Saracens Salary Cap Breaches What We Have Learned From Premiership Rugby Report

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Saracens Salary Cap Breaches What We Have Learned From Premiership Rugby Report

Premiership Rugby has released the report into Saracens’ breaches of the league’s salary cap that led to their 35-point deduction and £5.36m fine, and paved the way for their subsequent relegation.

Saracens said they were “keen” for the report to be published, with chairman Neil Golding saying it would “provide much-needed context and clarity”.

Premiership Rugby (PRL) chief executive Darren Childs said: “We are pleased to be able to finally publish the full judgement.

“Now that everyone can see the details, the decision will show that Premiership Rugby has taken firm action to enforce the regulations and our management of the salary cap has been endorsed by the panel.”

So what have we learned from the 103-page document, which covered the last three seasons? Here is a summary of what has emerged.

The key information

Although confidential information is redacted in the version published by PRL, the identities of those involved in the deals are in the public domain because of the full report having been leaked.

There are several new pieces of information revealed in the judgement:

  • Saracens’ overspend was more than £1.1m in 2016-17; £98,000 in 2017-18; and £906,000 in 2018-19.
  • PRL initially wanted each breach to be treated separately but the panel decided this would have led to a ‘disproportionate’ sanction of 70 points. It decided 35 points was the right decision, which PRL accepted.
  • Former chairman Nigel Wray made almost £924,000 of contributions to property co-investments with players
  • Part of the breaches surrounded image-rights deals and hospitality payments relating to a player
  • A previously unknown property-sharing arrangement between the club’s former owner and Wray and another player is revealed

More on those £924,000 contributions

The total contribution to property co-investments with players was £923,947.63. The names of the players are redacted, but the figures are £451,188.92, £219,932.36 and £252,826.35.

In this section of the report, the starkly contrasting positions of PRL salary cap manager Andrew Rogers and Wray are detailed.

Rogers says there was a “misconceived” and “concerted and deliberate attempt” to take those contributions outside of the salary structure.

Wray contested this view, saying he entered into “bona fide commercial transactions” – not for “an additional reward” for players.

He said: “While it is important to me to help the club’s players prepare for a life outside rugby and it is certainly the case that where I know and trust an individual, I am more favourably disposed to an idea they pitch to me and to entering into a business relationship with them, my motivations when making investment decisions are ultimately always commercial.”

Having regarded both positions, the panel ruled that “we are satisfied that these capital contributions were salary”, relying on its finding that the loan from Wray was not repayable in the salary cap year.

An £800,000 overspend on image-rights valuations

In the report, it emerges part of the overspend in the 2018-19 salary cap year related to the image rights valuation of a player.

It says Rogers identified £800,000 of salary “on the basis of an alleged overpayment by Mr Wray, Mr Silvester [Saracens director Dominic Silvester] and Mr Leslau [Nicholas Leslau, a director of Saracens until September 2019]” – for “30% of the shares in [redacted]”.

Rogers disputed the purchase price, but Wray and Leslau both defended the valuation they had used.

The panel decided “Mr Rogers was reasonably entitled to conclude that the purchase price for the [redacted] shares was above the true market value to the extent of £800,000”.

Plus £95,000 of hospitality payments

The report also looks at the activity of a hospitality business called MBN Promotions – which has since become Premier Team Promotions Ltd and is owned by Wray’s daughter Lucy and her husband Tony. Lucy Mercey – formerly Lucy Wray – was, until Thursday, a director of Saracens.

MBN paid a player £30,000 in 2016-17, £30,000 in 2017-18 and £35,000 in 2018-19, but details of these payments or the relevant agreement between MBN and the player were not disclosed.

The report also states “no evidence was provided by Saracens to show any events that [player] had in fact attended”.

Saracens accepted this was an “oversight” and apologised for the non-disclosure. However, the club’s position was these payments were “arm’s length commercial transactions” and should not be deemed salary.

The panel rejected Saracens’ challenge that the three payments should not be included in the salary cap.

Co-owned £1.35m property to be lived in by player

This section of the report concerns a sum of £319,600.76 relating to a 20% stake in a £1.35m property lived in by a player.

It states Wray and fellow Saracens director Silvester each provided 10% of the purchase price, equating to £135,000. They also contributed £234,223 for refurbishment work on the property.

In May 2019, Saracens disclosed to PRL a “Declaration of Trust in respect of the property”.

Rogers made the case that there had been “a payment of salary of £319,600” in the 2017-18 salary cap year, because it was a benefit in kind. In outlining this position, he said the sum deferred was a loan, that it was “doubtful” the player would have been able to secure such a loan elsewhere, and he had immediate use of the property.

Saracens disputed this, saying that this was an “entirely arm’s length commercial bargain”.

The panel sided with Rogers.

Saracens’ challenge of salary cap

A considerable portion of the Saracens judgement concerns the club’s challenge “that the salary cap provided for by the regulations is illegal on the grounds that it is contrary to competition law”.

This challenge failed.

How did the panel reach the penalty decision?

In reaching its decision on what the penalty for the breaches should be, the panel heard evidence from salary cap manager Rogers and Saracens.

Rogers said he disagreed with the suggestion Saracens had been “open and transparent” and said the club had been “reckless in its approach to the salary cap”.

In this section, the panel notes Saracens’ breaches were “not deliberate, but in our view they were reckless”, that Saracens had not admitted any of the breaches, that they were charged with a failure to co-operate in 2015 (leading to a settlement and sanctions) and that they had not fully cooperated with Rogers.

It uses the analogy that Saracens were issued with a “yellow card” in 2015, and therefore “the repeated failure to disclose breaches, which it has admitted, make the position all the more stark”.

https://www.bbc.com

Saracens argued that to deduct points for “technical” breaches was “unfair punishment and is contrary to the spirit and underlying purpose of the regulations”.

The panel disagreed with this view.

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Despite viewing the breaches as “very serious”, the panel ultimately decided that imposing a 70-point deduction would be “disproportionate” and that a 35-point deduction would be “sufficient to mark the seriousness of the breaches” over the three seasons covered by the report.

Saracens were subsequently handed automatic relegation for next season as they would not have not been in compliance with the salary cap this season as well. There was no panel decision for this, as it was a Premiership Rugby decision which Saracens agreed to.

Saracens Salary Cap Breaches What We Have Learned From Premiership Rugby Report

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