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Re: Salary cap breaches revealed
Posted by: Wilson Pickett (IP Logged)
Date: 23 January, 2020 12:26

What we need is the absolute truth to come out, if it doesn't there will always be suspicion which helps no-one.

Saracens is a famous old club that needs sensible owners to run it according to the cap rules to try to build the support base into an organically successful club that doesn't need a mega rich man to lose money every year. I am not sure fans of other clubs will be content without change but hey ho.

Time is a healer and a year in the Championship is no bad thing, some of the loyal fans will enjoy the away trips. Plus it gives the chance for more of the younger players to get game time.

What a mess but light at the end of the very long tunnel.



Edited 1 time(s). Last edit at 23/01/2020 15:11 by TonyTaff.

Re: Salary cap breaches revealed
Posted by: Sarriebone (IP Logged)
Date: 23 January, 2020 12:34

Here's the full report if anyone is interested [media-cdn.incrowdsports.com]

Re: Salary cap breaches revealed
Posted by: Gray_Lensman (IP Logged)
Date: 23 January, 2020 12:40

From your own Chairman

Quote:
Prior to my time here, there were discussions with PRL in relation to conducting a mid season audit spanning several seasons ó you will have seen references to that in the press. These discussions continued last week after my appointment.

It would be fair to say that other PRL stakeholders were sceptical about our compliance with such an audit.

We carefully considered the option of a full investigatory audit. However, that inevitably would have involved a long period of more financial and emotional strain and this in turn meant this was not a viable option for us. We therefore agreed with PRL on relegation in the hope that we could draw a line under the mistakes made by Saracens with respect to compliance with the regulations and concentrate on putting our new robust procedures in place.

So, willing to accept the financial and emotional strain of relegation in order to avoid the financial and emotional strain of being audited. Perhaps you can see why more people than PRL stakeholders are sceptical about Saracens' motivations?

Re: Salary cap breaches revealed
Posted by: #wolfpack (IP Logged)
Date: 23 January, 2020 12:49

Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is £800,000 out of £906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, 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. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.



Edited 1 time(s). Last edit at 23/01/2020 12:53 by #wolfpack.

Re: Salary cap breaches revealed
Posted by: stevene (IP Logged)
Date: 23 January, 2020 13:33

Redacted report here:

[media-cdn.incrowdsports.com]

Whoever leaked the unredacted report needs banning from the sport if I am honest. Its done more harm.

For those interested I have summarised some of the key points from the redacted report.

a) as reported Saracens tried to claim the salary cap was illegal under comp law despite being signatories to it. Section A point 8.
b) refused/ werent able (delete based on POV) to provide documents legitmately requested by PRL (section A point 7)
c) Saracens were investigated in 2014. (Section b point 1) to which Saracens refused to co-operate. Defense by Saracens was a breach of competition law and PRL 'settled' with Saracens.
d)Argument (with no distinction between 2014 and 2019) was that that challenge shouldnt be upheld. (point 23/51/109/111).
e)definition of reckless. failing to give significant thought to or recognising and deliberately taking a risk of a breach. So in order words foolish or took a gamble. (112). Hardly supports the argument this wasn't in some way deliberate and 'just a few forms' to paraphrase earlier statements.
f)the panel found that the investments were salary (section 179)
g)they found that interest free loans for renovations were salary (186)
h)MBN. Didnt disclose the agreement and as a connected party (MBN to Saracens) it counts as salary (regardless of whether the player turned up or not) (section 209). Apparently this was an oversight according to Saracens and also argued these were arms length transactions despite evidence to the contrary and providing no evidence of their own (213). The panel gives a myriad of reasons why it constitutes salary and they say they would have concluded the same as the cap manager (219).
i) the salary cap manager provided evidence that a senior player who received image right payments of 800k was underpaid in salary (259).
j)the salary cap manager got 3 valuation for the image right valuation and picked the mid range (254) and the difference between that and salary was found to consitute salary. [note valuations, even by PWC, are subjective as they are forecasts of future value]. The allegation here is that Saracens have picked a valuation which suits the purpose.
h)saracens chose not to bring any evidence to the panel from PWC to additionally support PWC's valuation/ discredit the valuation arrived at by the cap manager (266)
i) the fine and penalty were strict interpretations of the rules (282-296) which would be 5.3m fine and 70 points.
j)discretion is open to the panel due to the severity of the offences commited by Saracens to which the panel ruled they had been found to have breached (297+). Only the panel not PRL have this ability in isolation (eg without agreement of the other party) in respect of the charges brought to the panel.

