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#Post#: 27904--------------------------------------------------
Saracens salary cap storm transferred to independent panel
DIR By: DOK
Date: September 3, 2019, 5:19 am
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Premiership Rugby escalate case
HTML https://www.dailymail.co.uk/sport/rugbyunion/article-7420353/Saracens-salary-cap-storm-transferred-independent-panel-Premiership-Rugby-escalate-case.html
#Post#: 27905--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: DOK
Date: September 3, 2019, 5:20 am
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Investigations Into Sarries' Salary Cap Heats Up
HTML https://rugby365.com/countries/england/investigations-into-sarries-salary-cap-heats-up
Some interesting stuff on the possible sanctions here
#Post#: 27913--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: DOK
Date: September 3, 2019, 7:17 am
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Owen Slot in The Times
If Saracens escape punishment, it will kill the salary cap
Owen Slot, Chief Rugby Correspondent
Wales dropped from first to fourth in the world rankings at the
weekend. A fortnight after being dismantled by England, Ireland
have hopped up to second. Yet while it has become fashionable
these past few weeks to poke fun at the randomness of the
rankings, one of the best sides in the world doesn’t get a
ranking and is not going to the World Cup. This is Saracens.
Just imagine how far Saracens could go in Japan. They have five
of the England pack; seven of the starting XV. In a week, by
which time all the World Cup squads will have been announced,
they will probably have another six going with other nations.
Will Skelton, the Australian, would be a seventh if he had not
found his Saracens deal preferable. Elliot Daly is the starting
full back for England but may only be third-choice No 15 for
Saracens.
If we agree that they could compete at world level, we could
probably agree that Saracens are phenomenally strong favourites
to win the Gallagher Premiership again this season.
If/when they do they will have won five Premiership titles out
of the past six.
You doubt that when CVC, the private equity firm, bought its 27
per cent share of the Premiership this year, it wanted to buy a
monopoly. You would presume that it wanted a competition full of
intrigue and knife-edge tension. The value of the competition is
hardly going to rise if we already know who will be champions.
On to the salary-cap investigation, then. If Exeter Chiefs,
Wasps et al cannot break Saracens, will it be this that finally
does it?
You will recall that at the end of last season, Saracens were
placed under “review”. Several players’ businesses were revealed
in the media, particularly Faz Investments Ltd, a company run by
Owen Farrell, Wiggy9 Ltd (Richard Wigglesworth’s) and VunProp
Ltd (the Vunipola brothers’) all of which were launched with
Nigel Wray, the Saracens owner, as a financial partner.
This demanded an answer to the question: is this not a smart way
around the salary-cap rules? A payment in kind? Wray quickly
issued a substantial, unyielding statement in which he sought
not to deny these investments — quite the opposite, he said that
they were within the salary-cap rules and that he was proud to
be helping his players to become businessmen and invest in their
futures in this way.
That is where we left the stand-off. Andrew Rogers, the
Premiership salary cap manager, was left investigating it. The
pressure is growing on him now because, five months on, the
other clubs are chomping at the bit. The Premiership does not
start until mid-October, but the Premiership Rugby Cup begins in
three weeks.
Some clubs would love to see Saracens brought to their knees
with a guilty verdict accompanied by a points deduction and
severe reputational damage. Yet while none of them seems to be
in a particularly forgiving mood, even if you attempt to take
the emotion out, what they all need, before the season’s start,
is clarity. Whatever the conclusion, it is hard to see how it
cannot damage Saracens.
There are three most likely outcomes.
One: despite a well-resourced legal battle, Wray fails to show
that his co-investments are not a benefit in kind that break the
cap. Saracens are found to be in breach of the rules. The
maximum penalty is a 35-point deduction.
Of longer lasting significance, then, is: what would happen to
the squad? Saracens would have to re-budget fast to come down
under the cap. There could be a reduction in player wages, a
fire sale of players or Wray would have to sell his shareholding
in his players’ companies. Maybe a bit of all three.
