WRW: 2021 ENDS BUT NOT HOW YOU THINK

Dec 29, 2021

This is not how the year was supposed to end.

We were all recovering from that magnificent day in Bristol, when Alex Lowe's article hit the Times website and it all followed from there. A brief statement from Tigers then followed. Suddenly, events at Ashton Gate seem a lot further back than three days.

Above all, strap yourself in for what could be a very bumpy few months.

BELIEVE NOTHING

There is a tendency when it comes to sport business stories to believe everything that clubs say and disbelieve everything the media says.

While it’s always good to have a healthy scepticism about the media, it helps to apply the same approach to the clubs as well. One standard PR tactic is to complain of inaccuracy without pointing out what is accurate or otherwise. You could say the same about claiming “historic” issues are being investigated, while not saying which contracts are being looked at and in what seasons.

But all that we know is that there is an investigation underway, seemingly more detailed than usual inquiries, but Tigers are not facing a charge as yet. That will be the only matter confirmed in public, so Peter Tom is not going to be led away in irons anytime soon.

Any investigation into salary cap breaches would go back five seasons, so the period in question can only cover activity from the start of the 2016/17 season onwards.

We dont even know when any information found its way to Premiership Rugby and it may not have been recently. Remember, back in March, Hugh Godwin reported that this was a subject of interest across the league, not just at Leicester.

What is interesting is that the Tigers statement mentions the word “historic” twice and at his weekly news conference, Steve Borthwick was very keen to stress that management of the club had been very poor, prior to his arrival.

Given how unrecognisable the squad is from 2016/17 and those public comments, it would be a surprise if players still at the club, were receiving payments through a third party company, be it Worldwide Image Management or any another.

WHAT NEXT?

Equally, even if these issues are historic, the salary cap regulations don’t care. Reputable legal opinion - backed up by sources - suggests that the definition of salary cap at the time, would be the basis of judging if any charge is laid. However, current sanctions would be applied.

If a charge is laid down, the process is passed onto an independent body - Sport Resolutions. The club has 14 days to respond and in turn, PRL has 14 days to respond in kind.

A three person panel will sit on the matter with “at least one legally qualified individual with knowledge of rugby”. It’s noticeable though that there is no timescale within the regulations for a panel to be convened or any decisions be published.

Another salary cap breach - if it is found to have taken place - is the last thing that the sport needs, as we try to get out of the pandemic. And given how everyone came out so damaged from the Saracens salary cap scandal, this is not something that can be easily brushed under the carpet.

WHAT THE WORLD NEEDS LEAST

One of the recommendations from Lord Myners’ review of the whole sordid business surrounding Saracens came right at the end of his report:

If future violations continue to the detriment of the economics and reputation of PRL and the game more broadly, then I have no hesitation in recommending these additional measures:
All hearings of the disciplinary panel to be heard in public, along the same lines as the General Medical Council, employment tribunals or criminal law

In terms of accountability and transparency, the start of this process is not encouraging. The only way we knew anything about the issue was an article in The Times, which led to a brief statement from the club and Premiership rugby.

I will be pleasantly surprised if the public are allowed into any future disciplinary panel.

WHAT THIS MEANS FOR LEICESTER

We don’t know which seasons are being looked at or whether any investigation process will be complete by June, let alone anything else. Given that possible sanctions could affect the top of the league, you’d think they’d like to know soon

In the absence of a charge, it’s impossible to judge yet if this is as serious as Saracens - alhough the Daily Mail claims it isn’t. Talk of relegation is for the birds -for now.

In any case, provided everything is declared to both the salary cap director and the taxman, there is nothing wrong in principle with using third-party companies for the payment of image rights. The challenge comes in accurately defining the value of image rights.

I understand Leicester have been using third-party companies for this purpose over much of the professional era, most of which will be outside the parameters of any investigation. It is one of the reasons why Saracens were so angry at their punishment.

Questions to answer

But what happened at other clubs is irrelevant. Leicester will have to explain their own actions and you can rest assured, this is already the rugby news story of 2022.

The way Leicester has been run off the field, has been opaque for some years. Lines of operational responsibility have been blurred, with the board taking major decisions and in some cases, overruling executives. More broadly, the amount of money invested in the club is not known, as opposed to loans converted into share capital.

Those who leave, including directors and senior executives, sign non-disclosure agreements as a matter of course. At least one head coach sacked by Leicester in recent years was careful to take all his paperwork with him, before he was shown the door.

The aggravating factors to Saracens’ demise was two-fold - a refusal to open up the books and until it was too late, a failure to apologise. Doing the former would be inexcusable, but let’s see if the latter is needed.

Welford Road Weekly

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