Saracens are relegated!

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MCC1964
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Re: Saracens are relegated!

Post by MCC1964 » Thu Jan 23, 2020 1:59 pm

One thing that has come out of this for me is an opinion that I’ve always held - these days it’s probably nigh on impossible for a Premiership team (within the salary cap) to win Europe. I know Exeter are knocking on the door again this year, but from what I have seen I just don’t think they’re going to be strong enough, nor Northampton. I’d be delighted to be proved wrong - I really like Exeter - but I just can’t see it.

daktari
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Re: Saracens are relegated!

Post by daktari » Thu Jan 23, 2020 2:05 pm

jgriffin wrote:
Thu Jan 23, 2020 1:10 pm
Reading the report it is astonishing how comprehensive Sarries challenge was, despite Wray and the CEO admitting a cap was necessary. They were attempting to drive a coach, horses and the cavalry through the cap!
Hard to see how it was not deliberate given their defence. "We believe in the cap but think its illegal so we are just going to ignore it" - Hey, you could just of stuck to it if you believe in it, you know, the moral thing to do....
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Tiglon
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Re: Saracens are relegated!

Post by Tiglon » Thu Jan 23, 2020 2:12 pm

I found the report fascinating.

Saracens initial challenge that the rules are illegal was ridiculous and easily dismissed. But if you read on it does get a lot less straightforward - that isn't their only argument.

For the first season it comes down to not bothering to check with the Salary Cap Manager whether particular loans or deals would be counted as salary. One "business deal" left the player a few thousand out of pocket, but was treated as a £35k salary because the losses were in a different salary cap year. I can appreciate their arguments that they should not count, but why be so reckless as to do it without checking? It does sound, however, that the 2016/17 season breach was not so much intentional cheating as making a mistake.

The second season was a very small amount similar to other clubs over the last few seasons and would not be noteworthy were it not for the other breaches.

However, last season is a different matter. It would be really interesting to know the amount that the "underpaid" player in question (Itoje?) was actually paid as salary, but it does sound like an intentional evasion of the cap and rightly punished by the maximum possible sanction.

The thing I don't understand though, is how they are still over the cap this season? If it was only that large, apparently one off, purchase of one player's image rights that put them over - so what is the problem this year? Did they get cocky and just take their normal salaries way above the limit? I.e. Daly?

To be honest, I have sympathy with them for the first 2 years, I do not believe they were intentionally cheating and the players concerned (in the long run) did not get anywhere near the level of benefit that was counted as salary. But, they have brought this on themselves and clearly come to think that they can do what they like and will not be punished.

As for the players, it is only the one from last season (Itoje) who I would say must have known that something dodgy was going on. Emotion aside, imagine you're a player who is given a loan of £320,000, and a year or so later you pay back £333,000 - would you assume that that should count as £320,000 salary? I wouldn't.

daktari
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Re: Saracens are relegated!

Post by daktari » Thu Jan 23, 2020 2:23 pm

Tiglon wrote:
Thu Jan 23, 2020 2:12 pm

The thing I don't understand though, is how they are still over the cap this season? If it was only that large, apparently one off, purchase of one player's image rights that put them over - so what is the problem this year? Did they get cocky and just take their normal salaries way above the limit? I.e. Daly?

To be honest, I have sympathy with them for the first 2 years, I do not believe they were intentionally cheating and the players concerned (in the long run) did not get anywhere near the level of benefit that was counted as salary. But, they have brought this on themselves and clearly come to think that they can do what they like and will not be punished.

As for the players, it is only the one from last season (Itoje) who I would say must have known that something dodgy was going on. Emotion aside, imagine you're a player who is given a loan of £320,000, and a year or so later you pay back £333,000 - would you assume that that should count as £320,000 salary? I wouldn't.
I think the issue is that Saracens have no idea what their finances are for this season other than they are over. They are clearly concerned what will come out if they open the books up - it can be the only reason to accept relegation.
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Bunchy
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Re: Saracens are relegated!

Post by Bunchy » Thu Jan 23, 2020 2:37 pm

the key bit for me has been mentioned in several posts

This is what was found in the review rather than what was admitted. if it was only about these known (well known now) transgressions then they should have been comfortable opening the books this season - instead they took relegation. Which only goes to suggest there is much more to hide and cleaning their act up will take time and best to do it out of the glare for a season......

This is very damaging for them and I think the new leadership realised you have to clean out the closet fully before you can move forward......
Less is more....

Mark62
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Re: Saracens are relegated!

Post by Mark62 » Thu Jan 23, 2020 3:09 pm

Nigel Wray has now issued his own statement, it’s on my phone and too long to copy, but basically he’s saying that nothing was done wrong intentionally, that they originally thought the investments were within the cap, but have since realised that they weren’t.

Obvious attempt to shoulder the responsibility and deflect blame away from club and players

Tiglon
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Re: Saracens are relegated!

Post by Tiglon » Thu Jan 23, 2020 3:46 pm

https://www.saracens.com/club-statement ... igel-wray/

There's the link.

Three things annoy me from that statement:

1) He doesn't mention that the £30k payments from MBN had no written contract, and that the first of the payments was made at almost the exact time that the player in question negotiated a new contract with Saracens. He also doesn't mention that MBN has is offices in Saracens' stadium and is also contracted by the club to undertake commercial work.

