The Business Links – How Saracens’ salary cap breach became the biggest story since Bloodgate
BRISTOL, ENGLAND - AUGUST 31: The trophy is seen on the pitch prior to the Gallagher Premiership Rugby match between Bristol Bears and Bath Rugby at Ashton Gate on August 31, 2018 in Bristol, United Kingdom. (Photo by Harry Trump/Getty Images)
THE vitriol directed at Saracens last week by some of their rivals marked a new, and unwanted, chapter in the history of England‘s elite league.
Let’s hope it is a short one. However, the acrimony engendered by immediate calls from high profile figures in the game to see Saracens relegated automatically, and stripped of their titles, following the decision by an independent disciplinary panel, convened by Premiership Rugby, to impose a sanction of a £5.36m fine and 35 point deduction for salary cap breaches, is unlikely to be smoothed over soon.
The totally inadequate 145-word judgement released by Premiership Rugby gave virtually no information about how the panel had come to its conclusions and the reasoning behind the severity of the sanctions.
All it revealed was that Saracens, “failed to disclose payments to players in each of the seasons 2016-17, 2017-18 and 2018-19”. It continued: “In addition, the club is found to have exceeded the ceiling for payments to senior players in each of the three seasons.”
This barebones summary was all there was, despite handing down the heaviest fine and points deduction seen in English Rugby Union under a voluntary salary cap agreement.
For the record, the fine dwarfs the £260,000 given to Harlequins following the Bloodgate scandal by such a margin that it leaves you questioning how much the panel of assembled legal eagles knew about the disciplinary landscape of this sport.
Saracens have said they will appeal a decision they feel has treated them unfairly. The club’s owner, Nigel Wray, confirmed that the appeal – which must be registered with Premiership Rugby by November 18 – will go ahead when he told The Rugby Paper this weekend that he could not make any public statement because it is pending.
A Premiership Rugby spokesman told us that although the appeal had not been lodged yet, “we expect it will be decided by early spring”.
This leaves this season’s Premiership competition with a massive shadow hanging over it, because the reigning English and European champions are in limbo, along with the rest of the league, until the legal convolutions of the appeal are completed.
Wray described the verdict as “absolutely devastating for everyone” at a club which has dominated the domestic and the European club landscape for the last five years, winning four of the last five Premiership titles, as well as three of the last four European Cup crowns.
The Business Links
OWEN FARRELL
England’s captain is a joint shareholder of financial management firm Faz Investments Ltd with Saracens owner Nigel Wray.
The company was set up on September 20, 2017 by chartered accountant Kamal Shah, a former director of Saracens and existing director of Premier Team Promotions, which runs the commercial side of Saracens.
MARO ITOJE
The England lock was the first to strike a business arrangement with Wray, taking over MN Property Solutions Ltd in September 2016.
The company was set up a month earlier by Graham Cowan, who is listed as a former director of Wildman Project Ltd — in which Wray is a major shareholder. Wray came on board as a joint shareholder in MN Property Solutions with Itoje.
BILLY AND MAKO VUNIPOLA
The brothers are joint shareholders of VunProp Limited with Wray. Mako has been at the club since 2011 and his younger brother Billy joined in 2013.
The purpose of VunProp Ltd is listed on Companies House as ‘other letting and operating of own or leased real estate’ but initially the brothers were not involved.
On January 31, 2017, the company was incorporated as ShahDan Ltd by Daniel van den Heever — a business associate of Wray’s — with Wray as the sole shareholder.
Less than a month later, Van den Heever left the company and was replaced by the Vunipolas, who came in as directors and joint shareholders with Wray.
RICHARD WIGGLESWORTH
The scrum-half is a joint shareholder of Wiggy9 Investments Limited with Wray. The company was incorporated as DanCallie Ltd on January 31, 2017 by Daniel van den Heever, with Wray as the sole shareholder.
Two months later it became Wiggy9 Investments, and on April 27, Van den Heever resigned as director and Wigglesworth became sole director, owning 65 per cent with Wray owning 35.
The other storm cloud is the fall-out from a sustained attack on Saracens, with Exeter, Harlequins and Sale, leading the charge.
Exeter’s chairman Tony Rowe set the belligerent tone, saying he had written to the chief executive of Premiership Rugby, Darren Childs, demanding that Saracens reduce the squad for the rest of this season to fit the £7m salary cap.
