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Re: Connected parties & Equivalent entities
Posted by: Marlow Nick (IP Logged)
Date: 13 November, 2019 11:41

Noone is claiming Saracens expanded the squad but rather the extra money upgraded the squad so while I can understand the attraction of saying this amount of money equates to one player (LW or whoever) the accusation is that the extra money allowed Saracens to recruit or retain multiple players (for example an extra £500K might allowed Saracens to pay 5 players £100k wach). Like it or not the way the current rules are written any team can afford any one player at any astronomical salary but everyone has to make difficult decisions to balance the squad. The concern is that Saracens appeared to be the only team not forced into difficult decisions because you could recruit and retain everyone. It's like having a cheat code when playing fantasy league manager... spoils the game for everyone

Re: Connected parties & Equivalent entities
Posted by: Statesman (IP Logged)
Date: 13 November, 2019 12:08

Duncan96, I admire your tenacity and FWIW I agree with you that transparency is required to begin the rebuilding of trust around the SCR's. Clearly on this specific issue it would be inappropriate for the PRL or Sarries to provide detail now as the issue is not yet concluded - also the rules don't allow it. Once the issue is concluded I would like to see the rules changed and full transparency provided.

I found the Rugby Pass article a little confusing. If the RP story is correct I think the corollary is that the breach has nothing to do with the JV's - which is the opinion the Observer published on Sunday in what looked like a very well informed piece. The reason this is axiomatic is that the JV's are fully covered elsewhere in the SCR's (despite NW claiming that they are not!), are defined as a Connected Party (1.1 (a) (v) (A) and 1.1 (b) (iii) (A)) and any loan made to them by another Connected Party is defined as Salary provided it is not repaid within the SC year (schedule 1 - 1 (d)). Section 2.3 (b) (ii) referred to by RP is focussed on the payments in to Trusts (eg Pensions) and the timing of when such payments count as salary.

Re: Connected parties & Equivalent entities
Posted by: Duncan96 (IP Logged)
Date: 13 November, 2019 12:24

I think my point that our breach could amount effectively to Liam Williams is valid. He might have been a marquee player but if we didn't sign him then that amount of salary is potentially available for someone else.

You can put forward arguments that it "could have been used for 5 or 6 other players" but equally we did sign Liam Williams and most of the eyebrows have been raised at that and Eliot Daily.

Please remember my main point is the lack of transparency which all the replies here just illustrate IMHO.

We'd all like to move on and, if we are guilty, then no one can complain of the punishment. Actually it could make for an exciting season as we potentially fight for our existence in a year when we are hit more than anyone by the World Cup.

The question marks over disclosure etc are downright annoying in that context

Re: Connected parties & Equivalent entities
Posted by: JO'G (IP Logged)
Date: 13 November, 2019 12:29

Where PRL seem on rocky ground to me is on the previous seasons where they have claimed to have completed their cap investingations and found no issues. Saracens claim to have provided all that info and confirming this with the cap officer

This seems consistent with Nigel paying a small fine for late data being logged; which you would think referred to last season and not 2 & 3 seasons ago

My suspicions are that the following took place:

2016/2017 - co-investments took place, paperwork in place, salary cap officer signs it all off
2017/2018 - co-investments took place, maybe not all the paperwork in place, salary cap officer still signs it off
2018/2019 - co-investments took place, not all paperwork in place (fine paid) - Mail investigation prompts cap rethink £5mill fine
2019/2020 - co-investments have not taken place ; hence no overspend

I'm thinking that under pressure PRL will only count last season, since it was signed off before, fine reduced as based on under £65k potentially not 35 points but the tier under that (24 points my memory says)

Re: Connected parties & Equivalent entities
Posted by: Duncan96 (IP Logged)
Date: 13 November, 2019 12:49

Quote:
Statesman
Duncan96, I admire your tenacity and FWIW I agree with you that transparency is required to begin the rebuilding of trust around the SCR's. Clearly on this specific issue it would be inappropriate for the PRL or Sarries to provide detail now as the issue is not yet concluded - also the rules don't allow it. Once the issue is concluded I would like to see the rules changed and full transparency provided.
I found the Rugby Pass article a little confusing. If the RP story is correct I think the corollary is that the breach has nothing to do with the JV's - which is the opinion the Observer published on Sunday in what looked like a very well informed piece. The reason this is axiomatic is that the JV's are fully covered elsewhere in the SCR's (despite NW claiming that they are not!), are defined as a Connected Party (1.1 (a) (v) (A) and 1.1 (b) (iii) (A)) and any loan made to them by another Connected Party is defined as Salary provided it is not repaid within the SC year (schedule 1 - 1 (d)). Section 2.3 (b) (ii) referred to by RP is focussed on the payments in to Trusts (eg Pensions) and the timing of when such payments count as salary.