The panel found (300):

rather than admit the breaches saracens challenged the legality of the breaches
the breaches were reckless (as defined above)
they failed to previously co operate in 2015
they failed to fully co-operate with this investigation

They suggest (in 306) that a higher sanction than what ended up being levied should be considered.

However they reject PRL statement that this was extraordinary in nature and therefore the regulations couldnt possibly take such a level of breaches into account (307)

The panel rejected saracens assertions that these breaches were merely negligent by the very nature of their failure to co-operate (313).

This was halved because the breaches were deemed reckless (2nd worst category) rather than deliberate (319) and therefore points deduction was halved to 35. [note other than a smoking gun of evidence it seems very difficult to be found to have deliberately breached the cap]. It recognised earlier that 70 points would relegate the club.


My view on the report:
Its pretty shocking if I am honest the negligence (whether deliberate or not) by the club. The inertia of PRL in policing this post 2015 is also pretty shocking and more needs to be spent beefing up the SC team. However that doesnt detract from what was done. I think Saracens were pretty lucky first time round to get a 50% discount on the original 70 point deduction. considering the 4 levels of breach all the way through to deliberate concluding they were reckless and applying a 50% reduction feels a bit out of kilter. However thats the decision the panel made.

Recent events:
its clear PRL wanted saracens relegated with their submissions with a full 70 point deduction. Considering 90% of what they charged saracens with was upheld I would suggest they were pretty peeved at the 50% discount on point deductions. I would hazard a guess that (under the rules of the SC) PRL have clearly (with reasonable reason) wanted to do a full detailed review. Saracens refused to co-operate (as they did in 2015 and 2019) and therefore there was a stand off. Clearly Saracens could accept this and PRL could do as the rules allow (and with reason in light of this). Saracens statements after the decision stated they were inside this years cap. PRL have called their bluff from what I can see.

Re: Salary cap breaches revealed
Posted by: freddydoesdallas (IP Logged)
Date: 23 January, 2020 13:36

I've been an outside observer of this for a while and not here to pass judgement on the club or the punishment.

However, after seeing similar things happen in football and then seeing some of the terminology in the releases today ie 'interest free loans' to players now being considered salary...is this going to have tax implications on the players?

Many footballers in recent years have been saddled with huge tax bills after their career had ended due to the EBTs they received. How much of this non-salaried income is now going to be deemed salary and taxable?

Re: Salary cap breaches revealed
Posted by: Marlow Nick (IP Logged)
Date: 23 January, 2020 13:40

Freddy
Be careful not to mix the very broad PRL definition if salary with the tax man's relatively narrow definition of salary. There could of course be other tax questions broader than just income tax

Re: Salary cap breaches revealed
Posted by: stevene (IP Logged)
Date: 23 January, 2020 13:43

Quote:
#wolfpack
Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is £800,000 out of £906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, 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. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.

not sure this is entirely accurate. The key points from that entire section:

The panel report noted evidence submitted that the player was underpaid.

This was used in conjunction with the IR payment to deem this salary.

In respect of the valuation the report notes the SCM used a mid range valuation from a valuation. He didnt simply pick the low valuation to suit his purpose. You are right in saying that valuations aren't a pure science as there is an element of forecasting involved.

