Melbourne Storm stripped of '07/09 NRL Titles for Systematic Salary Cap Breaches.

toomevara

Astonishing news from Down Under. Melbourne have been found guilty of systematic cheating by consistently and deliberately breaching the salary cap to attract the biggest names in RL. A seismic shock for the game in OZ. They've also been stripped of three minor prems, fined 1.6 mil in Aus dollars and wont be allowed accumulate any points this season. It seems their success of the past few years has been built on serial dishonesty and, well.... straight up cheating....

From The Australian today;

Melbourne Storm Stripped of Two RL titles over salary cap Fraud.

MELBOURNE Storm has been stripped of two NRL titles and three minor premierships for rorting the salary cap system in an unprecedented day for rugby league in Australia.

The club has been found guilty of running two separate books, one detailing the players contracts showing they were complying with the NRL's salary cap and a second file that detailed payments made to players that should have been declared to NRL auditors.

It was found Melbourne had cheated the cap by $1.7 million over the last five years, including approximately $700,000 in 2010.

“The elaborate lengths they went to hide the payments was quite extraordinary.” NRL chief executive David Gallop told a stunned press conference in Sydney this afternoon to announce the stiff penalties for the salary cap breaches going back five years.

The club has been one of the most successful in the league since entering the competition in 1998 and has appeared in the last four grand finals in a row, winning in 2007 over Manly and 2009 over Parramatta.

Those premierships and the money won there as well as the cash paid for winning the minor premiership from 2006-2008 will now be divided between the 15 other clubs.

Gallop said neither Manly nor Parramatta would be awarded the premierships for 2007 and 2009 and the record books would simply show that the NRL titles were stripped for those years. Melbourne's initial premiership in 1999 will remain.

Gallop said that Storm officials had confessed to paying players outside the NRL salary cap.

John Hartigan, chairman of News Ltd, publisher of The Australian, said several administrators involved in the fraudulent behaviour had been sacked.

“News doesn't tolerate behaviour like this. I feel sick to my stomach,” Hartigan said. “While the penalties are unprecedented, I believe they are warranted.”

News has propped up Storm financially since it came into the league.

Melbourne has been stripped of its eight competition points from four wins so far for 2010 and will not be given any further competition points this season.

It is the biggfest salary rort for the NRL.

In 2002 the Bulldogs were stripped of 37 competition points and fined $500,000 for being $1 million over the cap that year, which was $3.25 million.

The current salary cap for all 16 clubs is $4.25 million.

http://www.skysports.com/story/0,19528,12196_6108354,00.html

IH77

One of the biggest scandals in Aus sporting history! As a parramatta fan I am gutted that we lost to the cheats last year in the final and won't be awarded the title :mad:

toomevara

Yep, an absolute disgrace. Going to have massive repercussions. Just brings the whole game into disrepute. Do leeds get the World Club Championship back now?..

IH77

toomevara wrote: »

Do leeds get the World Club Championship back now?..

I wondered whether they would be stripped of that as well, if they were I assume Leeds would not be given the title (in line with the NRL decision).

But do superleague clubs have salary caps? If they don't then Storm could argue that salary cap breach not relevant in that case.

AdeT

IH77 wrote: »

But do superleague clubs have salary caps? If they don't then Storm could argue that salary cap breach not relevant in that case.

They do. There have been some (much much smaller) salary cap fines in SL.

For some of the top clubs to remain under the cap, Leeds, Wigan, Saints and now Hudds (if you look at their players), there must be some very shrew money management going on in SL.

toomevara

IH77 wrote: »

But do superleague clubs have salary caps? If they don't then Storm could argue that salary cap breach not relevant in that case.

I was just being facetious about the WCC, frankly it means little in real terms, and no doubt the least of the Storms' worries! SL does have a salary cap and clubs, such as Wigan have been fined/docked points for breaches in the past.

Indeed the more I read about this the more jaw-dropping it becomes. Its clear that the Storm maintained two sets of books, one fake to show compliance and one where the 'real' contracts were kept...absolutely amazing levels of deception and arrogance...This BBC report is pretty indepth;

http://news.bbc.co.uk/sport1/hi/rugby_league/8636565.stm

mountain

Its amazing that this has happened, Im glad there is a proper punishment for this,

Im looking forward to the Roy and HG podcast on Triple M tomorrow, should be very interesting.

old_aussie

hahahahahahahaha

Haven't watched league since super league tried to put the ARL out of business.

Came home and took the TV antenna down and it's still not been put back up.

