Salary Cap Investigations

[die_mole]

love how exeter and their fans' ideas for punishing a team for breaking the rules is to use punishments that weren't part of the contract that all the clubs signed.

do exeter and wales share drinking water by any chance?

 

[Scotty]

The -35 points isn't to make it a level playing field it's a punishment

No i do understand this but im saying its punishment due to having a squad worth more than it should (and acts to level the field) but given the squad and prem focus and they could manage the top 4.

But that wasnt my point. My point is how is it fair in a play off game to have an unfair advantage in your squad. Yes if they get there they will have earned the chance but if they make 4th then they almost certainly get to the final and quite likly win.

As i said its not lost on me im a Chiefs fan and saying this. And i have no idea the punishments that all the clubs signed i havnt looked into it tbh, please enlighten me i am curious. This was just something i thought of and wondered what people thought on the subject of play offs

 

[LeinsterMan (NotTigsMan)]

As far as i'm aware in terms of Player contracts they are in the cap.
The issue was the side gig, which if that has indeed been cleared up then they are not breaking the cap this season.

 

[Scotty]

As far as i'm aware in terms of Player contracts they are in the cap.
The issue was the side gig, which if that has indeed been cleared up then they are not breaking the cap this season.

So they have paid out a sum ot money on investments as one offs and now the players are on lower salary contracts because of it and free to play as normal next season with the same team as the payment was upfront as long as they are still in contract? Surely that cant be right but if they are within the salary cap now then it must be.

 

[RedruthRFC]

So they have paid out a sum ot money on investments as one offs and now the players are on lower salary contracts because of it and free to play as normal next season with the same team as the payment was upfront as long as they are still in contract? Surely that cant be right but if they are within the salary cap now then it must be.

AFAIK, we don't know if or how the "side investment" thing has been resolved (i.e. the information isn't in the public domain). IMO, the most likely scenario of that the 35 point deduction is the punishment for the coinvestment has drawn a line under that indescretion. Assuming Sarries were sitting within the cap as a result of the extra leeway that the "co-investments" provided, the sticky bit for them comes when they have to renegotiate contracts with players who would have been expecting a "co-investment" (or indeed to attract a new player to the club). If I was a Chairman of another Premiership club, I would be keen to formalise eactly what constitutes a benefit in kind in terms of the relationship between the players and club related shareholder of the business. If those who already have a co-investment in place continue to benefit from the consultancy / contacts of Wray and his mates, Saracens are continuing to circumvent the cap.

 

[die_mole]

I don't get why people think that coinvestments should count into the future. They are a onetime payment into a business owned by the player. Maybe you could consider the free business consulting the players got as extra salary. But again that would only be for the year the consulting happened on.

Are we going to start charging the interest and capital gains from previous years salaries to the salary cap?

 

[RedruthRFC]

I don't get why people think that coinvestments should count into the future. They are a onetime payment into a business owned by the player. Maybe you could consider the free business consulting the players got as extra salary. But again that would only be for the year the consulting happened on.

Are we going to start charging the interest and capital gains from previous years salaries to the salary cap?

If you can prove that they "onetime payments" as opposed to "co-investments", I'd imagine there's plenty of people who would like to hear from you. That said, there has been little or no clarity on how these ventures were structured. I would hope that they were putting equal money in for an equal number of shares, if the players were essentially freerolling with Wray's money, what they've done is much more underhand and I'd be much more upset about it.

I would suggest that you Google the salary cap and read the page on the GP site about it. It explains the point of the salary cap and why this flies in the face of it.

<reductio ad absurdum>I look forward to watching our new Bristolian overlords' World XV, created by Steve Lansdown paying a couple of million for a shareholding in a few businesses.</reductio ad absurdum>

 

[die_mole]

If you can prove that they "onetime payments" as opposed to "co-investments", I'd imagine there's plenty of people who would like to hear from you. That said, there has been little or no clarity on how these ventures were structured. I would hope that they were putting equal money in for an equal number of shares, if the players were essentially freerolling with Wray's money, what they've done is much more underhand and I'd be much more upset about it.

I would suggest that you Google the salary cap and read the page on the GP site about it. It explains the point of the salary cap and why this flies in the face of it.

<reductio ad absurdum>I look forward to watching our new Bristolian overlords' World XV, created by Steve Lansdown paying a couple of million for a shareholding in a few businesses.</reductio ad absurdum>

I have, and those coinvestments are payments in kind that should have been reported as part of the salary cap. I have seen no evidence that more investments have been made to those businesses outside of the time period that saracens have been found guilty of breaching the salary cap.

saracens were assigned a points deduction and levied a fine in accordance to the amount that they overspent the salary cap. If the number they overspent has been obscured orbit accurately reflected in the punishment that's another issue.

"it explains the point of the salary cap and why this flies in the face of it". If you think the salary cap serves any other purpose than keeping cash in owners pockets, I have some boots to send you.*

* can rugby union fans be bootlickers. We're the ones wearing the boots, this makes no sense.

 

[Every Time Ref]

If you think the salary cap serves any other purpose than keeping cash in owners pockets, I have some boots to send you.

