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Saracens Salarygate: Automatic Relegation?

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    #632
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    There a good synopsis article by Owen slot on today's Times.

    On my phone so can't transcribe, might do it when I get into work.


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    #633
    John_C
    Registered Users Posts: 1,029 ✭✭✭John_C


    Here's something I don't understand from the report published:

    It says that the overspending consisted of the property deals and Maro Itoje's image rights, that the on the books salaries were within the limit. If that's the case, why would Saracens have trouble meeting the cap this season? Can't they just agree a fair price for the players' image rights and stop doing the co-investments?


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    #634
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    John_C wrote: »
    Here's something I don't understand from the report published:

    It says that the overspending consisted of the property deals and Maro Itoje's image rights, that the on the books salaries were within the limit. If that's the case, why would Saracens have trouble meeting the cap this season? Can't they just agree a fair price for the players' image rights and stop doing the co-investments?

    They bought elliot Daly?


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    #635
    stephen_n
    Registered Users Posts: 12,920 ✭✭✭✭stephen_n


    John_C wrote: »
    Here's something I don't understand from the report published:

    It says that the overspending consisted of the property deals and Maro Itoje's image rights, that the on the books salaries were within the limit. If that's the case, why would Saracens have trouble meeting the cap this season? Can't they just agree a fair price for the players' image rights and stop doing the co-investments?

    Ultimately that’s a pay cut for the players involved. Other clubs could probably afford to pay individual players more than Saracens. Especially as Marquee signings which are outside the cap. These payments are used to insure Saracens can keep a squad full of Marquee players.


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    #636
    Squidgy Black
    Registered Users Posts: 21,607 ✭✭✭✭Squidgy Black


    sydthebeat wrote: »
    They bought elliot Daly?

    And Jack Singleton. And bumped Itoje's contract up massively from his first contract which meant he was put into the marquee player spot and someone else's salary goes into the cap.


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    #637
    CIARAN_BOYLE
    Moderators, Sports Moderators Posts: 14,599 Mod ✭✭✭✭CIARAN_BOYLE


    John_C wrote: »
    Here's something I don't understand from the report published:

    It says that the overspending consisted of the property deals and Maro Itoje's image rights, that the on the books salaries were within the limit. If that's the case, why would Saracens have trouble meeting the cap this season? Can't they just agree a fair price for the players' image rights and stop doing the co-investments?

    Maybe they've already done co-investments for this year.


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    #638
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    sydthebeat wrote: »
    There a good synopsis article by Owen slot on today's Times.

    On my phone so can't transcribe, might do it when I get into work.


    here we go:

    The most striking element of the judgment into Saracens’ salary-cap breaches was the tone of the language used. “Flagrant and reckless failure to comply” was one phrase that leapt out of the 103 pages that were finally released yesterday.

    The facts of the breaches themselves? Actually, much of it felt like a tale that we had already been told. It just made a bit more sense. The reporting and the talking over the past ten months, particularly in the Daily Mail in March and then Sky News on Wednesday night, meant that we had seen most of what was coming.

    We just understand properly now why they were docked 35 points and fined £5.3 million.

    Now we have seen the judgment, the question is: has the club been treated harshly? There are many answers to this: first, the Sports Resolutions panel was benevolent. It could have docked Saracens 70 points. Indeed, Premiership Rugby argued that they should have been docked 70 points but the panel elected to let the two 35-point penalties run concurrently in the same season.

    Second, we now know that Saracens broke the salary-cap regulations four seasons in a row and in one other season before that. Including this season, it looks highly likely that they broke them in five of the past six seasons. This looks even more preposterous when you consider, as the judgment does, that their first misdemeanour, which was investigated in 2015, was a kind of “yellow card” offence. Even when it had been flagged up, they still didn’t fall into line.

    Actually, we don’t know for sure when Saracens were ever last under the cap. And remember, they won the Premiership title in four of the past five seasons. That is a shocking distortion of England’s most prestigious rugby competition.

