Finally a proper look at Sarries and the salary cap

[Raggs]

They likely get £600k or so for internationals.

Huh?

One of the reasons Quins were over the cap, allegedly. Too close to the line and the dropping of Brown and then Care caused problems.

Part of the reason that Wasps overran too if I recall correctly.

It's a real bugger when part of your allowance is only known at the end of the season, overrun is basically inevitable. I guess that's why it's not too punitive at that point.

[Stom]

Huh?

One of the reasons Quins were over the cap, allegedly. Too close to the line and the dropping of Brown and then Care caused problems.

Part of the reason that Wasps overran too if I recall correctly.

It's a real bugger when part of your allowance is only known at the end of the season, overrun is basically inevitable. I guess that's why it's not too punitive at that point.

Yeah, there's a difference between an overrun of £42k and £600k...

[Big D]

Slightly OT but if the rumours about Edwards to Wasps are true, they may owe Wigan Warriors compensation (if he has signed a contract). Would that compensation come out of the salary cap.

[Raggs]

Slightly OT but if the rumours about Edwards to Wasps are true, they may owe Wigan Warriors compensation (if he has signed a contract). Would that compensation come out of the salary cap.

Coaches aren't included in the cap. And even for players, club to club payments are not included (to my knowledge).

[Digby]

Slightly OT but if the rumours about Edwards to Wasps are true, they may owe Wigan Warriors compensation (if he has signed a contract). Would that compensation come out of the salary cap.

Coaches aren't included in the cap. And even for players, club to club payments are not included (to my knowledge).

Yep, they definitely changed player transfer fees so they're no longer included. Unless the player gets a % of the transfer sum in which case that portion does count

[Which Tyler]

As far as I'm aware - player transfer fees were never in the cap - they certainly weren't the first time anyone went specifically hunting in there after we'd all assumed they were (Burgess)

[Big D]

Cheers, was curious.

[BenHK]

This has all gone very quiet. Another sweep-it-under-the-rug-and-nobody-will-notice?

[Peej]

Issue hitting the newspapers again today.

Basically Sarries have said, "yes we do co-investments, but they're not part of the cap rules, so while we broke the spirit of the regulations we didn't do anything wrong. So you can't touch us."

Now, I disagree that the co-investments aren't part of the benefit-in-kind element of the cap, but presumably lawyers with sharper analytical minds than me have pronounced it all ok, which is why they've done it.

[Stom]

Issue hitting the newspapers again today.

Basically Sarries have said, "yes we do co-investments, but they're not part of the cap rules, so while we broke the spirit of the regulations we didn't do anything wrong. So you can't touch us."

Now, I disagree that the co-investments aren't part of the benefit-in-kind element of the cap, but presumably lawyers with sharper analytical minds than me have pronounced it all ok, which is why they've done it.

If PRL have let this through, they and their lawyers should be dismissed with immediate effect. That's pretty atrocious.

[Puja]

Issue hitting the newspapers again today.

Basically Sarries have said, "yes we do co-investments, but they're not part of the cap rules, so while we broke the spirit of the regulations we didn't do anything wrong. So you can't touch us."

Now, I disagree that the co-investments aren't part of the benefit-in-kind element of the cap, but presumably lawyers with sharper analytical minds than me have pronounced it all ok, which is why they've done it.

If PRL have let this through, they and their lawyers should be dismissed with immediate effect. That's pretty atrocious.

Can you really police that though? If the player and Nigel Wray set up an investment company 50:50 and both put in the same money and keep the same split, he's technically not paying them anything. Sure they're getting the benefit of his knowledge and contacts to turn a profit, but the extra money's coming from the market, not the club.

Puja

[Bloggs]

I think the biggest shame of this would be if the PRL closed the avenue of players getting help to transition into post-playing career because Sarries took that well meaning bit of salary cap legislation and took the p1ss. If they want to carry on having a cap, this is what they need to do, but it's a shame Sarries can't abide by the meaning of the cap as well as the actual cap itself.

[Peej]

I don't buy the Sarries line that this is about post-playing careers. This is dodging the cap, pure and simple.

[Peej]

Issue hitting the newspapers again today.

Basically Sarries have said, "yes we do co-investments, but they're not part of the cap rules, so while we broke the spirit of the regulations we didn't do anything wrong. So you can't touch us."

Now, I disagree that the co-investments aren't part of the benefit-in-kind element of the cap, but presumably lawyers with sharper analytical minds than me have pronounced it all ok, which is why they've done it.

If PRL have let this through, they and their lawyers should be dismissed with immediate effect. That's pretty atrocious.

Can you really police that though? If the player and Nigel Wray set up an investment company 50:50 and both put in the same money and keep the same split, he's technically not paying them anything. Sure they're getting the benefit of his knowledge and contacts to turn a profit, but the extra money's coming from the market, not the club.

Puja

But on some of these Wray put in 50% of the equity as co-director, the effectively resigned, leaving the player as sole beneficiary.

[Stom]

If PRL have let this through, they and their lawyers should be dismissed with immediate effect. That's pretty atrocious.

Can you really police that though? If the player and Nigel Wray set up an investment company 50:50 and both put in the same money and keep the same split, he's technically not paying them anything. Sure they're getting the benefit of his knowledge and contacts to turn a profit, but the extra money's coming from the market, not the club.

Puja

But on some of these Wray put in 50% of the equity as co-director, the effectively resigned, leaving the player as sole beneficiary.

And that would need to be declared to HMRC, no? Which begs the question: if it's an income the tax authority recognizes as pay, why doesn't the salary cap?