If this is true why has Nigel Wray (and others in the past) chosen to overspend it?

 

[Scotty]

Question on the salary cap for those of you who know alot more about it than i do, a 1 time payment as part of the contract then how does that count towards the salary cap. Is the 1 time payment spread over contract as in 100k up front payment would count as 50k each years cap of a 2 year contract? Asking as i dont know.

 

[LeinsterMan (NotTigsMan)]

The contract is a average generally.
To basically stop clubs from front loading contracts.

So Bristol couldn't do something like
Year 1 (Championship) 1 Million
Year 2 (Prem) 100,000

It would still come out as 650,000 a season in Year 2.

 

[Scotty]

The contract is a average generally.
To basically stop clubs from front loading contracts.

So Bristol couldn't do something like
Year 1 (Championship) 1 Million
Year 2 (Prem) 100,000

It would still come out as 650,000 a season in Year 2.

That's what i thought therefore Sarries are technically still over the cap as the investments will be averaged out should they have given this investment for this contract period. So next season they may have to sell players to get back under it due to the investments.

 

[Which Tyler]

The contract is a average generally.
To basically stop clubs from front loading contracts.

So Bristol couldn't do something like
Year 1 (Championship) 1 Million
Year 2 (Prem) 100,000

It would still come out as 650,000 a season in Year 2.

My understanding is that yes it's smoothed - but not in the particular example above as one of the years was in the Championship, where there's no cap.
It's smoothed so that you can't buy (eg, and to stick with your Bristol example)
Radrada, Luatua and Ford all in one year, pay Radrada £2M, £100K, £100K; Luatua £100K, £2M, £100K; and Ford £100K, £100K, £2M with each of them taking their high earning year as Marquee.

Of course, I reserve my right to be wrong that a year outside the Prem can be loaded that way.

That's what i thought therefore Sarries are technically still over the cap as the investments will be averaged out should they have given this investment for this contract period. So next season they may have to sell players to get back under it due to the investments.

They won't be forced to sell (contract law will take priority over competition rules) - but they should need to offload a few out of contract players. There may (probably is) be a loophole if they renew the contracts for all involved, meaning that the smoothing will all be in the past by the time September comes around. Then we just have to see if the involved players are willing to take a pay "cut" and stick with Sarries.
I would expect the involved players to, as they will be very loyal to Sarries, but maybe not some of the higher profile signings that were expecting such backhanders themselves - but that very much depends on what was promise when they signed.

The sensible get-around for this would have been to simply leave all these backhanders until the player retires, with "an understanding" that any player who finishes their career with the club, having spent 5+ years there, will get that sort of investment. Much higher risk of course, and relying on gentleman's honour; but actually allowed within the cap.

 

[die_mole]

If this is true why has Nigel Wray (and others in the past) chosen to overspend it?

Cause he didn't care? I don't know what brilliant point you are trying to make.

That's what i thought therefore Sarries are technically still over the cap as the investments will be averaged out should they have given this investment for this contract period. So next season they may have to sell players to get back under it due to the investments.

How do you know this. Yes, the average salary is charged to the cap for the terms of the contract. But there is no chance in hell you know the actual numbers and whether or not saracens are over the cap now.

 

[Every Time Ref]

Cause he didn't care? I don't know what brilliant point you are trying to make

I'm making the point that if the only function of the salary cap is to save the owners money, then an owner deciding to overspend the salary cap is logically absurd.

More specifically - clearly owners want to spend money and are prevented from doing so (or retrospectively punishes for it). So at the very least some of the owners do not want to save money. Like, if they wanted to, why would they own a premiership rugby club? They are basically black holes for cash.

Plus, there are many other stated benefits which are demonstrably true

So yeah, my point is that your argument is at the very least overly simplistic and ignores many other factors, or more likely it's completely wrong.

 

[Scotty]

How do you know this. Yes, the average salary is charged to the cap for the terms of the contract. But there is no chance in hell you know the actual numbers and whether or not saracens are over the cap now.

I dont know for sure no one does bar sarries and the people involved in it all im just speculating based on if they were over and all investment count averaged over the contracts then they must be especially with the new signings as i doubt daly was cheap.

Obviously as i said it is speculation. Why do you think they arnt over?(if that is your opinion) and if not what are your thoughts?

 

[die_mole]

I'm making the point that if the only function of the salary cap is to save the owners money, then an owner deciding to overspend the salary cap is logically absurd.

More specifically - clearly owners want to spend money and are prevented from doing so (or retrospectively punishes for it). So at the very least some of the owners do not want to save money. Like, if they wanted to, why would they own a premiership rugby club? They are basically black holes for cash.

Plus, there are many other stated benefits which are demonstrably true

So yeah, my point is that your argument is at the very least overly simplistic and ignores many other factors, or more likely it's completely wrong.

your logic is that if one member of a group does something contrary to the mission of a group, then that can't be the mission of the group. If that was true then no one would ever break a treaty and there would never be in-fighting in partnerships of joint ventures.

