English salary caps to be more transparent?

Running Rugby wrote:

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Running Rugby understands that Premiership Rugby is to strengthen its level of investigation into the operation of the salary cap for Aviva Premiership clubs and introduce more `openness and transparency` into the process.

An announcement expected from PRL in the coming weeks will confirm the introduction of what it calls `open book powers` involving the ability to use emails, phone calls, texts, financial records and tax returns to monitor payments to players and the encouragement of a “whistleblowing” policy in the 2013/14 season.

In previous campaigns the system involved all contracts being made available to the salary cap manager within 28 days, with sign offs by the respective club’s board, chair, chief executive and financial director, an annual audit for 2-3 days, player interviews and written enquiries.

While Premiership Rugby says that the existing protocol worked well, it appears to want it to be seen to be serving its purpose by strengthening its hand and promising to make all decisions and judgements made public.

The cap remains at the 2012/13 level of £4.26m, plus eight portions of £30,000 `Academy credits` (producing a maximum of £4.5m) and the retention of the `excluded player`, whereby one individual lies outside the cap – the so-called `marquee signing`.

There is also a £400,000 injury dispensation allowance which comes on stream after 12 weeks and a maximum of three season-long loan players can also be excluded from the cap. LV=Cup matches will not count towards any of the five appearances allotted for season-long loan players, who (alongside Academy registered players) can be used for injury dispensation.

The stated objectives are to ensure the viability of clubs, inflationary control, deliver a level playing field for clubs and maintain the competitiveness of the league – an aspect which is seen as a great strength of the English top flight.

Clubs are encouraged to strengthen their squad depths, become (or remain) sustainable, retain the best English players, attract the world’s best talent, increase the attractiveness of the brand both commercially and to spectators.

Salary caps are used around the world to place a lid on spending. Premiership Rugby is one of 16 major leagues and governing bodies operating such a system, including all the major sports organisations in the United States and Australia, plus the England & Wales Cricket Board (ECB) operated system for its domestic game.

Premiership Rugby’s sanctions for any breaches in 2013/14 will be a fine based upon the amount a club has exceeded the limit and a points deduction will be operated, with the number of points taken away depending on the severity of the breach.

There will also be enhanced assessment of `third party agreements` which could impact on the salary cap. The level of the base salary cap in future seasons will be linked directly to its annual central revenue distributions to the clubs.

The salary cap was introduced by Premiership Rugby in July 1999 as a result of concerns over the financial sustainability of clubs in the league after Richmond and London Scottish went out of business.

No official comment was provided by Premiership Rugby when approached to confirm the details of this article.

 

http://www.runningrugby.com/accounts-funding-and-financial-services/ap-clubs-agree-to-more-transparency-on-salary-cap-investigations/

I learned more about the cap in this article than I ever knew before.

I particularly like

para 2 wrote:An announcement expected from PRL in the coming weeks will confirm the introduction of what it calls `open book powers` involving the ability to use emails, phone calls, texts, financial records and tax returns to monitor payments to players and the encouragement of a “whistleblowing” policy in the 2013/14 season.

About time for moneybags clubs!

The use of tax returns is a great addition.  I'd have thought the HMRC would be all over benefit in kind kick backs of free accomodation, cars, etc. and that they would also focus/investigate any payments being funnelled abroad which relate to playing activity at the club.

A good move.

I would be great if we could get public transparency on the wage cap.  In the US, you can quite easily get the salaries of all players for any MLB or NFL team through the open disclosures they are required to make.

Good move. Transparency will force the game to be/or remain (don't want to point fingers) fair. Publishing all future punishments and showing clear guidelines for salary cap breaches and the accompanied punishments.

To be honest I think that its a vain aspirational pile of bunkum in reality. No more than a polititian's realspeak.

"... use emails, phone calls, texts, financial records and tax returns" might be more than probably 'difficult'. I might conceivably be illegal. Not to mention naïve.

I'd love to see marquee players' salaries declared as they could affect capping figures (possibly fundamentally) in unscrupulous hands if they are used as a means of burying surplus wage expenses.

Dont hold back Portney tell it like it is

The issue is not just whether clubs stick to the cap, it should be about the sanctions they face for not doing so, otherwise it's all window dressing.

Irish Londoner wrote:The issue is not just whether clubs stick to the cap, it should be about the sanctions they face for not doing so, otherwise it's all window dressing.

Running Rugby wrote:Premiership Rugby’s sanctions for any breaches in 2013/14 will be a fine based upon the amount a club has exceeded the limit and a points deduction will be operated, with the number of points taken away depending on the severity of the breach.

More mealy-mouthed PRLspeak, IL.
I wonder how the blessed Tigers would react with their current litigious mindset. Are they the only club that actually publish annual accounts? Maybe the Chiefs do as well.

Portnoy, IMHO the penalty for breaking the cap should be at least the same as fielding an unregistered player, fining the clubs who can afford to break the cap carries no penalty - maybe a deduction of all points earned during the period the cap was being broken would concentrate minds...

I agree IL.

Proving it is the difficult bit. I privately suspect about half-a-dozen clubs (including the Tigers) of at least manipulating the figures to satisfy the cap requirements.

Agreed Portnoy - I'd say that your number would be about right, and the others are only not doing it through lack of funds......

Surely Tigers have no need to manipulate their figures as all your players just play for the honour of the jersey and the joy of being in one of the most picturesque cities in the country?


Seriously though, I agree, I would imagine that quite a few clubs are bending the rules currently and almost everyone has done it at some point.

When the cap was increased from 2.5 to 4m a few years ago, only 2 clubs voted against it (Bath and Leeds I think). Interestingly this huge increase didn't seem to change the squad sizes of many clubs at all...