The panel also note that Saracens didnt provide any additional evidence to support the PWC valuation despite the opportunity to do so. It would have helped their case if they had got a further independent valuation. Thats the point in terms of not being able to disprove the SCM valuation. In the absence of further evidence from PWC or another professional firm with a further valuation.

In addition (to avoid this in first place) due to the potential variance in different valuations they didnt seek clearance from the SCM as they should have done (to both rule whether it was salary and/or to what degree).

Re: Salary cap breaches revealed
Posted by: freddydoesdallas (IP Logged)
Date: 23 January, 2020 13:55

Quote:
Marlow Nick
Freddy
Be careful not to mix the very broad PRL definition if salary with the tax man's relatively narrow definition of salary. There could of course be other tax questions broader than just income tax

I get that. When pay scandals like this happen in sport, the taxman won't be far behind. The players & club could both potentially have liabilities on it. I really hope the players aren't affected

Re: Salary cap breaches revealed
Posted by: #wolfpack (IP Logged)
Date: 23 January, 2020 14:04

Quote:
stevene
Quote:
#wolfpack
Quote:
#wolfpack
Provided that NW paid the full valuation provided to him by PWC for Itoje's image rights, I cannot see how this could possibly count towards the salary cap. I assume the 103 page document provides some justification.

Relevant section for this bit is paragraph 250 onwards. This is important because the alleged overspend is £800,000 out of £906,505.57 overspend for year 2018/19.

Unless someone tells me otherwise, the SCM got a report from Saffrey Champness who provided a different valuation to PWC. The SCM was then entitled to use his discretion (which included him thinking that PWC had not used correct criteria) and the valuation he obtained to decide the value of Itoje's image rights - and then put the balance into "salary". In order for this to then NOT count as salary (as Saracens were arguing), Saracens have to argue that it was unreasonable for the SCM to rely on his valuation.

Quote paragraph 236: "In our view, Saracens have to say that the only valuation that Mr Rogers could reasonably have decided to be the true market value was the [REDACTED] that the investors agreed to pay. Contract to what Saracens says at para 139 of its closing written submissions, PRL does not have to say (and does not say) that the valuation provided by Mr Patel for Saffery Champness is the only correct valuation. The question is not what the "correct" valuation is, but whether the conclusion reached by Mr Rogers on the valuation issue was reasonable".

Quote paragraph 270: "...we are satisfied that, relying on the Saffery Champness report, 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. We emphasise that we are not saying that we find that the market value of the shares was in fact [REDACTED]. We are saying that it was reasonably open to Mr Rogers to come to that conclusion in all the circumstances"

The panel itself acknowledges that "valuation is not a science" (paragraph 262).

So - unless someone corrects me here - this aspect of breach is essentially down an inability to prove the SCM was 'unreasonable' to rely on a different valuation to the one we relied on. i.e. they're not saying that PWC or NW was wrong at all; they're saying we could not prove the salary cap manager's decision was wrong.

not sure this is entirely accurate. The key points from that entire section:

The panel report noted evidence submitted that the player was underpaid.

This was used in conjunction with the IR payment to deem this salary.

In respect of the valuation the report notes the SCM used a mid range valuation from a valuation. He didnt simply pick the low valuation to suit his purpose. You are right in saying that valuations aren't a pure science as there is an element of forecasting involved.

The panel also note that Saracens didnt provide any additional evidence to support the PWC valuation despite the opportunity to do so. It would have helped their case if they had got a further independent valuation. Thats the point in terms of not being able to disprove the SCM valuation. In the absence of further evidence from PWC or another professional firm with a further valuation.

In addition (to avoid this in first place) due to the potential variance in different valuations they didnt seek clearance from the SCM as they should have done (to both rule whether it was salary and/or to what degree).

I don't think what you have said necessarily contradicts what I have said though.

It does seem totally nuts that Saracens didn't ask PWC to provide an opinion on Saffery Champness's valuation, but that is as much the fault of Saracens' lawyers as Saracens themselves I'd suggest.