I can't argue with you Statesman because I don't know enough but it looks from what you say that any loan not repaid within the period is caught. An accountant in the Leicester area told me that he set up an Employee Benefit Trust for Leicester Tigers, not to avoid PAYE as Rangers Football Club did (and came a cropper from) but to get round the salary cap. I expect the requirement to repay the loan in the period comes from those arrangements (under the scheme players forwent salary in return for loans from an offshore trust set up by the club). I fully admit that is hearsay and who knows if Tigers actually implemented the EBT once it was set up. Just pasing on a comment given to me by someone I have no reason to mistrust.

The following opinion is completely irrelevant, if those are the rules, as to whether we are guilty or not but the rules seem harsh and in need of refinement as hopefully the following shows:

Wolfpck Lager is a totally legitimate coinvestment company as even Gloucester should be good enough to admit. Set up by 2 Saracens players at or near retirement who work full time in the business. Finance was raised from a number of sources both connected and unconnected with Saracens.

If Nigel Wray made a genuine arms length loan to help the players get on their way by buying stock and equipment, from what you say, that breaches the salary cap. No wonder PRL have apparently given dispensations in the past (although that is one of the contentions mired in secrecy) because this is exactly the type of help clubs should be giving to players rather than throwing them on the scrapheap once they are past it.

I was always proud of the way Saracens supported players in businesses like Wolfpack, Brad Barritt's Ticki Tonga Coffee and George Kruis medicinal Cannabis business. These are real businesses, funded from a number of sources, which we as Saracens supporters see in effect every match day, creating many jobs and a future for players who have short careers. If they are a breach of the salary cap that is just downright wrong but it appears from what you say they potentially are.

Re: Connected parties & Equivalent entities
Posted by: Statesman (IP Logged)
Date: 13 November, 2019 13:56

Quote:
Duncan96
If they are a breach of the salary cap that is just downright wrong but it appears from what you say they potentially are.

To be clear they don't breach the SC, but they are captured by it. Is that wrong? I have the opposite view to you - which is that however altruistic the motives for the establishment of these JV's is they simply shouldn't be allowed in SC environment. The reason is that they lack transparency - the same transparency that you have been so eloquently arguing for. The SCM has allowed them and then tried to police them - and look where it is has left us - utter confusion and mistrust. Best to keep it simple - JV structures not allowed - if the players want to set up Businesses they can but they need to do so without the financial involvement of the club.

Re: Connected parties & Equivalent entities
Posted by: Rupes (IP Logged)
Date: 13 November, 2019 14:00

I may be wrong Duncan96 (and apologies if so) but I suspect that you are too close to the directors (or whoever you keep referring to as "I believe them to be honest") to be objective about this. I just don't get why we as fans should receive full disclosure. We are nothing to do with how the club is run (at a director / corporate level), nor how PRL is run, nor should we be - the sense of entitlement to know every last detail about something that doesn't concern you directly is odd to me.

Edited to add +1 to the Statesman post above - spot on.



Edited 1 time(s). Last edit at 13/11/2019 14:01 by Rupes.

Re: Connected parties & Equivalent entities
Posted by: Poking With Sticks (IP Logged)
Date: 13 November, 2019 14:03

Quote:
Duncan96
I was always proud of the way Saracens supported players in businesses like Wolfpack, Brad Barritt's Ticki Tonga Coffee and George Kruis medicinal Cannabis business. These are real businesses, funded from a number of sources, which we as Saracens supporters see in effect every match day, creating many jobs and a future for players who have short careers. If they are a breach of the salary cap that is just downright wrong but it appears from what you say they potentially are.

I think this would be a good line of defence if we weren't talking about some of the highest paid members of the squad. You can talk about short careers, but if I was a rugby player earning £250K a year, I'd live on - let's say - £100K a year and bank the rest for life after rugby. If we're talking about average squad players, nowhere near internationals, say £60K a year for 10 years, they're the ones who need something to fall back on.

Re: Connected parties & Equivalent entities
Posted by: TonyTaff (IP Logged)
Date: 13 November, 2019 14:09

Quote:
TOKS
Makes you wonder just how far they'll go back, doesn't it.
Whenever young Lawrence pontificated during commentary on Saturday, one thought seemed to pervade my fairly insignificant brain.

Now how did they fit that under a cap of below £2 million those days

They won't go back beyond the start date of the current regulations.