It's good to see the NRL going deeper into oblivion.

Hope this destroys their fan base.

Union must be rolling on the ground laughing and rubbing their hands with glee.

NRL management is a bunch of gutless **** when it comes to scrutiny and even more gutless when it comes to enforcing the rules and laws regarding their players.

NRL goes fron one embarrassment to another, continuing the downhill slide.

Gallop and his gay boy administration are the template for failure.

It's players are made up of drunks, street thugs and rapists.

toomevara

old_aussie: banned: two months

toomevara

mountain wrote: »

Its amazing that this has happened, Im glad there is a proper punishment for this,

Im looking forward to the Roy and HG podcast on Triple M tomorrow, should be very interesting.

You just have to wonder how far this goes in terms of complicity; players, agents, coaches, boards??..and does it start and stop at Melbourne?

mountain

toomevara wrote: »

You just have to wonder how far this goes in terms of complicity; players, agents, coaches, boards??..and does it start and stop at Melbourne?

Toomevara, I have felt that you are a reasonable man, but to be dragging devore and others into this is just taking things too far....:D

The CEO at the time this started has gone to front up the new franchise for Super 15 in melbourne, wonder how long he will last there?
http://www.smh.com.au/rugby-league/league-news/melbourne-storm-stripped-of-premierships-for-salary-cap-breaches-20100422-td91.html?autostart=1

Its a pity that melbourne got up to this, NRL players have been getting into trouble, adn now this, while Im glad that melbourne have been found out, it does the general game no good.

toomevara

mountain wrote: »

The CEO at the time this started has gone to front up the new franchise for Super 15 in melbourne, wonder how long he will last there?
http://www.smh.com.au/rugby-league/league-news/melbourne-storm-stripped-of-premierships-for-salary-cap-breaches-20100422-td91.html?autostart=1

Now that's an interesting point.....

amacachi

I was recently saying to my dad that I found it odd how well Melbourne were doing when it wasn't the usual home of the game, and maybe the NRL were turning a little blind eye to help them along, help spread the game...
Turns out it was being done without the NRL's help, and this is just going to turn a lot of people off the game down under. Bloody idiots.

IH77

So the Storm don't get any points this year. But what happens if a team loses to the Storm, does the losing team get the 2 points?

The more I think about this the more livid I am. The Storm should be kicked out of the comp for the remainder of the season given these breaches have occured this year.

amacachi

IH77 wrote: »

So the Storm don't get any points this year. But what happens if a team loses to the Storm, does the losing team get the 2 points?

The more I think about this the more livid I am. The Storm should be kicked out of the comp for the remainder of the season given these breaches have occured this year.

No, the Storm can still spoil things for other teams as I read it.

Stev_o

Giving the Storm a defunct year makes no sense, if the NRL was committed to spreading RL in Melbourne then this decision all but kills it, who's going to continuing supporting a team that for this season can't do anything whatsoever. Mean strip them of like 10 points or some other handicap but basically destroying their fan base for this year just makes no sense.

Honestly i bet that these dodgy account details are present in a lot more clubs in both League and Union.

toomevara

mountain wrote: »

The CEO at the time this started has gone to front up the new franchise for Super 15 in melbourne, wonder how long he will last there?
http://www.smh.com.au/rugby-league/league-news/melbourne-storm-stripped-of-premierships-for-salary-cap-breaches-20100422-td91.html?autostart=1

He's been sacked, pretty fast moving stuff....

http://www.boards.ie/vbulletin/showthread.php?t=2055891315

toomevara

Stev_o wrote: »

Giving the Storm a defunct year makes no sense, if the NRL was committed to spreading RL in Melbourne then this decision all but kills it, who's going to continuing supporting a team that for this season can't do anything whatsoever. Mean strip them of like 10 points or some other handicap but basically destroying their fan base for this year just makes no sense.

Honestly i bet that these dodgy account details are present in a lot more clubs in both League and Union.

Its massively unfortunate that in all these scenarios its the fans who get it. I think about the folk from Melbourne who I met at Elland road at the WCC this year. Followed their team all the way from Oz and the impact something like this must have on them...

TBH though Stev_o, i think the scale of this scandal is absolutely huge, the systematic, concerted and prolonged nature of it is totally unprecedented...