I would imagine staying a little ahead of the cap is much like PEDs in atheletics, a lot of people do it, the authorities are always playing catchup and relying on whistleblowing to catch anybody.

Portnoy's Complaint wrote:

Irish Londoner wrote:The issue is not just whether clubs stick to the cap, it should be about the sanctions they face for not doing so, otherwise it's all window dressing.

Running Rugby wrote:Premiership Rugby’s sanctions for any breaches in 2013/14 will be a fine based upon the amount a club has exceeded the limit and a points deduction will be operated, with the number of points taken away depending on the severity of the breach.

More mealy-mouthed PRLspeak, IL.
I wonder how the blessed Tigers would react with their current litigious mindset. Are they the only club that actually publish annual accounts? Maybe the Chiefs do as well.

Yep, full details here: http://www.exeterchiefs2020bond.com/ - Portnoy, I expect a full and thorough analysis!!



This has to be a good thing, whether it actually achieves what the stated objective is is an altogether other matter, but even small steps towards that goal should be applauded imo

http://www.exeterchiefs2020bond.com/ does what it says on the tin - its a bond/debenture application, As.

Although from memory, I think I've glimpsed their published accounts in the past.

They, like the Tigers are a limited company so are obliged to. Not like the rest who are mirky, dank places shrouded by the problems secrecy, holding arrangements and private financial ownership tax-offsetting mechanisms.

Portnoy's Complaint wrote:http://www.exeterchiefs2020bond.com/ does what it says on the tin - its a bond/debenture application, As.

Although from memory, I think I've glimpsed their published accounts in the past.

They, like the Tigers are a limited company so are obliged to. Not like the rest who are mirky, dank places shrouded by the problems secrecy, holding arrangements and private financial ownership tax-offsetting mechanisms.

You need to download the 'invitation document' (from memory) to see the financial details

Do I then have to take the 'subscribe' link then As? I'm too cookie aware for that.

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In reality the Chiefs (like the Tigers) tend to bury their published annual accounts in a an an e-Faraday cage asap after they are announced.

I don't think you do, just follow the invitation until it delivers you to a PDF like doc

They are limited companies you can request abbreviated accounts from companies house for a pound. Same goes for annual returns. These are readily available and clubs have nothing to do with their availability. How much information you'll get out of a set of abbreviated accounts may annoy you however.

formerly known as Sam wrote:They are limited companies you can request abbreviated accounts from companies house for a pound. Same goes for annual returns. These are readily available and clubs have nothing to do with their availability. How much information you'll get out of a set of abbreviated accounts may annoy you however.

How much detailed information you'd glean from a full set of published accounts or an inspection of HMRC tax returns would be a matter of conjecture as to how accurate they were in real monetary transfers. And I don't mean stamps bought out of petty cash here.

Well in my opinion the body which enforces the salary cap should have a team if forensic accountants contracted in who are able to go in and audit any club within 24 hours notice.

Theres always a way around these things. For example a wealthy owner can hire the players wife for a tidy sum and theres no way Premiership rugby could find out.

Seems that everyone's in agreement (pretty much).

Wage capes are like black holes and it's a matter how near you are to the event horizon as to how hard you have to de-mass to avoid being sucked in.

Profitius, I think that old chestnut is included under the salary cap rulings. As is payments from club sponsors to players.

You hear rumours that Mrs Farrell was the best paid waitress in the country when Farrell was at Wigan but I can't imagine the PRL are stupid enough not to keep an eye on that. It's easy to police, you request the contact of the lass involved compare it to similar employees to make sure it is in line and then arrive at the premises when she should be working and ask to speak to her. An auditor would call it sheet to floor verification.

formerly known as Sam wrote:Profitius, I think that old chestnut is included under the salary cap rulings. As is payments from club sponsors to players.

You hear rumours that Mrs Farrell was the best paid waitress in the country when Farrell was at Wigan but I can't imagine the PRL are stupid enough not to keep an eye on that. It's easy to police, you request the contact of the lass involved compare it to similar employees to make sure it is in line and then arrive at the premises when she should be working and ask to speak to her. An auditor would call it sheet to floor verification.

Do the PRL seriously see it in their interest to implement this...?

If so why didnt they from the start....?

Given that about half the PRL can't afford the salary cap I'd say so. And I think they we just wanting to put a cap in place in the beginning. Better to have something than nothing. Even if there's a lot of wiggle room it's still worth it. They can now start tightening the screws to make it better.

HammerofThunor wrote:Given that about half the PRL can't afford the salary cap I'd say so. And I think they we just wanting to put a cap in place in the beginning. Better to have something than nothing. Even if there's a lot of wiggle room it's still worth it. They can now start tightening the screws to make it better.

But it is not as though the PRL are overly supportive of the lower ranked clubs is it??? Surely they would be looking to maintain their relationships with the big boys, the earners rather than making it a level playing field for the "also rans".

The PRL if anything imo is over-supportive of the lower clubs - that's we have caps and playoffs in the first place.

The PRL is made up of representatives from all the clubs plus I think Bristol. There is also a member of the RFU that sits in as well. It's not a case of pandering to the big boys as the big boys only have the same representation as the small clubs.

The salary cap was introduced after Richmond went under and is there as a safety net to encourage sustainable growth. The PRL have always been keen to support the salary cap as it also keeps the league competitive. Really the only clubs who would really want to do away with the salary cap are Bath and Sarries. The likes of Tigers want more cap to play with but as a limited company don't want to do away with the cap as they can't keep up with the multi millionaire owners.