The crux of this was never whether or not PWC or SC's valuation was correct - or indeed (and this is important) whether Saracens' interpretation of events or the SCM's interpretation of events is correct.

In fact the panel said "there is force" in Saracens' rejection of the implication that the investors "knowingly and fraudently overpaid for the shares in [REDACTED] and the purpose of the overpayment was to compensate [REDACTED] for the fact he was underpaid salary". The panel deliberately does not "express a concluded view on this issue because it is not necessary to do so". (paragraphs 267-269).

The crux is actually whether "it was reasonably open to Mr Rogers to come to [his] conclusion in all the circumstances" (para 270). Not whether Saracens or anyone connected to them deliberately or reckless or manipulatively flouted the salary cap by £800,000 in 2018/19 by making a payment to Maro Itoje. Or, in fact. whether the SCM is actually correct in his assertion that the £800,000 should be counted as 'salary'! It is just whether he acted reasonably when deciding it was.

The point remains: it looks to me that the difference in PWC's valuation and SC's valuation has resulted in £800,000 being added to 'salary' for last season.

With regardless to seeking support of the SCM, I think that provided NW and friends thought what they were doing was commercially sound they probably felt did not need to. They had, afterall, got a valuation from PRL's own auditors! NaÔve, maybe.



Edited 1 time(s). Last edit at 23/01/2020 14:14 by #wolfpack.

Re: Salary cap breaches revealed
Posted by: Marlow Nick (IP Logged)
Date: 23 January, 2020 14:10

Quote:
freddydoesdallas
Quote:
Marlow Nick
Freddy
Be careful not to mix the very broad PRL definition if salary with the tax man's relatively narrow definition of salary. There could of course be other tax questions broader than just income tax

I get that. When pay scandals like this happen in sport, the taxman won't be far behind. The players & club could both potentially have liabilities on it. I really hope the players aren't affected

Why?
If the players are complicit in any tax dodging (and I don't claim they are) then they deserve the book thrown at them. They are high net worth individuals who need to be contributing to society by paying their fair share of tax. They can afford to pay tax advisors (and I hope they have) so they should be OK but if they haven't or if they ignored advice then they get what they deserve

Re: Salary cap breaches revealed
Posted by: derbyshire fan (IP Logged)
Date: 23 January, 2020 14:17

For what it is worth I donít think there is a lot of stuff for HMRC here; broadly all the loans will get repaid (vs the EBTs referenced above) and the loans are to joint venture companies, not to the individuals directly. And for the image rights investment, the PwC valuation (even if Saffery Champness and Deloitte came up with a different number) will be a good defence.

Re: Salary cap breaches revealed
Posted by: Marlow Nick (IP Logged)
Date: 23 January, 2020 14:22

Quote:
Primavesi2
Quote:
Marlow Nick
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
PWC: a 30% stake would be 1.6m
Maro: OK then I want £1.6m for 30%
Nigel: sounds like a fair market price based on the valuation of one of the biggest consultancy firms in the world, one that is trusted by premier rugby.

RECKLESS is being very generous

Fixed it for you

So Nigel (well known for his expertise in property deals) is now an expert in image rights?
You have to admit that even without the dispute about valuations this is sailing very close to the wind and pushing the spirit of the salary cap to breaking point
One of your highest profile players wants a pay rise. Low and behold Nigel decides to get into the image rights business and suddenly the player has £1.6M in their bank account. Maybe it was worth £1.6M, maybe it was worth £0.8M but either way surely this shouldn't be a transaction with a connected party.

I hope this sort of dodgy deal is explicitly banned in the next version of the cap rules. Nothing to stop Itoje selling his image rights - but not to any individual or company with any links to the club.