Look I've no doubt there's always been fiddling around the fringes, blurring the lines etc...thats human nature, but this appears to be an order of magnitude above all that, and as I said in an earlier post, who else is is tacitly or overtly complicit in this? Surely agents, players themselves etc... must have been aware that all was not strictly kosher on some level...a huge can of worms has just been opened I think and I reckon the repercussions are going to be extensive. This could be the thin end of a very thick wedge....

Funkstard

In Melbourne here. Talk about earth-shattering! I wonder does this begin and end with the Rebels however?

toomevara

Funkstard wrote: »

In Melbourne here. Talk about earth-shattering! I wonder does this begin and end with the Rebels however?

+1, my point entirely, I'm thinking dominoes here....

amacachi

I'd also be surprised if it's only Melbourne tbh. The salary cap does seem very low. Not that I'm condoning what they did in the least.

IH77

Well they are looking at the WCC, but in terms of the prize money awarded to the Storm. Fair enough too.

Link

Leeds Rhinos will not ask to be awarded rugby league's World Club Challenge (WCC) title after champions Melbourne Storm were stripped of two of their NRL premierships for salary cap breaches.
Rhinos chief executive Gary Hetherington says the scandal highlights the achievements of his English Super League club, who lost to the Storm 18-10 at Elland Road in February.

"Melbourne Storm have been the dominant force in the NRL over the past five years and it is clear to see why now," Hetherington said.
"I think if anything it actually elevates the achievements of our players. In 2008 we managed to beat Melbourne and this year we pushed them all the way."

The teams met to contest the match between the Super League and NRL champions in 2008 and this year, after the Storm won the 2007 and 2009 premierships.

On Thursday, the Storm were stripped of their NRL titles, plus three minor premierships, fined $500,000 and forced to repay $1.1 million in prize money after being found guilty of long-term salary cap breaches.

But NRL chief executive David Gallop says neither losing grand finalists Manly or Parramatta will assume the titles of 2007 and 2009.
Hetherington took a similar view of the WCC, but he expected the Rugby Football League (RFL) to make a decision regarding the $83,167 prize money the Storm took from the match.

"I have noticed the punishment in Australia has seen Melbourne stripped of their titles in their domestic competition, but those titles have not been awarded to the teams that they beat and I think that is correct," he said.

"Trophies are earned on the day of the game and we would not look to seek the awarding of the world title after the event.

"However, Melbourne have also been stripped of the prize money they obtained during the period in which they were found guilty and I am sure this is something that the RFL will be looking into."

Xavi6

Just watching the NRL Footy Show here and it's unbelievable how they had two sets of books - one to show the league and the other for the real outgoings.

amacachi

I just don't understand how there wouldn't have to be some kind of crossover at some point between the two sets of books though. It's amazing it's taken this long to catch.

IH77

The Storm still have to play Parramatta and Manly at their respective home grounds this season. As an Eels fan that's almost worth flying home for

Xavi6

The thing is, the players must have known they were getting their income from two different sources.

Wonder will any action be taken against them.

amacachi

Xavi6 wrote: »

The thing is, the players must have known they were getting their income from two different sources.

Wonder will any action be taken against them.

Was wondering that myself, but would there be any chance they were just getting paid from the hidden books?

IH77

reports on NRL.com say that the NRL are blaming the officials, not the players. However there is also talk of a possible police investigation which could change that I suppose.

toomevara

IH77 wrote: »

reports on NRL.com say that the NRL are blaming the officials, not the players. However there is also talk of a possible police investigation which could change that I suppose.

If this ends up in the courts it quickly becomes a whole different ball game...As Xavi said earlier the number of people who had to lend at least tacit support to this must be quite far reaching...

couerdelion

I think the punishment is harsh in respect to nothing to play for this year, but I'm guessing that they will be still over the cap if players were being played from two sources(?)Hope Leeds get the World Club challenge trophy and the £50k!

thomond2006

I don't follow RL but this is a fascinating case.

Is the club's future in doubt?

amacachi

thomond2006 wrote: »

I don't follow RL but this is a fascinating case.

Is the club's future in doubt?

Hard to know, one of the few teams outside of the usual home of the sport and the only one in Melbourne.

IH77

couerdelion wrote: »

I think the punishment is harsh in respect to nothing to play for this year, but I'm guessing that they will be still over the cap if players were being played from two sources(?)

They have also breached the cap in 2010 so I think it is right they are punished this year.

toomevara

thomond2006 wrote: »

I don't follow RL but this is a fascinating case.

Is the club's future in doubt?

