REVEALED: The shocking cost of Premiership's 'marquee players'
PREMIERSHIP SALARY CAP REPORT: ‘No one within rugby has come out of this looking good.’ In this one sentence is captured the true essence of the findings of Paul Myners.
Premiership Rugby on Thursday released a 55-page report of a comprehensive review of its salary cap regulations – led by the former government minister, Myners.
The review – ordered as a result of the revelations of Saracens’ salary cap breaches – was commissioned by Darren Childs, CEO, Premiership Rugby, in December 2019.
Myners, in his introduction, quoted a Premiership club supporter: “This whole affair has done huge damage to our sport. We as the rugby community have always prided ourselves on our ethical code of conduct [perhaps even a little ‘holier than thou’]. But this affair has dragged the sport and its reputation into the gutter, with non-rugby fans seeing us all in the same boat.”
And then he encapsulated it with the statement of another Premiership club supporter: “From the whole Saracens affair, the most frustrating part was a lack of transparency. All media outlets seemed to have different information and until the [verdict] came out, no one could be sure of what was the truth or just made up. No one within rugby has come out of this looking good. If one thing can come out of this it must be increased transparency from all parties.”
However, it was when he spoke about exemptions and marquee players that the real bombshell dropped.
(Continue reading below … )
He revealed that seven of the 24 highest-remunerated players in the 2019-2020 season were not ‘marquee’ players.
The 24 players in the top bracket cost their various clubs a total of £14-million in 2019-2020.
“There are some existing areas of the regulations that are obviously not widely supported,” said in his report.
“Quite a few clubs expressed a desire to end the marquee player system on the grounds that it is inflationary, over-complex and unnecessary.”
He added that the existence of “exemptions and allowances” cause both confusion and inflation.
“Particularly, at a time of financial hardship such as all participants now face, it seems wrong to me to continue making exceptions to the principle of the regulations which can drive costs only in one direction -up.”
Myler pointed out that under Regulation 3.3, clubs are entitled to nominate up to two marquee players.
The technical term in the regulations is ‘excluded’ players, but he used the more readily-recognised word ‘marquee’.
Marquee players’ salaries are unlimited and not taken into account under the salary cap.
Despite the noble intentions of the introduction – to enable clubs to recruit and retain some of the very best players from around the world and add commercial value to the PL product – it tainted the Premiership brand.
“The first marquee player was introduced in 2012-13 and a second was allowed from 2015-16,” the report said.
“In 2013-14, there were five players in the Premiership with a total cost to their employing club – including such extra costs as agents’ fees and image rights – of at least £300,000.
“In 2019-20, this number had risen to 99 players.
“It is also worth noting that seven of this season’s 24 highest-remunerated players are not ‘marquee’.
“The 24 players in this cohort cost their various clubs a total of £14-million in 2019-20.
“It is clear to me, and to many others within the clubs, that the marquee-players exemption completely cut across the objectives of equality and competition and create unhelpful inflationary pressure on wages.
“The time is ripe for a review of their continued usefulness.”
Myler said in coming to my conclusions, he studied the current situation carefully.
“On the question of governance, that is not part of my remit and I consider governance only in so far as it affects the regulation of the salary cap.
“My only general observation is that now the CVC investment has been in place for some time, it might be a good idea to review corporate governance against generally established principles of good governance, which would be sound practice and may have a beneficial effect on the quality of decision-making.”
(Below – Myners’ reccomendations …)
1. Separation of Investigation, Decision to Prosecute and Enforcement
1.1 Enshrine a commitment by the clubs to respect the independence of the regulations.
1.2 The current discretion for clubs to choose to remove a director of a club pursuant to Regulation 14.7 should be removed.
1.3 Appoint an independent Cap Governance Monitor, with reserved powers in relation to the enforcement of the regulations.
2.1 Announce the fact that a charge has been brought as soon as is reasonably practical and within seven days, with a brief summary of the substance and details, and proposed dates for a hearing.
2.2 Publish disciplinary decisions in full, with the redaction of confidential information or personal data.
2.3 Include details of all breaches and sanctions in a comprehensive SCM annual report, which is made public.
2.4 Publish guidance from the SCM regularly and make this publicly available.
2.5 Publish general information to share details about the operation of the cap and how it is achieving its objectives.
2.6 Publish any changes to the regulations, along with a rationale for how it is consistent with the five regulatory objectives.
3. Drafting of the Regulations and Definition of Salary
3.1 The regulations should remain as a set of detailed rules, backed up by principles.
3.2 All permitted payments to players should be automatically included within the salary cap, except for a few clearly communicated exceptions.