£721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2018.

Re: Connected parties & Equivalent entities
Posted by: TonyTaff (IP Logged)
Date: 13 November, 2019 14:18

Quote:
tpr's headmistress
Duncan - there's an echo on your posts.(Sm124)

Echo removal wizard has awoken.



£721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2018.

Re: Connected parties & Equivalent entities
Posted by: TonyTaff (IP Logged)
Date: 13 November, 2019 14:36

As for the threat of a court appearance frightening PRL into a deal, I would add that they think (or, at least, 'thought') that the agreement signed by all clubs denied any club that option. With wealthy beasts like Lansdown, Craig and Wray around, they would be powerless to enforce a levelish playing field otherwise.



£721.05 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2018.



Edited 1 time(s). Last edit at 13/11/2019 23:57 by TonyTaff.

Re: Connected parties & Equivalent entities
Posted by: colinmiddx (IP Logged)
Date: 13 November, 2019 22:32

Quote:
Poking With Sticks
...if I was a rugby player earning £250K a year, I'd live on - let's say - £100K a year and bank the rest for life after rugby. If we're talking about average squad players, nowhere near internationals, say £60K a year for 10 years, they're the ones who need something to fall back on.

This is where the lack of details are a problem. Is this only the high paid players because they are putting in say £300k of their own into the company and getting loans for the rest which the junior players can't do.

Re: Connected parties & Equivalent entities
Posted by: GazzaFez (IP Logged)
Date: 14 November, 2019 04:24

Quote:
colinmiddx
Quote:
Poking With Sticks
...if I was a rugby player earning £250K a year, I'd live on - let's say - £100K a year and bank the rest for life after rugby. If we're talking about average squad players, nowhere near internationals, say £60K a year for 10 years, they're the ones who need something to fall back on.

This is where the lack of details are a problem. Is this only the high paid players because they are putting in say £300k of their own into the company and getting loans for the rest which the junior players can't do.

People do keep banging on about why only some players if the schemes are for player welfare - PWS being one of the most frequent.

The whole point is that to enter into a co-investment you have to have tax-paid money left over out of your salary and in most cases England appearance money to INVEST! These schemes are not a gift from NW!

The players involved are high earners and obviously have mover left over to INVEST.

Younger and or more junior players don't; they are still paying their mortgage and cars off just like Joe Bloggs.

In addition we have no idea at all who was offered a co-investment and turned it down. Not everyone would take the risk which it undoubtedly is.

Many other senior players probably prefer to do their own thing.

I can think of many senior and no doubt highly paid players who's name do not appear on the very short list of co-investments. There's no mystery to this at all.

Re: Connected parties & Equivalent entities
Posted by: Statesman (IP Logged)
Date: 14 November, 2019 09:41

Quote:
GazzaFez
Quote:
colinmiddx
Quote:
Poking With Sticks
...if I was a rugby player earning £250K a year, I'd live on - let's say - £100K a year and bank the rest for life after rugby. If we're talking about average squad players, nowhere near internationals, say £60K a year for 10 years, they're the ones who need something to fall back on.

This is where the lack of details are a problem. Is this only the high paid players because they are putting in say £300k of their own into the company and getting loans for the rest which the junior players can't do.

People do keep banging on about why only some players if the schemes are for player welfare - PWS being one of the most frequent.

The whole point is that to enter into a co-investment you have to have tax-paid money left over out of your salary and in most cases England appearance money to INVEST! These schemes are not a gift from NW!

The players involved are high earners and obviously have mover left over to INVEST.

Younger and or more junior players don't; they are still paying their mortgage and cars off just like Joe Bloggs.

In addition we have no idea at all who was offered a co-investment and turned it down. Not everyone would take the risk which it undoubtedly is.

Many other senior players probably prefer to do their own thing.

I can think of many senior and no doubt highly paid players who's name do not appear on the very short list of co-investments. There's no mystery to this at all.

Question: How much of their cash did the Vís invest in VProp?
Answer: ZERO.
The company was entirely financed by debt partly supplied by Wray.

Re: Connected parties & Equivalent entities
Posted by: Roger G (IP Logged)
Date: 14 November, 2019 10:08

Quote:
Statesman
Question: How much of their cash did the Vís invest in VProp?
Answer: ZERO.
The company was entirely financed by debt partly supplied by Wray.

Is it clear on whom the liability for the non-NW debt lies? If the Vunipolae alone then surely there's no problem?

Also is it clear who benefits from the rentals gathered from the property portfolio? If it's shared by all investors then again, surely no problem?

