Daily Mail has a series of articles with further evidence that contradicts the Saracens’ statement or the PRL disagree (hopefully they too will issue a statement tomorrow confirming it’s a non-story) then I think we have to take these things at face value, or else risk sounding like bitter fans - Perhaps they’re environment and their academy really do afford them the squad within the £7.7m they have to play with (which is presumably also before EPS credits?).

[Raggs]

Well if the co-investment isn't included in the cap. Bath and Bristol will start even more building of their squads.

[Hymenoptera]

If there is a grey area and they are exploiting it then it is what it is, but for their fan's to go on every board and proclaim players are desperate to join them for pay cut's just because they are Sarries is utter pants.

Providing subsidised housing or housing loans or investments on property then sold at a later date for gains with players as stakeholders...while offering Daly 100k a year is BS and nothing to do with career furtherment, its allowing cap room for bringing in yet more Intl players. Having an owner worth 315m which can facilitate this beyond every other club isn't a fair playing field. All of these appear setup/closed on contract start and end...what does that say.

We all know you can't have the roster they have had over the years by any other means other than subsidization...I have no sympathy for them and will say what I want on the matter, bitter sounding or not.

[Dgwasp]

If there is such a gaping grey area you may as well do without the cap all together because it is no longer enforceable... And I don't see doing away with the cap as a good thing.  Unfortunately all laws of the game have to comply with UK and (for a while) EU law, it is almost impossible to enforce the salary cap without a modicum of cooperation from the clubs involved and it is not a surprise that Sarries are unwilling to offer any cooperation...

It is a bit of a risk from a player perspective mind, if they're accepting an artificially low salary in the expectation of additional money through a joint investment, I wonder what security they have around the investment should anything happen to Mr Wray?

[Rossm]

More from the Mail today.

https://www.dailymail.co.uk/sport/sportsnews/article-6770759/Premiership-clubs-former-players-join-calls-Saracens-salary-cap-inquiry.html

[RBB]

The 'alleged' loophole makes a mockery of the cap. The investment, which ultimately is designed to bring a positive return in terms of money, would not be available to the 'alleged' players if they played elsewhere, so it is an incentive designed to attract or retain. Therefore using that as a principle it is an incentive which remunerates the players and if added to the cap, notwithstanding allowances and tolerances, then the maximum permitted is breached as the investors are intrinsically linked via the rugby club. This scenario given the investment power of the owner and his core business interests (property and investing), that in my mind gives Saracens a distinct advantage over other clubs and thumbs a nose at the rules.

However I feel that Saracens have not actually broken the rules but exploited a loophole in a non explicit area. The loophole has to be closed now and enforced from next season, otherwise the situation moving forward will only get worse as other resource rich clubs via ownership will jump on the bandwagon. We have one of the most competitive premier leagues in memory this year (okay the top two have got away), not closing this situation down will make competition a nonsense and rugby runs the risk of being like football (read Man City), I for one would be appalled if that happened.

And if anyone is interested, here's a snapshot of Nigel Wray's portfolio https://www.marketscreener.com/business-leaders/Nigel-Wray-05HPFM-E/biography/

[Vespula Vulgaris]

Part 2

https://www.dailymail.co.uk/sport/sportsnews/article-6770759/Premiership-clubs-former-players-join-calls-Saracens-salary-cap-inquiry.html

[RBB]

I agree with Andy Goode.

[Fats]

Saracens’ former owners feared salary cap breach
Owen Slot, Chief Rugby Correspondent
March 5 2019, 12:00am, The Times

The South African former co-owners of Saracens sold their 50 per cent shareholding in spring last year in part because they were uncomfortable about whether the leading club in England were obeying the Premiership salary cap rules.
Saracens’ adherence to the salary cap was being investigated yesterday after a newspaper exposé that found that Nigel Wray, who is now the club’s sole owner, had entered into business partnerships with some of the club’s leading England players, including Owen Farrell and the Vunipola brothers.
Premiership Rugby said yesterday that it would “look closely” at these business partnerships with Wray, the 70-year-old property investor whose personal wealth is estimated at about £315 million, to ensure that there had been no breach of their salary cap rules.
Saracens said that all the details of the business partnerships that were in the Daily Mail yesterday had already been declared to the Premiership salary manager.
The South Africans, who owned half of the club, were concerned about the club and whether it was breaching the cap. They made it clear that if the club were not under the cap, and within the spirit of the cap, then they would leave.
When they did sell last year, after nine years of ownership, Johann Rupert, the businessman rated by Forbes as the fifth-wealthiest man in Africa with a net worth of $5.3 billion (about £4 billion), walked away, writing off debts of about £25 million.
Rupert is mainly based in South Africa but he was represented by his daughter, Caroline, who was a board member and asked in a board meeting for reassurance that the club were complying with the Premiership salary cap rules. She was given assurance that the club were inside the cap. She asked for the conversation to be minuted.
However, in 2015, Saracens and Bath were found guilty of breaching the rules of the cap. On that occasion, the Ruperts and their company, Remgro, elected to stay with the club. Last spring, they finally sold their stake.
The Times understands that the South Africans always asked for an unequivocal answer as to whether they were within cap. When they asked questions, they were told that the cap rules were open to interpretation.
Documents at Companies House reveal that Wray, Billy Vunipola and Mako Vunipola are shareholders in the property investment company VunProp Ltd, while Farrell and Wray are joint shareholders in a financial management firm, Faz Investments Ltd. Wray has a similar partnership with Saracens’ former England scrum half Richard Wigglesworth in a company called Wiggy9 Investments Ltd.
Under Premiership Rugby salary cap rules, all arrangements and contracts between players and club officials must be declared to the league’s salary cap manager Andrew Rogers.
A Premiership Rugby statement yesterday said that it took the salary cap framework “very seriously” and would be considering this information on Saracens “in detail”. It said: “Premiership Rugby has a duty to all clubs to deliver the system in a transparent, objective and non-discriminatory manner. Any decision on follow-up action would be taken with the assistance of independent bodies in accordance with the regulations.”
Saracens responded in a statement last night that said: “Firstly, we would like to reiterate that the club readily complies with Premiership Rugby salary regulations and information relating to remuneration is declared to the salary cap manager.
“Although co-investment partnerships between owners and players are not a prerequisite of the salary regulations, we disclose these transactions to Premiership Rugby and will continue to do so.”
The statement also emphasised that the salary cap rules gave clubs dispensation to spend beyond the £7 million according to how many home-grown players that they developed. The present squad, it said, contained 57 per cent home-grown players, which allowed the club to spend £1.2 million beyond the £7 million.
The arrival of the South Africans at Saracens nine seasons ago triggered the most successful period in the club’s history. The success only became a habit when a golden crop of home-grown players, including Farrell, Jamie George and George Kruis, came through their academy.
As the Farrell generation came through, their salaries grew from the comparatively small contracts that they were on in the academy to deals in the region of £500,000 a year.
This has taken them beyond the £7 million mark. Many fans of rival clubs believe that they must have broken the rules. Last month, when Saracens signed Elliot Daly, the Wasps player, to join next season on another high salary, some rival owners were exasperated.