Time you got on board...;) As of now no, I don't think there's an existential threat to the Storm, but I sense there's a long way to go on this and its not fully played out yet. As a fan I'd feel robbed and betrayed by my team had this been say Leeds and I'd have to seriously evaluate my support....

IH77

toomevara wrote: »

Time you got on board...;) As of now no, I don't think there's an existential threat to the Storm, but I sense there's a long way to go on this and its not fully played out yet. As a fan I'd feel robbed and betrayed by my team had this been say Leeds and I'd have to seriously evaluate my support....

They will lose a lot of their supporters over this alright, given it is Melbourne many of those will probably turn their back on RL altogether.

I still maintain they should be suspended from the comp for the remainder of this season. Why should other clubs have to play them for two competition points when they are still fielding a team that breaches the salary cap?

IH77

Sucks to be this guy

Xavi6

Major sponsor ME Bank has just dumped the club. That's gonna cripple them even more.

They'll fold IMO.

toomevara

Xavi6 wrote: »

They'll fold IMO.

I hadn't anticipated that, some sponsors are deserting the club, its looking increasingly like they'll go under. Amazing stuff...

From The Australian;

Melbourne Storm sponsors abandon club over salary cap rorts.

MELBOURNE Storm major sponsor Host Plus has joined Member's Equity Bank in a mass exodus from the club in the wake of revelations of massive salary cap rorting.

The two major sponsors' names were removed from the Melbourne Storm website within minutes of the decision by Host Plus CEO David Elia to scrap the three-year agreement with immediate effect.

ME Bank also joined sports fashion company Skins today in saying it was ending its sponsorship of the team.

Mr Elia described the relationship as untenable.

Caravan company Jayco and car maker Suzuki will assume the position of the club's major sponsors from this weekend.

The swift departure the club's main sponsors presents the real prospect that the team could fold, as conceded by club chairman Rob Moodie this morning.

Mr Moodie, who says he was unaware of the rorting but has nonetheless offered his resignation, said: “Some (Storm employees) will want to walk, some fans will want to walk.

“Some sponsors will obviously want to move on. We understand that.”

ME Bank was seeking urgent meetings with Storm management last night, but wasted no time this morning in deciding to end the $1 million-plus sponsorship that was to run until the end of next season.

Skins was also forced into action by the revelations, with the company running an advertising campaign using the tagline “cheat legal” that suggested using the product was a way to cheat legally rather than using drugs or taking secret payments.

ME Bank joined the Storm last season on the back of the success super fund Host Plus had had sponsoring the team.

ME Bank chief executive Jamie McPhee said they were extremely disappointed to discover the Storm had rorted the salary cap by concealing $1.7 million worth of player payments over a five-year period.

“As an organisation ME Bank believes in the principles of strong governance, transparency, integrity, and fairness and we seek to ensure that all of our corporate and community partnerships uphold these same values,” Mr McPhee said.

Other sponsors were assessing their options today, with fashion company Kooga saying it would make a decision by this afternoon whether to dump the club.

Car maker Suzuki said it would await meetings with Storm management next week before acting, but said it had enjoyed a good relationship with the club over the last three years.

hussey

ticket sales will drop next to nothing, who wants to see a team who cheated their way to the top and have nothing to play for ...

toomevara

Looks like there may be a fire-sale down Melbourne way...The likes of Greg Inglis and Billy Slater wont have to hang around long I'd imagine...

http://news.bbc.co.uk/sport1/hi/rugby_league/8639487.stm

mountain

Its hard to imagine that the players didnt know what was going on, they were getting money "on the side/under the table", i wonder will any of them be investigated.

On another note, it seems kinda comical that one of the ways of laundering the money was to put it down to the hiring of a marquee, sounds a bit "father ted" ish

wicklowwonder

any word on Gold Coast heard they also under investigation

thomond2006

I expect Melbourne Rebels will have a keen eye on all this.

Stev_o

thomond2006 wrote: »

I expect Melbourne Rebels will have a keen eye on all this.

If they have any sense they should grab Inglis for the year with a decent enough contract with the option of a extension at the seasons end if he isn't offered by a NRL club. But tbh no club will be able to fund Smith, Slater or Inglis their accounts will be stretched as it is.

Stev_o

What's got 26 legs but can't climb a ladder?

The Storm

What does a triangle have that the Storm doesn't?

Three points

toomevara

This, from the Herald Sun, is quite an eye opener. The implication is that rorting is widespread, also insightful on how it was/is done...For example, assigning a particular player a particular poker machine so that all money generated by it goes to him...the mind boggles. The 'overs' system and the fact that its increasingly clear that some players were well aware of precisely what was going on...A mucky business and I don't reckon this will stop at melbourne...