Re: Salary cap breaches revealed
Posted by: Gray_Lensman (IP Logged)
Date: 23 January, 2020 14:30

I've only read the competition law challenge so far. I am deeply unimpressed with the case put forward by Saracens especially as the same argument was tried back in 2015. In fact the CEO actually used verbatim evidence provided by the former CEO in his evidence this time. The panel wasn't entirely happy. Strangely both the CEO and someone called Nigel Wray both accepted the need for a salary cap but didn't like the way this one works. Because it makes Saracens uncompetitive on the field. Not an argument the panel found particularly persuasive due to the obvious on field success of Saracens. The panel dismissed the competition claim. No surprise there, but if a club starts from the position that the cap is in some way 'wrong' I think it is easy to see how it's possible to start down a slippery slope.

Re: Salary cap breaches revealed
Posted by: Coughie (IP Logged)
Date: 23 January, 2020 14:32

Look on the bright side - at least Nigel didn't get advice from the PWC lad who helped the Lady from Angola with her affairs.

He, the lad from PWC, is looking for a new direction in life now.....



~ You never knowingly let the facts get in the way of the story. ~

Re: Salary cap breaches revealed
Posted by: #wolfpack (IP Logged)
Date: 23 January, 2020 14:32

Quote:
Marlow Nick
Quote:
Primavesi2
Quote:
Marlow Nick
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
PWC: a 30% stake would be 1.6m
Maro: OK then I want £1.6m for 30%
Nigel: sounds like a fair market price based on the valuation of one of the biggest consultancy firms in the world, one that is trusted by premier rugby.

RECKLESS is being very generous

Fixed it for you

So Nigel (well known for his expertise in property deals) is now an expert in image rights?
You have to admit that even without the dispute about valuations this is sailing very close to the wind and pushing the spirit of the salary cap to breaking point
One of your highest profile players wants a pay rise. Low and behold Nigel decides to get into the image rights business and suddenly the player has £1.6M in their bank account. Maybe it was worth £1.6M, maybe it was worth £0.8M but either way surely this shouldn't be a transaction with a connected party.



I hope this sort of dodgy deal is explicitly banned in the next version of the cap rules. Nothing to stop Itoje selling his image rights - but not to any individual or company with any links to the club.

2 points -
1. Read the discussion between myself and stevene on this. It might help explain what actually happened and what the panel's judgment is based on.
2. Your post could very well start with "so the Salary Cap Manager (well known for his expertise in property deals) is now an expert in image rights?"

The whole point here is not that Saracens deliberately or even recklessly or whatever word you want overvalued the image rights at all. As per my earlier post - the panel specifically says that there "is force" in Saracens' rejections that the image rights were overvalued to account for lower pay, but it doesn't give an opinion because "it is not necessary to do so" (that is a quote - read the report).

The whole point is Saracens had to prove that the Salary Cap Manager had been unreasonable in relying on an alternative report. It did NOT say Saracens had tried to circumvent the salary cap at all. It did NOT say PWC (PRL's own auditors) were wrong. It did NOT say that the investors' price was inflated. It said that the SCM was reasonable in his opinion based on a different valuation.



Edited 1 time(s). Last edit at 23/01/2020 14:35 by #wolfpack.

Re: Salary cap breaches revealed
Posted by: wolfgangvonb77 (IP Logged)
Date: 23 January, 2020 14:40

Audit all the clubs and let's see the true "spirit" of the salary cap. If Saracens undertake then so should every other club in the league. RFU should have the players centrally contracted, why wont they do it let me think because it would cost them a fortune. Why aren't there stories on the financial state of rugby on the whole, scandal sells papers hey Nick ; )

Re: Salary cap breaches revealed
Posted by: maynas (IP Logged)
Date: 23 January, 2020 15:07

Quote:
Marlow Nick
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
Maro: OK but I want £1.6m for 30%
All the dragons: I'm out
Nigel: sounds like a fair market price that doesn't need to be discussed with PRL or double checked in the market place. I'm in

RECKLESS is being very generous
Yes , if thatís how it was but NW says he had a validation from PWC, a not insignificant company, and PRL says it didn't dispute this valuation just took as fact what the salary cap manager came up with from elsewhere and charged the difference to salary. I imagine its not so hard to come up with a higher one now Maro made a World Cup final. Only Rugby player Iíve seen in a commercial ad in TV anyway....