The point of the salary caps are that the majority of owners want to save owners so they use their majority to force owners who would want to spend as much money as they want to limit their spending. The minority owners aren't really given a choice, they can either own a club in top-flight competition or they can **** off.

For why they would want to own a premiership rugby club? Because it's something they want to do. They want to keep their costs down so they form a cartel with owners to put in an arbitrary salary cap. This allows them to keep money in their pocket. Is this something that all owners want? Clearly not. But a majority do and they can force the hand of owners who do not want it.

As for the other stated benefits being "demonstrably true". Do you believe everything the rich say to justify their actions? If parity was really their aim, why isn't there a salary floor? Why does the salary cap not extend to facility upgrades, coaches, executives, and other staff? As for their stated benefits, may I direct you to actual research?

https://search.proquest.com/docview/2007938557?pq-origsite=summon
Study that compares the competitive balance between the Premiership and Top 14. Both have similar long term competitive balance since 2004/2005. Conclusion is that salary cap has short-term benefits but then teams adjust to how they can use their resources in a legal way.

https://journals.sagepub.com/doi/fu...m_source=summon&utm_medium=discovery-provider
Parity has more to do with the game itself rather than salary cap, and really parity just means randomness. Basketball has a high number of occurrences per game so the law of averages means you are more likely to approach the expected result. American football has a single game playoff compared to other american sports that have 7 game series so it appears to have more parity when in reality it is more random.

http://harvardsportsanalysis.org/2016/12/which-sports-league-has-the-most-parity/
Again, the structure of the sport is more important than a salary cap. NFL and MLB have very similar levels of Parity even though one has a hard salary cap and the other has a soft salary cap that few teams even come close to. MLB, with the soft cap, has a lot less randomness than the NFL due to more games and longer series in the knockout stages yet has similar competitive balance.

https://link.springer.com/article/10.1007/s00181-015-0968-1
Much more economicy, but essentially NFL and MLB have similar levels of competitive balance.

I dont know for sure no one does bar sarries and the people involved in it all im just speculating based on if they were over and all investment count averaged over the contracts then they must be especially with the new signings as i doubt daly was cheap.

Obviously as i said it is speculation. Why do you think they arnt over?(if that is your opinion) and if not what are your thoughts?

Mostly I'm just sick of reckless speculation. I think they are probably under cause they let some players go that were part of the era of overspending. I imagine Bosch was on a stupid amount of money and in general the names they lost were bigger than the names they brought in (Daly being the obvious exception). If they are over the cap, which definitely could be true, then they should get punished again and the EPR should have some type of repeater clause in the punishments.

My issue is with people saying that because they were over the cap last year than they must be this year. That's like saying that because it rained yesterday it is going to rain today. Yes, it is more informed prediction than randomly guessing, but it's still a **** way to predict the weather.

 

[Amiga500]

I don't get why people think that coinvestments should count into the future. They are a onetime payment into a business owned by the player. Maybe you could consider the free business consulting the players got as extra salary. But again that would only be for the year the consulting happened on.

No - it should be averaged over the length of a contract that was in place at the time.

If Dodgy Nigel wants to pay someone 500k in wages in each of 3 years, but makes an additional lump sum payment of 1.5m into said someone's business in the first month of those 3 years, then that is effective 1m a year.

There is absolutely no other way of cutting it. That additional lump sum was negotiated as part of a 3 year contract and should therefore be at least* effective on all 3 years of that contract.


*I'm open to persuasion that it should be the worst of any which way you cut it - be that averaged or counted in entirety for any individual year (including counting several times) to prevent any shenanigans going on in the future.

 

[Amiga500]

The point of the salary caps are that the majority of owners want to save owners so they use their majority to force owners who would want to spend as much money as they want to limit their spending. The minority owners aren't really given a choice, they can either own a club in top-flight competition or they can **** off.

For why they would want to own a premiership rugby club? Because it's something they want to do. They want to keep their costs down so they form a cartel with owners to put in an arbitrary salary cap. This allows them to keep money in their pocket. Is this something that all owners want? Clearly not. But a majority do and they can force the hand of owners who do not want it..

Or they want to make it sustainable such that careers and livelihoods are not subject to an owner deciding that throwing money away year after year on a rugby club is a bad idea and having to close the club.

 

[die_mole]

No - it should be averaged over the length of a contract that was in place at the time.

If Dodgy Nigel wants to pay someone 500k in wages in each of 3 years, but makes an additional lump sum payment of 1.5m into said someone's business in the first month of those 3 years, then that is effective 1m a year.

There is absolutely no other way of cutting it. That additional lump sum was negotiated as part of a 3 year contract and should therefore be at least* effective on all 3 years of that contract.


*I'm open to persuasion that it should be the worst of any which way you cut it - be that averaged or counted in entirety for any individual year (including counting several times) to prevent any shenanigans going on in the future.

we aren't in disagreement. What I'm saying is that payment should be considered a payment in the year it was made, and that total salary is then calculated into the average. Other people are saying that those coinvestments should continue to contribute to the overall cap hit in subsequent years.