2) This is the big one. He fails to mention that it was judged that the salary paid to the player who's image rights were purchased last season was remarkably low for a player of his experience and achievements. This, in my opinion, is the one bit that indicates intentional cheating and is conveniently left out of Wray's statement.

3) No mention whatsoever about being over/under the salary cap this season. Either be completely open and honest, or say nothing at all.

If you really want to "explain these one-off transactions", feel that the fans are "owed a full explanation" and are genuinely "really sorry" you would be open about all the relevant parts of the saga, not just the bits that you can explain away. That isn't a full explanation, not by a long shot. The only reason he's issued this statement is so that Sarries fans won't bother to read the full report and won't question their club's actions.

A facade of honesty and openness to hide the worst of what he's done.

WirralExile
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Re: Saracens are relegated!

Post by WirralExile » Thu Jan 23, 2020 4:02 pm

And there is still no apology or contrition. This payment structure allowed them to build up a squad of top players, with virtually a doubling up of positions to cover injury, rest and international call ups. I believe Brian Moore described this on a number of linked Twitter posts.
While those clubs who stick within the cap are impacted by injuries and call ups, they could simply replace a first choice player with another first choice player.
Someone suggested to Brian M on Twitter that Worcester had similar squad numbers, however they wouldn’t all be a first choice player.
I’m still surprised that they are being allowed to retain the trophies and titles won while in breach of the cap.
If they had lost the trophies and titles they may not have needed to have been relegated. The rest of the league will always view those trophies and titles gained through cheating and therefore tainted
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johnthegriff
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Re: Saracens are relegated!

Post by johnthegriff » Thu Jan 23, 2020 8:16 pm

I am a little surprised that so far there seems to be no move by HMRC to examine the accounts and "benefit in kind " to establish that the full amount of tax was paid.

CJ
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Re: Saracens are relegated!

Post by CJ » Thu Jan 23, 2020 10:52 pm

Johnthegriff - I so, so agree. But maybe that will come. I live in hope. Of course, if you or I underpaid by tuppence ha’penny, HMRC would be down on us like a ton of bricks.

Also, I remember us referring to them as the Sorries some time ago. Nothing could be further from the truth. They have no shame whatsoever.

Tiglon
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Re: Saracens are relegated!

Post by Tiglon » Fri Jan 24, 2020 9:12 am

The HMRC rules as to what counts as salary or benefit are different from those used in the salary cap, and much of Sarries transgression was counted as salary cap due to where loans and repayments fell in relation to a salary cap year, but there was little or no benefit to the player at all.

Last year was a different matter and I wouldn't be surprised if HMRC are taking a closer look at the image rights purchase and allegedly low salary payments.

Leicestertinytiger
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Re: Saracens are relegated!

Post by Leicestertinytiger » Fri Jan 24, 2020 9:37 am

Image right payments are normally paid to a players personal limited companies which are subject to corp tax and self-assessment on the divvies. Or they’ll declare the income on self assessment form.

Plus the loans would have nothing to do with HMRC as their definition of a salary differs to PRL. Therefore I doubt they’d be that interested in either.

Tiglon
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Re: Saracens are relegated!

Post by Tiglon » Fri Jan 24, 2020 9:50 am

Leicestertinytiger wrote:
Fri Jan 24, 2020 9:37 am
Image right payments are normally paid to a players personal limited companies which are subject to corp tax and self-assessment on the divvies. Or they’ll declare the income on self assessment form.

Plus the loans would have nothing to do with HMRC as their definition of a salary differs to PRL. Therefore I doubt they’d be that interested in either.
The issue with image rights is when the salary is unusually low, and the image rights unusually high. HMRC can view this as evading tax - there is precedent.

E.g. if Maro Itoje was paid £200k last season and had 30% of his image rights bought for £2.4m by the man who owns his employer, it is pretty obvious that at least part of that image rights payment was disguised salary and should have been taxed as such.

Flash
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Re: Saracens are relegated!

Post by Flash » Fri Jan 24, 2020 9:59 am

According to the daily mail Itoje is not even in the top 10 earners in the 2nd row.

Leicestertinytiger
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Re: Saracens are relegated!

Post by Leicestertinytiger » Fri Jan 24, 2020 10:04 am

Tiglon wrote:
Fri Jan 24, 2020 9:50 am
Leicestertinytiger wrote:
Fri Jan 24, 2020 9:37 am
Image right payments are normally paid to a players personal limited companies which are subject to corp tax and self-assessment on the divvies. Or they’ll declare the income on self assessment form.

Plus the loans would have nothing to do with HMRC as their definition of a salary differs to PRL. Therefore I doubt they’d be that interested in either.
The issue with image rights is when the salary is unusually low, and the image rights unusually high. HMRC can view this as evading tax - there is precedent.

E.g. if Maro Itoje was paid £200k last season and had 30% of his image rights bought for £2.4m by the man who owns his employer, it is pretty obvious that at least part of that image rights payment was disguised salary and should have been taxed as such.
Agreed, but there was massive discrepancy in the valuation of his image rights by two different auditors. PwC are a reputable firm so trying to prove their valuation was incorrect would be very difficult. Also given that they were paying 3k an hour for legal advice, good luck fighting that in court. :smt002

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