[Neils]

If you can look at Twitter Ryan Walkinshaw has just posted a series of tweets agreeing that the cap is being somewhat stretched. In one he even says one club owner offered to assist him in "bending" when he took over.

[BG]

Who's Ryan Walkinshaw?

[Neils]

The tweets are cut and pasted in full on DW. Former owner of Gloucester.

[Vespula Vulgaris]

Tweets in full.

1. A couple of notes for anyone that cares in @premrugby salary cap and the allegations made by the @MAILrugbyunion

2. There is literally zero doubt that some Clubs break the salary cap. I have heard a number of Club owners admit it to my face. When I started I even had one offer to help me ‘bend the rules’. Another laughed at the ease with which he broke the cap at lunch with me once...

3. There is a difference between working in the grey of the rules, which many if not all fully funded playing departments are doing, and consciously breaking the rules, which only a small number do/did.

4. I personally see salary cap breaching in the same way I see performance enhancing drugs. One is financial enhanced performance and the other is chemical enhanced performance but both have a similar effect on a Club’s ability to deliver on the pitch.

5. It is extremely hard to quantifiably prove a Club has consciously broken the salary cap as it must obviously require evidence of the breach in order to find a Club guilty. This can come in many forms but clever accounting and tight lips makes this very hard.

6. An example. I hire player A from NZ to come join my Club. I can only fit in £200k into my salary cap for player A but he wants £800k. Solution is simply to pay the player through a separate company or buy the player an asset, such as a house, to cover the gap.

7. In this example player A will show only a £200k direct cost to the Club and salary cap. Whilst in fact the owner of the Club is effectively playing player A significantly more. So, how can they get caught doing this sort of thing?

8. The Club can get caught in a few ways, such as the player deciding to admit the breach and provide evidence to PRL or for there to be a financial trail that shows that a Club owner has paid the player somehow around the back of the Club’s accounts.

9. Frankly both those scenarios are unlikely as PRL cannot really get their hands on private information from a Club owner, or a player, if those individuals don’t want them to. The player also has no incentive to admit the breach and offer evidence as they may lose out.

10. What was fascinating during the 2014 ‘alleged’ breaches was the attitude of the Clubs. I fought hard to try and ensure that the alleged Clubs in breach would be brought to justice. Sadly I was one of only a small handful of Clubs who shared that same mindset.

11. Many of the Clubs held surprising positions on this such as claiming it wasn’t in the best interest of the sport to punish Clubs in breach, or shaming them publicly. That any breach should be either swept under the carpet or at worst done privately behind closed doors.

12. This led me to believe that many more Club’s were potentially in breach than I had initially feared. This also demonstrated that whilst PRL executives may have been keen to punish, the majority of Club owners themselves were not.

13. In my mind this attitude essentially opens the door for more breaches as the precedent had been set that Club owners didn’t really want Clubs to be punished, particularly publicly which is what would matter more than the mere financial risk of a breach.

14. The financial penalties for a breach can be severe, but if you’re of the wealth of some of the owners it could be argued the risk is worth the potential reward. The only real deterrent for all, no matter your wealth, is the public shame that surrounds cheating.

15. Without the public shame of being caught and punished, a salary cap breaching strategy by an offending club becomes merely a financial risk assessment. Real punishment is fans, sponsors and even other players knowing you cheated. This would deter other Clubs too.

16. Much more I could say but I won’t elaborate further. But bare in mind you, the fans, are the ones being cheated by this. You pay to watch your Club perform, and when a competing Club is cheating in this manner it reduces the likelihood of your Club succeeding. Get angry.

[BG]

The tweets are cut and pasted in full on DW. Former owner of Gloucester.

Thanks. I did wonder if he was related to Tom Walkinshaw and Glos. I presume he has little to do with rugby now having made those comments