Revealed: How Saracens broke salary cap rules

Martha Kelner

Sky News

The Disciplinary Panel, led by Lord Dyson, accepted that Saracens’ breaches of the regulations were ‘not deliberate’ and advised against their relegation.

Last Updated: 22/01/20 10:58pm

The full details of the salary cap breaches which resulted in Saracens being relegated from the Premiership have been laid bare in a 103-page report obtained by Sky News.

Saracens, the club which has won rugby union’s Premiership in four of the last five seasons, had already been docked 35 points and fined £5.3m last November for breaking Premiership Rugby’s £7m salary cap.

But the news this week that they are to be relegated to the Championship at the end of this season has sent English rugby spinning on its axis, with the future of some of their biggest stars including England captain Owen Farrell shrouded in uncertainty.

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Saracens director of rugby Mark McCall says the international players within the squad have made their intentions clear following the club’s relegation from the Premiership.
Saracens director of rugby Mark McCall says the international players within the squad have made their intentions clear following the club’s relegation from the Premiership.

Now, Sky News have revealed the exact details of the breaches which led to an unprecedented punishment in British sport, with the most significant breaking of the rules concerning joint-property ventures involving England stars Maro Itoje, Billy and Mako Vunipola and former England player Chris Ashton.

There is no suggestion that any of these players knew anything about any salary cap breaches taking place.

The Disciplinary Panel, led by Lord Dyson, accepted that Saracens’ breaches of the regulations were “not deliberate” and had advised against their relegation, believing it would be a disproportionate punishment.

But they did find that Saracens had broken the rules on several occasions with the charges ranging in value from £511.92 to £800,000.

Nigel Wray stepped down as Saracens chairman earlier this month
Nigel Wray stepped down as Saracens chairman earlier this month

Saracens were found to have breached the salary cap in three consecutive seasons.

In 2016/17, Saracens overspent by more than £1.1m, in 2017/18 it was just over £98,000 and in 2018/19 it was £906,000.

Saracens owner Nigel Wray, who resigned as club chairman earlier this month was found to have made payments totalling £1.3m by entering into joint-property ventures with players.

Mako Vunipola (right) and his brother Billy Vunipola benefitted from payments which breached the salary cap
Mako Vunipola (right) and his brother Billy Vunipola benefitted from payments which breached the salary cap

The brothers Billy and Mako Vunipola, who were both part of the England squad at the World Cup in Japan last year, received £450,000 between them. Richard Wrigglesworth, 36, has played for Saracens since 2010, and was given £220,000, while Maro Itoje was given £250,000.

In the case of the Vunipolas, a house was bought by a company known as Vuniprop, funded 66 per cent by Vunipolas and 33 per cent by an interest-free loan by Wray. Renovation costs were also loaned, interest-free, by Wray.

It is understood that Saracens’ defence was that Wray considered these payments to be equity investments and if they were declared as such – rather than as director loans, on the advice of an accountant – they would have been approved by the salary cap manager.

In his witness statement, Mr Wray said these payments were “bona fide commercial transactions with a number of players based on the merit of those investments, not, as PRL suggests, in order to provide an additional reward to players for playing their rugby at the club.”

The report notes a salary cap breach with regards to an overspend of £871,000 by Wray and two other directors buying shares in Maro Itoje's image rights company
The report notes a salary cap breach with regards to an overspend of £871,000 by Wray and two other directors buying shares in Maro Itoje’s image rights company

Another charge was that England and Saracens lock Maro Itoje, one of the biggest stars in the game, was paid a lump sum for three years of £30,000, £30,000, £35,000 by a Saracens-connected hospitality company based at Saracens, which did all the hospitality at their Allianz Park ground and was run by the chairman’s daughter, Lucy Wray.

The report noted that there was no evidence Itoje had attended any hospitality events and was not paid on a per-event basis so this is a salary benefit and not a commercial arrangement. Saracens would say, however, that this was a commercial arrangement by an independent company similar to ones they have with lots of current and former players.

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Owen Farrell says his Saracens and England team-mates have been given enough clarity to ensure they are fully focused on the Six Nations.
Owen Farrell says his Saracens and England team-mates have been given enough clarity to ensure they are fully focused on the Six Nations.

The report also notes a salary cap breach with regards to what they said was an overspend of £871,000 by Wray and two other directors buying shares in Maro Itoje’s image rights company.

They paid £1.6m for a 30 per cent stake in Maro Itoje’s image rights company, based on a valuation by PwC. But Premiership rugby said the shares were only worth £800,000 based on a valuation by a different accountancy firm.

Premiership Rugby said Saracens overpaid Itoje’s image rights because he was being underpaid in normal salary so the club could come in under the salary cap.

 Chris Ashton, now at Sale Sharks, left Saracens in 2017
Chris Ashton, now at Sale Sharks, left Saracens in 2017

Saracens were also found to have breached the salary cap by £319,600.76 with regard to a property bought by a former player Chris Ashton.

The report, compiled by Sport Resolutions, a specialist independent dispute service, noted that Ashton paid 80 per cent towards a house worth £1.4m, while Wray and another director paid 20 per cent towards the property.

The suggestion was that this was a benefit and equivalent to salary in kind. But Saracens defence is understood to have been that Ashton left Saracens shortly after this property was bought meaning it could not have been a benefit for playing Saracens.

It is understood that Saracens explored the option of appealing the initial ruling in November, which led to a £5.3m fine and deduction of 35 points.

Richard Wigglesworth benefitted from payments which breached the salary cap
Richard Wigglesworth benefitted from payments which breached the salary cap

It is thought the club did not resist an investigative audit at the end of this season but they did resist a three-year retrospective audit on the grounds that it would be unfair – in the club’s view – if the same scrutiny wasn’t applied to every Premiership club.

The panel advised against the relegation of Saracens and noted in their decision: “We accept that the breaches were not deliberate, but in our view they were reckless. We consider that to impose a deduction of 70 points in one Salary Cap Year is disproportionate and is not required to satisfy the underlying purpose of the relegations.”

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Exeter Chiefs director of rugby Rob Baxter says the club will consider signing Saracens players if they become available following their relegation from the Premiership.
Exeter Chiefs director of rugby Rob Baxter says the club will consider signing Saracens players if they become available following their relegation from the Premiership.

Saracens had called for the report to be made public after Premiership Rugby initially said that the club had requested it be kept under wraps. “Premiership Rugby welcomes Saracens’ decision to withdraw its previous objection to publication of Lord Dyson’s decision,” a spokesperson said, “These objections were stated in the strongest terms and in writing on behalf of the club by its lawyers.

“We believe that publication of the decision in respect of Saracens’ past breaches of the salary cap is an important step towards upholding trust in our enforcement of the regulations and the disciplinary process.”

Source : Sky Sports