Two: Wray wins the legal argument and Saracens are found to be
not in breach. At that point, suddenly, the salary cap has been
detonated. It currently stands at £7 million. If every other
club is informed that, legally, they can go into business with
their players, like Wray, then the game has been immediately
transformed. The ramifications are vast.
At that point, each club would have to decide whether or not
they wanted to compete at this level. Money would rule. Wage
inflation would rage. The southern-hemisphere nations have few
defences to stop their players from being lured by the lucre of
the north; they would now find it even harder to cope.
Three: Wray wins the legal argument and Saracens are found not
to be in breach, but the reaction of the other clubs is to close
the legal loophole. Wray could fight it and we would get into a
further legal dispute. However, at some point, the votes of the
other 12 clubs would beat the Saracens one. At what stage could
those clubs just refuse to play against them?
The inside information is that, with the new season approaching,
this is all soon to come to a head. Even if Saracens win this
fight, though, it is hard to see how they do not lose.
#Post#: 27916--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: Bucksquin
Date: September 3, 2019, 7:35 am
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Wonderful news. I had assumed that the politics and the legal
action threats of Wray (plus, CVC being scandal-shy) would end
up just killing it.
#Post#: 27918--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: T-Bone
Date: September 3, 2019, 8:15 am
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As has says, if the indepedent panel find that Sarries have only
broken the spirit not the law then the cap is done
#Post#: 27920--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: Donuts
Date: September 3, 2019, 9:07 am
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I think it will be difficult to confirm the value of the benefit
to the players.
As I see it basically a company is formed and it acquires a
property asset with a substantial loan from Nigel Wray.
At that point the company has no value as its assets (the
property) equal the liabilities (the loan still due to Nigel
Wray).
the only time that the player will benefit is if the asset grows
in value which as it is property over time it is likely to or
Nigel Wray decides he doesn't need his money back (which I
suspect is what the plan is) and he agrees to write the loan
off.
But if he doesn't do this until the player has long since
retired then up until then the only increase in value is the
gain in the property value plus any income form rental profits
earned in the period. Normally properties in Investment
companies should revalue their properties every three years but
this isn't always done and in any case a friendly valuer can
easily make this prudent.
then there is the argument that all Nigel Wray is doing is
acting as a mortgage provider (until/or if he writes the loan
off).
If he doesn't then all he is doing is as he claims helping take
a step up the business ladder for their life beyond rugby
would welcome other thoughts on this
#Post#: 27921--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: Grins
Date: September 3, 2019, 9:28 am
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With a property company set up in the way you describe then I
agree no immediate realisable day 1 gain. However why is Wray
giving the shares to a player? He has, in essence given the
player an option on the shareholding of the company - there are
models to value those....
#Post#: 27922--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: AllyMac
Date: September 3, 2019, 9:41 am
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Donuts, your understanding of the set-up is exactly how I am
reading it too, and I agree with your suggestion that the likely
scenario is that Mr Wray is unlikely to request repayment of the
loans once the player leaves the club.
The interesting part, from my point of view, is the timing of
when each company is set-up (usually at the start of a new
season) and when the property is purchased (a couple of months
later). If you look at Maro Itoje, his company start-ups
(Companies House have him listed as a director of a number of
property-related businesses) always seem to coincide with the
start of a new season and in particular when a new contract
starts.
This may, of course, just be a coincidence...
#Post#: 27923--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: DOK
Date: September 3, 2019, 10:20 am
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"Now, Sportsmail understands that an independent body - which
according to PRL's regulations would be Sport Resolutions
HTML https://www.sportresolutions.co.uk
- is handling the case. "
#Post#: 27924--------------------------------------------------
Re: Saracens salary cap storm transferred to independent panel
DIR By: T-Bone
Date: September 3, 2019, 11:06 am
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There is nothing I guess stopping anyone from investing in these
companies if they want to, and thereby providing capital to
purchase properties, which in turns leads to the growth of the
companies. The question is, why would you invest in a property
company set up by a fulltime rugby player. Therefore the
investment by Wray in these companies can't really be justified
as a proper investment which any reasonable savvy third party
investor would make
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