    And third —and this is the point that is rammed home in Lord Dyson’s judgment — the club seemed to operate as though they were above the rules. Even after the yellow card, they lived on the edge and resisted repeated demands to be more forthcoming with information. The judgment records that Saracens had “not fully co-operated” and had “given piecemeal information [that was] often incomplete.”

    You could call this arrogance; some still say it was a deliberate ploy to subvert the rules. Nigel Wray, the former chairman and owner, released another statement yesterday in which he acknowledged that the way that he had operated had been “ill-considered”.

    It remains extraordinary that he did not give all this more consideration, especially after the yellow card, especially with so many people publicly and privately raising questions about the legality of it all. And especially with Andrew Rogers, the Premiership’s salary-cap manager knocking on the door, asking to have a look inside.

    Clubs are actively encouraged to have a day-to-day relationship with Rogers in which they can share questions and ask interpretations on the intricate salary-cap regulations. That is why the present conversation about the legality of loan players is a red herring, because the clubs register with Rogers their loans (it is not possible to loan a player undercover). Saracens could have built such a relationship with Rogers but chose to hide their information rather than share it. That is why Premiership Rugby’s case against Saracens argued that some of their breaches were “concerted and deliberate”.

    The independent judgment settles often for the use of the word “reckless” rather than deliberate. The definition of reckless here, as written in the regulations, is: “Failing to give any significant thought as to the risk or possibility of breaching the regulations” or “having recognised that there is some risk or possibility, nonetheless deliberately taking a risk of breaching the regulations”.

    Clearly Saracens were sailing close to the wind. Again, the question is: why would you when you have already had one such firm warning?

    There remains a raging anger on both sides now, but it has to be stressed that this report is not some kind of a Saracens “stitch-up”. The judgment was made and written by an independent panel appointed by Sports Resolutions with Lord Dyson at its head. Saracens’ rival clubs had absolutely no say in what Dyson et al might conclude.

    The automatic relegation, that was handed down to them last weekend, is another matter altogether. That is a punishment they accepted because they were unable to comply again, and because they refused to meet certain demands, one of which was agreeing to an extraordinary forensic audit.

    Here is the rub. The reality is that we will probably never know exactly the extent of the Saracens’ salary-cap breaches or how they went about them and who were the beneficiaries. They not only refused to submit to this forensic audit; they also insisted on there being no retrospective investigations into previous years.

    So we know some of their transgressions but we have no idea whether we have them all. We think we have now got to the end of all this, but we certainly have never got to the bottom of it all.

    Premiership Rugby was asked yesterday if, from the three seasons that the judgment covers, all the misdemeanours had been exposed or if there might be more still undiscovered. The answer was a shrug of the shoulders. No one knows.

    How shocking were the contents of the judgment released yesterday? Not outrageously so, but that is because we had already become normalised to the situation.

    We knew that the breaches in two of the three seasons were in the region of £1 million. We knew that Wray was doing property co-investments with players; what we didn’t know was that he had rigged them so that the players were almost completely immune from risk and that, if any party was to be out of pocket, it would be him.

    And we didn’t know that Saracens were guilty of a “flagrant and reckless failure to comply”.

    The recent weeks of this salary-cap scandal have been appalling for rugby. It has been desperately poorly handled and has sullied the reputation of the sport in England.

    Hopefully the recent days and the publishing of the judgment yesterday brings this to an end. Hopefully Saracens’ recklessness, which distorted more than six years of domestic competition, is at an end too.

    It has been a huge price for English rugby to pay. It does not seem unreasonable, now, that Saracens are picking up the bill.

    Five stars who are at heart of report

    Mako and Billy Vunipola
    Received £450,000 from Wray. It was paid into investment company VunProp Ltd, which is majority-owned by the brothers.

    Chris Ashton
    Wray and another Saracens director paid 20 per cent towards a house purchased by the former wing, worth £1.4 million.