I know there are ways round everything, though, so it just makes more sense to introduce an "against the spirit of the rules" charge and deduct points for breaches. Otherwise it's all a bit pointless. We can all see Sarries have been destroying the cap, no-one can build a squad like that without doing so. Which means, as they've admitted, they're breaching it in spirit. So they should be deducted points.

[Peej]

There are definitely ways around it. I think if they only get a dividend from their role, rather than a salary, that affects it (though I'm far, far from an expert on these things). Think about the trips too - Sarries can easily pass them off as "business expenses" but they're giving their staff an all-expenses paid holiday. Bet the value of that isn't counted in the cap calculations.

[Puja]

If PRL have let this through, they and their lawyers should be dismissed with immediate effect. That's pretty atrocious.

Can you really police that though? If the player and Nigel Wray set up an investment company 50:50 and both put in the same money and keep the same split, he's technically not paying them anything. Sure they're getting the benefit of his knowledge and contacts to turn a profit, but the extra money's coming from the market, not the club.

Puja

But on some of these Wray put in 50% of the equity as co-director, the effectively resigned, leaving the player as sole beneficiary.

But he would still own 50% of the company, even if he wasn't a director, wouldn't he?

Puja

[Peej]

Unless he sold his stake to them at a price agreed between them. I'm sure the original article suggested as much had taken place with at least one of the players named.

[Digby]

And that would need to be declared to HMRC, no? Which begs the question: if it's an income the tax authority recognizes as pay, why doesn't the salary cap?

I assume because salary doesn’t all have to come from the club and these are entirely separate business arrangements would be the claim. Which begs the question of how do we move beyond reality saying these are clearly deals dependent on playing for Sarries designed to circumvent the rules and Sarries saying no they aren't and anyway the hole idea of a cap isn't legally enforceable anyway

[Stom]

And that would need to be declared to HMRC, no? Which begs the question: if it's an income the tax authority recognizes as pay, why doesn't the salary cap?

I assume because salary doesn’t all have to come from the club and these are entirely separate business arrangements would be the claim. Which begs the question of how do we move beyond reality saying these are clearly deals dependent on playing for Sarries designed to circumvent the rules and Sarries saying no they aren't and anyway the hole idea of a cap isn't legally enforceable anyway

Why would it not be?

The league is run by an organisation. Surely that organisation is completely able to create its own rules to govern that division, otherwise there would be no relegation, no sharing of revenues...nothing.

It's bull, this is sport not business. You can't pump millions into an entity that would be instantly shut down as a business venture and then call it a business... It's a sports club. It does not exist to make profit and Sarries cannot claim it comes close to doing so.

But I've always been of the mind that if the teams do not want to play by the rules of the competition, they can fuck off. F1, too: Ferrari should be told they won't get extra money or they can do one, and screw the consequences.

[Digby]

And that would need to be declared to HMRC, no? Which begs the question: if it's an income the tax authority recognizes as pay, why doesn't the salary cap?

I assume because salary doesn’t all have to come from the club and these are entirely separate business arrangements would be the claim. Which begs the question of how do we move beyond reality saying these are clearly deals dependent on playing for Sarries designed to circumvent the rules and Sarries saying no they aren't and anyway the hole idea of a cap isn't legally enforceable anyway

Why would it not be?

The league is run by an organisation. Surely that organisation is completely able to create its own rules to govern that division, otherwise there would be no relegation, no sharing of revenues...nothing.

It's bull, this is sport not business. You can't pump millions into an entity that would be instantly shut down as a business venture and then call it a business... It's a sports club. It does not exist to make profit and Sarries cannot claim it comes close to doing so.

But I've always been of the mind that if the teams do not want to play by the rules of the competition, they can fuck off. F1, too: Ferrari should be told they won't get extra money or they can do one, and screw the consequences.

In no small measure we'd do better with a lawyer answering and ideally one familiar with European laws (obviously subject to change any day now)

Such as I understand it you have to be able to justify salary caps in the face of freedom of movement and antitrust laws and the wise money is under EU law you probably can't. Thus PRL have a quandary do they spend a lot of money on a case they'd be favourites to lose when Sarries are better funded and the likely outcome could well be seen to weaken the cap still further

It's also worth noting as things stand the cap is in part working on Sarries, okay there's a problem around fair competition, but the cap was also to protect the clubs financially and if Sarries are paying the players off the books then the legal vehicle of Sarries is protected. It's only thus partially working but maybe you take that and declare the win. At least until we're free of those pesky EU types and can write laws that will enshrine us as the best and the fairest, unicorns for all!

[jngf]

Reminds me of the “amateur” era when Harlequins used to recruit brickies who could play well and turn them into City stockbrokers

[Banquo]

Reminds me of the “amateur” era when Harlequins used to recruit brickies who could play well and turn them into City stockbrokers

Peter Winterbottom was a farmer, but yes

[Which Tyler]

https://www.thetimes.co.uk/edition/spor ... -dcsbdmg5n
https://www.dailymail.co.uk/sport/rugby ... -case.html

TL;DR: investigation has been referred to the independent body Sport Resolutions. Apparently this can only happen "where the salary cap manager is of the 'reasonable opinion' that there has been a breach of £350,000 or more or the club is deemed to have failed to cooperate." or "where there is an overrun of under £350,000 but the club opts to have the matter dealt with by a panel and where there is a dispute over the regulations themselves."

[Raggs]

I'm guessing dispute over the regulations.