Rowe, whose Exeter Chiefs side have finished as runners-up to Saracens in three of the last four seasons, said: “They should be given the choice – either reduce the squad immediately before this weekend, or not participate. It’s wrong.”
Rob Baxter, the Exeter director of rugby, said that if the disciplinary verdict was upheld the Premier- ship titles won by Saracens, “have been won unfairly”. He added: “You shouldn’t be paying outside the salary cap. To dress it up in player welfare and developing the game sticks in the craw.”
The tone from Harlequins and Sale had all the hallmarks of wanting to settle old scores. Quins former England captain, Chris Robshaw, and scrum-half Danny Care, who were both dropped from the squad in the 18 months prior to the World Cup, and are now both pursuing careers as high profile pundits, were seething with indignation.
They seemed to have forgotten their club’s involvement in the Bloodgate fiasco as they lashed out.
On the other side of the fence, the Saracens sense of injustice is compounded by the assertion that the joint business ventures believed to be at the heart of the investigation were never hidden. Wray stated: “It has been acknowledged by the panel that we never deliberately sought to mislead anyone or breach the cap.”
It is believed that the large swathe of the judgement not made public accepted that while there had been no deliberate deception by Saracens, that Wray had been “reckless”. If that is the sum of the Saracens’ sins, it is hard to equate it with a £5m fine/ 35 points deduction.
Wray, who has been Saracens chairman for 25 years, claims that his business investments with a number of the club’s highest profile players, including the England captain Owen Farrell, Maro Itoje, and the Vunipola brothers, were declared openly and filed at Companies House and with the Land Registary.
The announcement of the ruling to coincide with the return from the World Cup of an England squad which beat Australia and New Zealand on their way to the final – and featured no fewer than eight Saracens players in the match 23 for the last hurdle defeat by the Springboks – was bizarre.
What they said…
Tony Rowe, Exeter chairman: “They should be automatically relegated. In America, if you are in professional sport, and you are found guilty of breaking the salary cap, you are chucked out. No messing. There is no room in professional sport for cheats.”
Danny Care, Harlequins scrum-half: “There are 11 other clubs in this Premiership who work their balls off from June until May to maybe live that dream and lift that trophy at the end of the season…if it comes out that it was because they were cheating, it’s not just the here and now – it affects people’s lives, it affects people’s families…”
Chris Robshaw, Harlequins flanker: “It is cheating. It is not a good situation for our sport to be in. We like to think our sport is cleaner than everyone else. It is not anymore… as a sport we have to take the damage that comes with that now. It is not going to be easy for our sport to move forward.”
Sale Sharks director of rugby Steve Diamond: “If you commit a robbery in the UK, you get a *ollocking and you may go to prison for six months. If you commit two in the same year and the year after another one…the judge has to say there is a habitual offender. If you don’t give him a substantial penalty he’s going to keep doing it.”
It not only rubbed salt into the open wounds of English rugby, it also made little sense given the timeline of the Premiership Rugby investigation, which, according to them, began 13 months ago after being instigated by Andrew Rogers, their salary cap manager. Rogers, who is head of governance and regulation, holds a Masters degree in international sports law, and worked for the RFU before joining Premiership Rugby in 2010.
The duration of this investigation has been far too long-winded, having started five months before the Daily Mail ran a story at the beginning of March about the Saracens investment partnerships.
Eventually, a charge was brought against Saracens four months after that in June, with Premiership Rugby checks being so laborious that there was always the danger this case would not be concluded by the start of the 2019-20 season.
The only explanation for a lead time of another three months before Sports Resolutions convened the panel of legal bigwigs for the end of September, is that everything to do with legal counsel takes an inordinate amount of time. And, as anyone who has any knowledge of the legal fees knows, time is money.
Should Saracens lose their appeal early in the New Year, you can add around another £1m in court costs to the £5.36m fine. Whether that will be enough to persuade Wray that his time as Saracens owner and chairman, has run its course is hard to predict.
The same applies to Premiership Rugby’s convoluted salary cap disciplinary process. When I asked what they would do with a £5m plus windfall if the verdict is upheld, the response was, “that decision has not been taken yet”.
What we do know about the legal pathway that Premiership Rugby have taken to resolve their salary cap infractions and disputes, is that the game will be poorer for it in every sense.
NICK CAIN