    Maro Itoje
    The lock was overpaid £871,000 by Wray for a 30 per cent stake in his image rights company, which was valued by an accountancy firm consulted by Premiership Rugby at £800,000 (total), not the £1.6 million estimated by Wray and Saracens. A company he owned received £250,000 from Wray and was paid £95,000 for three hospitality appearances, which there is no evidence that he attended.

    Richard Wigglesworth
    Wray paid £220,000 into Wiggy9 investments.

    •There is no suggestion of wrongdoing on the part of the players, whose names had been removed from the report, but a leaked version obtained by Sky News connected names with specific deals.

    No mention of captain Farrell
    The England captain Owen Farrell has escaped any mention in the disciplinary report into Saracens’ salary-cap breaches despite having set up a financial management company with the club’s owner Nigel Wray.

    Farrell is almost certainly one of the two “marquee players” whose salaries sit outside the cap and, furthermore, the company, Faz Investments Ltd, has remained dormant since it was set up in 2017, a month after the fly half signed a contract extension with the club. It has assets of only £2.


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    #639
    aloooof
    Moderators, Sports Moderators Posts: 10,248 Mod ✭✭✭✭aloooof


    Brian Moore's twitter thread on the report is also very good:

    https://twitter.com/brianmoore666/status/1220474113426382848


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    #640
    awec
    Administrators Posts: 53,438 Admin ✭✭✭✭✭awec


    The Itoje stuff is pretty egregious and IMO he will have a hard time convincing people of his ignorance on that one.


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    #641
    Zzippy
    Moderators, Sports Moderators Posts: 14,166 Mod ✭✭✭✭Zzippy


    awec wrote: »
    The Itoje stuff is pretty egregious and IMO he will have a hard time convincing people of his ignorance on that one.

    I'm sure he's sitting up every night worried about convincing people while counting his ginormous stash of moolah...


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    #642
    Clegg
    Registered Users Posts: 16,759 ✭✭✭✭Clegg


    Zzippy wrote: »
    I'm sure he's sitting up every night worried about convincing people while counting his ginormous stash of moolah...

    It depends entirely on who's asking the questions.

    The taxman may be very interested in this case.


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    #643
    Former Former
    Closed Accounts Posts: 7,728 ✭✭✭Former Former


    Clegg wrote: »
    It depends entirely on who's asking the questions.

    The taxman may be very interested in this case.

    Why though? There's no implication that the money was hidden, just a question of how it was categorised for salary cap purposes.

    As long as Itoje declared the full amount received in his returns, then there shouldn't be a tax issue.


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    #644
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Former Former wrote: »
    Why though? There's no implication that the money was hidden, just a question of how it was categorised for salary cap purposes.

    As long as Itoje declared the full amount received in his returns, then there shouldn't be a tax issue.

    I haven't looked at the report in any detail but there may well be income tax payable on some of those payments where there is no other consideration to offset the transfer of money.

    I'd imagine the people involved were smart enough not to break two sets of 'laws' at the same time but on the other hand there may have been a desire to keep this additional remuneration as quiet as possible.

    I listened to Brendan Venter on the rugby pod and he was pretty much resorting to the Chewbacca defence at one stage. His tone has softened with the latest that has come out but he's determined to protect the reputation of the club and it's achievements and it has really clouded his judgement. Fascinating listen and Hamilton whilst not going to the same lengths to defend Sarries had an interesting perspective also.


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    #645
    fitz
    Hosted Moderators Posts: 7,958 ✭✭✭fitz


    Former Former wrote: »
    Why though? There's no implication that the money was hidden, just a question of how it was categorised for salary cap purposes.

    As long as Itoje declared the full amount received in his returns, then there shouldn't be a tax issue.

    I think it's more likely to result in an audit of the club than the players. If you're a party to this kind of coverage of "creative" financial dealings and think it won't attract the attention of tax authorities, I reckon you'd be falling squarely in the optimistic camp. Can't imagine Wray isn't expecting further tax compliance scrutiny on the back of this.


