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The rumours were right and Premiership Rugby showed a serious set of cahones to hand Saracens a 35 point deduction for this seasons league and a fine of £5,360,272.31. The new CVC money seems to have given the other clubs confidence to call this out.
Ok, thats the headline so lets look at the details. The fine is significant but lets be realistic for a club like Saracens and a owner like Nigel Wray its hardly anything to be worried about. Saracens annual P&L showed a loss in excess of £4 million on their latest accounts. Wray recently effectively wrote off £48 million of the clubs debt, so i doubt he is losing too much sleep about that one.
The points deduction is something Saracens care about, because 35 points now puts them on negative 26 points and they are likely to need around 35 points to be sure to avoid relegation. That's 61 points in 19 games which is very manageable for them currently. Sure it means that they'll miss out on europe next season but considering the mess they've created thats not the worst thing that could have happened. You just have to look at whats happened to clubs who went into administration and the sanctions imposed for essentially being unable to manage their finances. A 35 point deduction versus being forced back to being an amateur club, i know which one i'd prefer.
There is an angle being spun, mainly by Saracens themselves, that they have done nothing wrong and that this is simply jealousy and revenge. 5 years ago Saracens and a number of other clubs were in breach of the salary cap and Premiership Rugby let it slide, drew a line in the sand, warned the clubs and agreed to honour the cap rules including self declaration of any payments/benefits outside the rules that weren't covered specifically by the salary cap rules. The media spin is that Nigel Wray is the good guy in all this, a rich benefactor trying to assist players prepare for life after rugby by investing in joint ventures. People ask how could that be considered part of the salary cap? A hypothetical scenario would be Wray invests in a company jointly with a current Saracens player. Ownership is split 50/50 between them but Wray funds the start up with £3 million. If Wray provides the capital and the company operates for a few years but then winds up. When its wound up if the money is split in line with ownership then the player has picked up £1.5 for effectively doing nothing and Wray finds what he thought was a smart way around the salary cap. Its nothing new in pro sport, just ask Tom Brady and the Kraft family about the TB12 Sports Therapy Company.
The real fun starts when you look at the ongoing implications. Sure missing out on Europe for a season might sting but with their squad they should easily avoid relegation and be back at the top in the premiership again the following year. Yes, if they can keep their current squad but thats a huge IF.
The biggest challenge is complying with the salary cap for next season. How do Saracens cut the wage bill and retain their key players without losing the dressing room? Whatever they do Saracens are going to have some player turnover. The companies that Wray invested in were generally with his top players....expensive players. Can they hold onto Maro, Mako, Billy, Owen and the others and if they do keep the English stars and cut the extended squad how will they cope during test windows with a fallow squad remaining. Can they make these wage cuts when the top players will still want to be paid and will have significant offers from France.
Saracens really haven't helped themselves since this news broke either. Firstly the timing of the news is a disaster for the premiership and CVC. CVC's investment was all about taking a stake in the premiership and using Saracens as the golden boys of European rugby, and the returning England Rugby World Cup stars as their poster boys to get better TV and rights deals. This financial doping scandal is likely to hinder that significantly. Any legal challenge is going to end up being messy and costing a fortune. There are no winners in that battle. And the final bit of news is that Saracens continue to make this mess worse by not showing up to the Champions Cup launch today. An act of stupidity that is the cherry on the top of this shitty cake. This was purely a domestic issue that had no implications for the European Cup yet now Wray and Saracens have dragged them into it. Nigel would be better off just writing the cheque and biting his tongue before anyone starts asking him to give back trophies.