Re: Salary cap breaches revealed
Posted by: maynas (IP Logged)
Date: 23 January, 2020 15:11

Quote:
Ken I L Worth
Just to make it clear.
Saracens accepted relegation, PRL didn't force it upon them
For some unknown reason they didn't want to open their books for 'full scrutinisation' from that everyone makes the obvious conclusion that by choosing relegation (arguably a punishment out of proportion to what has been declared) Saracens have chosen the lesser of the two evils.

We will probably never know what the other evil was, but sadly it almost certainly would have assigned a once great club to a shameful history.

For the sake of the game we all love, hopefully we will never know.

Brendan Ventner said on nRugby Pod they chose this route as audits would take way over the end of the season and mess up so many peopleís lives, not just Sarriies, while relegation just put a line under the issue. I imagine also all that auditing, which would probably spread in scope to other clubs to agree transactions, would be very costly and I bet no one wanted to pick up the tab. Seems a sensible course to take but you cannot please trolls anywhere

Re: Salary cap breaches revealed
Posted by: Marlow Nick (IP Logged)
Date: 23 January, 2020 15:12

Quote:
#wolfpack
Quote:
Marlow Nick
Quote:
Primavesi2
Quote:
Marlow Nick
Maro: I want more salary
Nigel: what about if I bought shares in your image rights company
PWC: a 30% stake would be 1.6m
Maro: OK then I want £1.6m for 30%
Nigel: sounds like a fair market price based on the valuation of one of the biggest consultancy firms in the world, one that is trusted by premier rugby.

RECKLESS is being very generous

Fixed it for you

So Nigel (well known for his expertise in property deals) is now an expert in image rights?
You have to admit that even without the dispute about valuations this is sailing very close to the wind and pushing the spirit of the salary cap to breaking point
One of your highest profile players wants a pay rise. Low and behold Nigel decides to get into the image rights business and suddenly the player has £1.6M in their bank account. Maybe it was worth £1.6M, maybe it was worth £0.8M but either way surely this shouldn't be a transaction with a connected party.



I hope this sort of dodgy deal is explicitly banned in the next version of the cap rules. Nothing to stop Itoje selling his image rights - but not to any individual or company with any links to the club.

2 points -
1. Read the discussion between myself and stevene on this. It might help explain what actually happened and what the panel's judgment is based on.
2. Your post could very well start with "so the Salary Cap Manager (well known for his expertise in property deals) is now an expert in image rights?"

The whole point here is not that Saracens deliberately or even recklessly or whatever word you want overvalued the image rights at all. As per my earlier post - the panel specifically says that there "is force" in Saracens' rejections that the image rights were overvalued to account for lower pay, but it doesn't give an opinion because "it is not necessary to do so" (that is a quote - read the report).

The whole point is Saracens had to prove that the Salary Cap Manager had been unreasonable in relying on an alternative report. It did NOT say Saracens had tried to circumvent the salary cap at all. It did NOT say PWC (PRL's own auditors) were wrong. It did NOT say that the investors' price was inflated. It said that the SCM was reasonable in his opinion based on a different valuation.

Wolfpack. Sorry I wasn't clear (I did read your discussion). The point I was trying to make was irrespective of any dispute about a fair market valuation I personally find it extremely worrying that any club feels it meets the fair play spirit of the salary cap to be making payments to players outside the cap. It may well be just about acceptable under today's rules but I hope this loophole is closed very firmly. In my opinion any payments of any kind need to be included in the cap. No more buying image rights. No more getting a company you own to hire a player as an after dinner speaker. No more. This absolutely isn't banned today and absolutely does not just apply to Saracens but this must stop.

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