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    #646
    Former Former
    Closed Accounts Posts: 7,728 ✭✭✭Former Former


    Deleted User wrote: »
    I haven't looked at the report in any detail but there may well be income tax payable on some of those payments where there is no other consideration to offset the transfer of money.

    I'd imagine the people involved were smart enough not to break two sets of 'laws' at the same time but on the other hand there may have been a desire to keep this additional remuneration as quiet as possible.

    See, my take on it is that they didn't try to keep these things quiet.

    If you're hiding transactions, you set up a company in the Cayman Islands whose only shareholder is an Isle of Man trust run by a lawyer in Switzerland.

    In Saracens' case, they set up UK companies that anyone can see, listed the players and Wray as shareholders and even called them "VunProp", "Wiggy9" and "Faz".

    Seems to me like they almost went out of their way to make it obvious what's going on, so I'd be surprised if it wasn't all above-board from a legal and taxation standpoint.


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    #647
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Former Former wrote: »
    See, my take on it is that they didn't try to keep these things quiet.

    If you're hiding transactions, you set up a company in the Cayman Islands whose only shareholder is an Isle of Man trust run by a lawyer in Switzerland.

    In Saracens' case, they set up UK companies that anyone can see, listed the players and Wray as shareholders and even called them "VunProp", "Wiggy9" and "Faz".

    Seems to me like they almost went out of their way to make it obvious what's going on, so I'd be surprised if it wasn't all above-board from a legal and taxation standpoint.

    Fair enough, I don't think there was intentional income tax fraud and I'm not suggesting that. The PRL deciding that these co-investments were income doesn't mean the taxman will.

    The zero net risk to the players however and the absence of any consideration in return for this investment would appear to me to be income tax evasion. Obviously the club and players have been advised that it is not and their advisers know better than me, but I'd be interested to know if the publicity along with the now disclosed intention behind the payments has any sway on that. The club have gone out of their way to argue that this wasn't remuneration, they've accepted all punishment but the relevant stakeholders are still pushing that stance hard whilst refusing to open their books.

    I wouldn't be surprised if there is a part 2 to this saga with potentially more serious consequences.


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    #648
    Trojan
    Registered Users Posts: 16,402 ✭✭✭✭Trojan


    Deleted User wrote: »
    The zero net risk to the players however and the absence of any consideration in return for this investment would appear to me to be income tax evasion.

    More likely tax avoidance than evasion. The former is legal, and every high net worth individual will do it.

    🎙️ The Recognized Authority Podcast



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    #649
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Trojan wrote: »
    More likely tax avoidance than evasion. The former is legal, and every high net worth individual will do it.

    Yes but I'm specifically talking about evasion, in the sense that the money was clearly income and potentially not declared as such.

    I doubt it, it would explain them keeping the books closed though.


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    #650
    Richie_Rich89
    Registered Users Posts: 1,066 ✭✭✭Richie_Rich89


    https://www.youtube.com/watch?v=wpEaFmK3lrY


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    #651
    lawrencesummers
    Registered Users Posts: 8,490 ✭✭✭lawrencesummers


    Salaries play Quinn’s today, the team that did some of the investigative work on them and turned it over to the PRL. I wonder will the sarries players use this as motivation and decide to hammer them out the gate? Sarries don’t have the strongest team out, due to 6 nations camp presumably and quins are not as affected by international call ups. Should be an interesting game.


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    #652
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    Stephen Jones doubling down again in his cheerleading for saracens and nigel wray in today's Times.

    Its an incredibly embarrassing piece for any professional journalist

    He actually said that, as the extra payments were not specifically "to play rugby" then they are not salary boosting at all.

    He has lost any shred of credibility he ever had, and I hope he goes down with that cheating ship.


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    #653
    lawrencesummers
    Registered Users Posts: 8,490 ✭✭✭lawrencesummers


    sydthebeat wrote: »
    Stephen Jones doubling down again in his cheerleading for saracens and nigel wray in today's Times.