Explosive files detailing secret payments to Melbourne Storm players exposed.

John Ferguson, Nick Leys From: Herald Sun April 24.

EXPLOSIVE new documents detailing secret payments to Melbourne Storm players were handed to investigators.

Acting Storm boss Matt Hanson surrendered documents, kept at his home, that detail allegedly illegal third-party payments to three players.

But they show that in at least one case the player was told all payments would be kept within the salary cap.

Sources said police also spoke to auditors investigating the paper trail left by several Storm officials.

The Herald Sun believes Storm and the NRL were handed the dossier, which detailed illegal payments that rose to as much as $700,000 this year.

It is believed the secret dossier was originally kept at home by former Storm CEO Brian Waldron, who quit his post at the rugby union Melbourne Rebels in disgrace.

It is the first hard evidence of this year's alleged rorting. Details also were surrendered for 2008-09.

The documents are believed to describe how the third-party payments were made; in one case, everything the player was to be paid was through this illegal system, believed to include sponsorship. It is believed the letters give the impression, or state explicitly, that Storm will guarantee the payments.

The dossier is likely to be central to inquiries into how Mr Waldron allegedly masterminded Australia's biggest sporting scandal by breaching the salary cap by $1.7 million over five years. The controversy has brought the club to its knees as sponsors quit.

The Herald Sun believes details of the payments were shuffled between Storm's offices and the homes of Mr Waldron and Mr Hanson.

Storm sources said the rorting centred on the illegal third-party payments and fake invoices. Some players were allegedly paid in $15,000 increments, special game day bonuses being dressed up as third-party hospitality payments.

The Storm board was kept in the dark. Club chairman Rob Moodie warned yesterday it was touch and go for the Melbourne-based rugby league team, but he was hopeful strong backing would keep it afloat.

He said Mr Waldron told him salary cap cheating was widespread. Asked why he had breached the code, Mr Waldron allegedly said: "Because everyone else did it."

Storm's fate was in the balance after super fund Host Plus and Members Equity Bank pulled sponsorships thought to be worth $1 million-plus.

Minor sponsor and clothing manufacturer Skins also withdrew backing.

Of 18 sponsors, only Harvey Norman and Jayco have been categorical in support. Suzuki, Makita and sportswear company KooGa were considering their positions.

A spokesman for Gatorade, which has sponsored Storm for 12 years, said the sports drink company would "not be making any drastic changes".

Lord Mayor Robert Doyle said he expected the City of Melbourne to continue its $35,000 sponsorship.

Sport Minister James Merlino met the NRL and club owner News Limited, publisher of the Herald Sun, to discuss Storm's future.

There was speculation the scandal would spread to other clubs.

A senior player manager said the scandal was just the tip of the iceberg for the NRL: "Waldron said everyone is doing it. Well, he'd be right.

"They call it 'overs', as in 'he's on overs' or over what's been registered. I can't imagine any club in the NRL that's not rorting the system: there would be plenty of the other 15 clubs who would have CEOs and boards now issuing instructions to clean up their act," the manager said.

He said one well-used trick was for a club to assign a particular poker machine to the player and allow all its takings to flow to him.

Another was for a sponsor or third party to be asked to pay an extra amount that might be put in an overseas bank account.

"But if the manager came around with a bag of money a few times a year, who would know?" the manager said.

He said Storm and, previously, the Canterbury Bulldogs, had been caught because of a whistleblower and not because of NRL auditing.

Diamondmaker

Allegedly there was a whistle blower involved and the timing just in time for s competitors launch next season....hmmmmmm

Also the players had to have had some knowledge and players will be investigated apparently also...

toomevara

Diamondmaker wrote: »

Also the players had to have had some knowledge and players will be investigated apparently also...

Indeed, it emerges they were given cars, boats and shopping vouchers...Now I doubt that many of them still believe in Santy Claus, so I'm sure they must have had a pretty clear idea where it was all coming from....

The Aussie

reminds me of Scotty Prince at the Titans and his free/cheap house, how wide spread is this rort???

couerdelion

I think this type of 'rorting' is pretty widespread through the game in both Australia and England.Everyone's heard stories of how Player x's wife is paid as a cleaner at the rugby club without ever actually working there.Id expect more stories to break before the end of the season.

Diamondmaker

Slightly un related but looks like Izzy F may sign for the Melbourne Rebels.