Although only one was able to lift the trophy at the end of the game, 9 of the players who took part in this year's Rugby World Cup Final are current Saracens players (Ben Spencer, Billy and Mako Vinupola, Elliot Daly, George Kruis, Maro Itoje, Jamie George and Owen Farrell for England and Vincent Koch for South Africa). Four others made appearances at the World Cup (Jaun Fiagllo for Argentina, Liam Williams for Wales, Sean Maitland for Scotland and Jack Singleton for England). 

That many international superstars must come at a price, and an independent Disciplinary Panel has now found Saracens in breach of Premiership Rugby's Salary Cap Regulations. 

The Regulations

The Regulations were introduced in 1999 in order to secure the long-term financial stability of clubs within the Premiership competition, and to provide a level playing field for recruitment for clubs so as to promote competition across the league.

The salary cap itself is linked to the annual net distributions paid to the clubs each season by Premiership Rugby. Currently, the combined salaries of all senior players at any club (with the exception of two "marquee players" who sit outside the cap) cannot exceed £7 million. 

However, credit systems for home grown talent, injury dispensations, and England Senior Elite Player Squad or International Player credits all mean that calculating the Cap is not as simple as it might first seem. 

The Decision

In June 2019, Premiership Rugby charged Saracens with breaches of the Regulations, following a nine-month investigation.

After a five day hearing, the Independent Panel (appointed by Sport Resolutions) has now upheld those charges, finding that Saracens had: (i) failed to disclose payments to its players in each of the last three seasons (2016-2019); and (ii) had paid its senior player squad in excess of the salary cap for the same three seasons.

Saracens on the other hand, maintain that they are not in breach, and in particular the Club's investments into companies held by a number of its players do not constitute a "salary" payment under the Regulations. The club has, however, apologised for a number of administrative errors relating to the non-disclosure of some transactions to Premiership Rugby. 

The Sanction

Under the Regulations, where a Disciplinary Panel concludes that a Club has exceeded the cap by £350,000 or more in a salary cap year, the Club must pay a fine of £3 for every £1 they have payed players in over that £350,000 overrun threshold, in addition to Premiership Rugby's reasonable costs of bringing proceedings in relation to the breaches. 

The Regulations also provide a points sanction for the offending club, which increases depending on the severity of the breach. 

In this case, the sanction imposed by the Disciplinary Panel was a total fine of £5.3 million, and a deduction of 35 league points - the maximum allowed under the Regulations, for breaches exceeding £650,000.

The sanction applies only to the current season, and has no bearing on any other English or European competitions.

Appeal

Saracens have already indicated that they will appeal the Disciplinary Panel's decision, though under the Regulations the grounds on which they can do so are limited to an error of law, irrationality or procedural unfairness.

Under the Regulations, the sanctions are suspended pending the outcome of the appeal. 

Comment

If the finding of breach is upheld, this could potentially have a huge impact not just on Saracens, but also on the wider Premiership competition as a whole. For example, the sanction could put Saracens in danger of relegation, especially if its current squad has to be dismantled. Should that happen, current players will also need to find new clubs - whether on loan or as permanent transfers. This may also increase calls for the Premiership to be "ring-fenced" - a move that has been discussed at some length over previous seasons.

Whilst the Disciplinary Panel's decision has not been published in full, it is interesting to note from Premiership Rugby's press release that a number of Saracens submissions to the Disciplinary Panel related to challenges to the Regulations on competition law grounds. According to the press release, the Panel determined that the salary cap operates in a pro (rather than anti) competitive manner, by promoting objective detailed above and ensuring a competitive league, enabling clubs to compete in European competitions. It is perhaps this point of law on which Saracens are basing their appeal, as a statement on Saracens' website states that the club considers that the Panel's interpretation of the Regulations is "detrimental to player welfare across the league, and is damaging the development of elite rugby in the UK".

Whatever the outcome of Saracens' appeal, the Disciplinary Panel has shown clear intent on ensuring integrity within the Premiership by clamping down on those clubs suspected of breaching the Regulations. In that respect alone, the decision is as important for English club rugby as Bloodgate was 10 years ago.