3.3 All exceptional items to be pre-approved by the SCM, otherwise they will be automatically treated as salary.
3.4 Prohibit payments which are subjective, extend beyond a player’s playing career or come from connected parties (including sponsorship by connected parties). Any prohibited payment should result in a sanction.
3.5 Broaden the current definition of connected party.
3.6 The SCM must approve all sponsorship arrangements in advance.
3.7 Tighten provisions around player loans to ensure they are bona fide.
3.8 Review provisions for exempt (marquee) players.
3.9 Remove the provision to deem a salary. Instead allow evidence of inaccurate salary declaration to be sufficient grounds for the SCM to launch an investigation.
3.10 Strengthen emphasis on clubs seeking clarification from the SCM in relation to any uncertainty in the interpretation of the regulations. Failure by a club to do so should be treated by the disciplinary panel as an aggravating factor leading to an increased sanction.
4. Club Accountability
4.1 The entry level for points sanctions should be increased.
4.2 The disciplinary panel should be entitled to take into account a wider range of factors and be given more guidance in relation to how those factors might influence their decision and their relative weighting.
4.3 Increase sanctions for failure to co-operate to a level equivalent to the sanctions available for breach of the salary cap.
4.4 Make additional sporting sanctions available, including relegation, suspension, stripping of titles and return of prize money.
4.5 Provide the disciplinary panel with the power to install an independent monitor for consistent and serious breaches.
4.6 Increase the sanctions available to the SCM for breach of lower level regulatory breaches, including the ability to deduct 2 points, with a right of appeal for clubs before an independent disciplinary panel.
5. Player Accountability
5.1 Tie players into the regulations so that they have accountability with respect to the salary cap.
5.2 The following player obligations should be adopted:
i) Player declaration
ii) Reporting arrangements for players
iii) Onus on player to clarify arrangements
5.3 Provide sanctions for players who are in breach of their obligations under the Regulations. These sanctions should include fines and sporting sanctions.
6. Accountability of Others
6.1 Introduce a fit and proper test for club owners to be available to the Disciplinary Panel in extreme circumstances.
6.2 Define a category of “club officials” to include directors and shareholders with more than a 10% holding and each club official should register with Premiership Rugby.
6.3 Require club officials to sign a declaration confirming that they have read the Regulations and agree to abide by them.
6.4 Require a board representative to sign a declaration of anticipated and actual compliance with the Regulations.
6.5 Provide that any club official who knew, or should have known, about the breach of the salary cap and who has signed a false declaration or certification or has unreasonably failed to co-operate with salary cap regulations is subject to sanctions including a ban from Premiership Rugby for up to two years (first offence) or up to lifetime (any subsequent offence).
6.6 Require clubs to nominate a salary cap officer who has duties to the SCM.
6.7 Provide obligations for agents in the regulations that mirror those of players in relation to disclosure and obligation to co-operate with the SCM.
6.8 Add a provision to the RFU’s agent declaration that includes an agreement by each agent to comply with the regulations.
6.9 Provide sanctions for breach of the regulations by an agent, including suspension of licence, forfeiture of any commission and/or fines.
7. Powers and Resource of the SCM and the auditors
7.1 Extend system to allow central access to each club’s salary cap spreadsheet at all times.
7.2 Require clubs to provide copies of documents such as new contracts to the SCM within 14 days.
7.3 Clarify the power of the SCM to attend clubs without notice and require them to provide him with finance reports and access to management accounts.
7.4 Allow the SCM to make requests to see players’ tax returns on a random basis.
7.5 Clarify that, as a part of their annual review, the auditors are able to obtain downloads of raw accounting data from each club’s system.
7.6 Enhance the powers available to the auditors in their annual audit to include mandatory interviews, sampling of tax returns and more extensive provision of information and documents by the clubs.
7.7 Introduce sanctions for clubs that do not comply with reasonable requests from auditors within a reasonable time frame.
7.8 The SCM should work with the Rugby Players Association and RFU to provide a programme of education for players and agents so that they understand their obligations under the regulations.
7.9 Change the title of the “SCM” to salary cap director”.
7.10 Appoint a deputy SCM to assist the SCD.
7.11 Appoint a full-time data analyst.
7.12 Make investigatory audits compulsory if the SCM has reasonable grounds to initiate.
7.13 Expand the scope of investigatory audits to include broader powers of search.
7.14 Provide sanctions for any club or individual who is found to have deleted evidence post the notification on an investigatory audit.
7.15 Introduce random mini investigatory audits for two clubs every year.