    Its an incredibly embarrassing piece for any professional journalist

    He actually said that, as the extra payments were not specifically "to play rugby" then they are not salary boosting at all.

    He has lost any shred of credibility he ever had, and I hope he goes down with that cheating ship.

    Fools like him are best left unread


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    #654
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    lawrencesummers wrote: »
    Fools like him are best left unread

    Theres a definite "rubber necking" element to reading his articles.

    But a more serious point, he writes for The Times. His column inches hold lots of weight in public opinion....and are read a lot.
    It's important guys like this are called out as just being the antagonists that they are, making a living by being the alternative, regardless of the argument.
    In Neil Francis we have our own version.
    I have had people both in my work and socially have arguments with me about rugby, where their view is solely based on Francis' articles and his warped opinions.

    So these fools ARE read, unfortunately.


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    #655
    Guy:Incognito
    Registered Users Posts: 38,247 ✭✭✭✭Guy:Incognito


    2020Vision wrote: »
    That argument is predicated on the assumption that a Saracens team playing within the salary cap wouldn't have won the trophies that it won over the past number of years. Which is conjecture rather than fact!

    Why didn't they save themselves a lot of money and win by staying within the cap then? What sort of bad business gives away free money?


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    #656
    lawrencesummers
    Registered Users Posts: 8,490 ✭✭✭lawrencesummers


    sydthebeat wrote: »
    Theres a definite "rubber necking" element to reading his articles.

    But a more serious point, he writes for The Times. His column inches hold lots of weight in public opinion....and are read a lot.
    It's important guys like this are called out as just being the antagonists that they are, making a living by being the alternative, regardless of the argument.
    In Neil Francis we have our own version.
    I have had people both in my work and socially have arguments with me about rugby, where their view is solely based on Francis' articles and his warped opinions.

    So these fools ARE read, unfortunately.


    It’s impossible to have a argument with somebody whose only reference is the homophobic and decidedly average rugby player that Francis is.

    People like him and jones rely on clicks. Don’t click.


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    #657
    thomond2006
    Registered Users Posts: 45,433 ✭✭✭✭thomond2006


    I despise Jones but he's behind a paywall. He doesn't rely on clicks.


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    #658
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    lawrencesummers wrote: »
    It’s impossible to have a argument with somebody whose only reference is the homophobic and decidedly average rugby player that Francis is.

    People like him and jones rely on clicks. Don’t click.

    The whole point of my post is that Jones writes for a newspaper of merit...and thus his articles hold weight

    He's not a clickbait seeker writing for rugbylad....


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    #659
    lawrencesummers
    Registered Users Posts: 8,490 ✭✭✭lawrencesummers


    thomond2006 wrote: »
    I despise Jones but he's behind a paywall. He doesn't rely on clicks.

    Websites behind a paywall still measure, and it’s not just the website but his total social media footprint as well. People following him on Twitter that know he is a buffoon are only paying his wages to remain one.


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    #660
    lawrencesummers
    Registered Users Posts: 8,490 ✭✭✭lawrencesummers


    sydthebeat wrote: »
    The whole point of my post is that Jones writes for a newspaper of merit...and thus his articles hold weight

    He's not a clickbait seeker writing for rugbylad....

    The Sunday independent isn’t a rag, But they still give that fruitcake form the Iona institute a platform. If people are not able to separate a journalist from the paper he writes in then ore fool them.


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    #661
    sydthebeat
    Subscribers Posts: 41,076 ✭✭✭✭sydthebeat


    lawrencesummers wrote: »
    The Sunday independent isn’t a rag, But they still give that fruitcake form the Iona institute a platform. If people are not able to separate a journalist from the paper he writes in then ore fool them.

    I think you're inadvertently agreeing with my point.

    There are a lot of people who associate a certain gravitas to a media outlet, and thus the writers they have.
    Because of this, the likes of Jones, Francis, etc should be called out whenever it's warranted.

    Otherwise how does the average Joe KNOW that they are just pay packet leeching contrarians.


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