Re: Connected parties & Equivalent entities
Posted by: Marlow Nick (IP Logged)
Date: 14 November, 2019 10:23

GazzaFez,
The reason we keep challenging the coinvestments for senior players is the pattern of behaviour

If the priority is player welfare then the priority should be lower paid players

If the priority is recruiting & retaining top quality internationals and finding clever ways to bypass the cap then that's where the money goes

The observed evidence is that
A) Saracens have 29 internationals which is quite frankly unbelievable within the cap
cool smiley lots of side deals seem to be done with the most valuable players

Claiming player welfare does not explain A or B

By all means claim the deals are outside the cap. By all means point to all the good work Saracens do for their lower paid players. but claiming coinvestment is an essential part of welfare for millionaire players is not credible

Re: Connected parties & Equivalent entities
Posted by: Statesman (IP Logged)
Date: 14 November, 2019 10:38

Quote:
Roger G
Quote:
Statesman
Question: How much of their cash did the Vís invest in VProp?
Answer: ZERO.
The company was entirely financed by debt partly supplied by Wray.

Is it clear on whom the liability for the non-NW debt lies? If the Vunipolae alone then surely there's no problem?

Also is it clear who benefits from the rentals gathered from the property portfolio? If it's shared by all investors then again, surely no problem?

The liability for all of the debt sits with the company VProp. Any debt supplied by Wray is captured by the Cap.

The benefit from the rentals goes to the Company VProp. Any profit made by VProp is captured by the Cap.

Re: Connected parties & Equivalent entities
Posted by: Roger G (IP Logged)
Date: 14 November, 2019 11:22

Quote:
Statesman
Quote:
Roger G
Quote:
Statesman
Question: How much of their cash did the Vís invest in VProp?
Answer: ZERO.
The company was entirely financed by debt partly supplied by Wray.

Is it clear on whom the liability for the non-NW debt lies? If the Vunipolae alone then surely there's no problem?

Also is it clear who benefits from the rentals gathered from the property portfolio? If it's shared by all investors then again, surely no problem?

The liability for all of the debt sits with the company VProp. Any debt supplied by Wray is captured by the Cap.

The benefit from the rentals goes to the Company VProp. Any profit made by VProp is captured by the Cap.

I hoped I was asking a reasonable question. If all of the benefit went to the Vunipolas with no risk to them then I'd say it was a very dodgy deal. The outcome for them personally is crucial as VProp is a listed company, not a player employed by Sarries. If VProp make a profit, but the Vuniploas never take a bean out of it (e.g if all the profit went to paying back NWs investment) then the Cap doesn't come into it. These details are important.

Re: Connected parties & Equivalent entities
Posted by: Poking With Sticks (IP Logged)
Date: 14 November, 2019 11:37

VProp's "company" is a single £1.5m property in London. In what way does that constitute a risky investment?!

Re: Connected parties & Equivalent entities
Posted by: Statesman (IP Logged)
Date: 14 November, 2019 11:47

Quote:
Roger G
Quote:
Statesman
Quote:
Roger G
Quote:
Statesman
Question: How much of their cash did the Vís invest in VProp?
Answer: ZERO.
The company was entirely financed by debt partly supplied by Wray.

Is it clear on whom the liability for the non-NW debt lies? If the Vunipolae alone then surely there's no problem?

Also is it clear who benefits from the rentals gathered from the property portfolio? If it's shared by all investors then again, surely no problem?

The liability for all of the debt sits with the company VProp. Any debt supplied by Wray is captured by the Cap.

The benefit from the rentals goes to the Company VProp. Any profit made by VProp is captured by the Cap.

I hoped I was asking a reasonable question. If all of the benefit went to the Vunipolas with no risk to them then I'd say it was a very dodgy deal. The outcome for them personally is crucial as VProp is a listed company, not a player employed by Sarries. If VProp make a profit, but the Vuniploas never take a bean out of it (e.g if all the profit went to paying back NWs investment) then the Cap doesn't come into it. These details are important.

VProp is not a listed company - it is a private company. Any company in which a player owns more than 10% of the equity is defined as a Connected Party of the player by the SCR's. Any company in which Saracens (read Wray) owns more than 10% of the equity is a Connected Party of Saracens. So VProp is a Connected Party of both Saracens and the V's and in effect VProp is exactly what you say it isn't - it is deemed by the SCR's a player and what goes on inside it is captured by the Cap. So if Wray makes a loan to this company it will be included in the Cap calculations in the year in which the loan was made (to the extent that it has not been repaid within that year). You're right the details are important!

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