EXPLAINER: How the Saracens salary cap scandal unfolded, and what happens now?

by Iain Payten

Saracens, the powerhouse champions of English rugby and arguably the most dominant club in world rugby of the last decade, will be relegated from the English premiership over years of salary cap breaches.

Rivals have long held the belief Saracens have had way too many stars on their books to be salary cap compliant, and investigations have determined they're currently as much as £2 million pounds ($A3.79 million) over the £7 million ($A13.25 million) cap.

It's a massive story in rugby. But what exactly did Saracens do wrong, how did it unfold and what happens now?

What did Saracens do wrong?

Premiership Rugby has a salary cap of £7 million ($A13.25 million), with the wages of two marquee players exempt.

Saracens has been England's - and Europe’s - most dominant club side in the last decade and with a very large stable of high-paid international players, including Owen Farrell, Maro Itoje, Billy Vunipola and Australian Will Skelton, won five Premiership titles and three European Champions Cups since 2010-11.

Their three European titles have come in the last four seasons.

After media reports Saracens had broken the salary cap via a secret co-investment scheme between owner Nigel Wray and several star players, a nine-month investigation was carried out by Premiership Rugby.

In November it determined Saracens had breached the £7 million salary cap in each of the last three seasons.

It was reported by the Times that Saracens were £1.2 ($A2.27m) and £1.3 million ($A2.46m) over the cap the 2017-18 and 2018-19 respectively.

Saracens were found guilty of failure to disclose payments to players and while no detail from the investigation was made public, the payments are believed to be centred around the co-investments in property made by Wray and the companies of senior players like Farrell, Itoje, Richard Wigglesworth and the Vunipola brothers.

The club denied co-investments were an attempt to cheat the salary cap.

The investigation also found Sarries had breached the cap in 2013-14 but a compensation settlement was reached with other clubs.

How were they penalised?

Saracens were fined £5.36m ($A10.15m) and docked of the maximum 35 premiership points for the past breaches. That sent them to the bottom of the Premiership ladder.

It must be pointed out that the bottom side of the English Premiership gets relegated each season.

Saracens vowed to fight their way back and win enough games to avoid relegation.

The fine was distributed to each of their Premiership rivals.

Only the start of Saracens' problems

As much as they’d have liked them to be, Saracens’ problems with the salary cap were far from over.

Saracens are on track to be well over the £7m salary cap for 2019-20 - reportedly by as much as £2m.

A new interim chief executive Ed Griffiths  was brought in and though he thought he’d be able to get the club under the salary cap by offloading players, Griffiths soon discovered that was next-to-impossible given rival clubs did not have the room under their cap to take highly-paid Test stars during the middle of the season.

The Times reported Saracens were given an ultimatum by Premiership Rugby to avoid further penalty:

* Cut £2m from their wage bill by the end of January

* Hand back the Premiership trophies from 2017 and 2019

* Nigel Wray’s resignation as chairman.

* The appointment of a new independent chairman.

Wray resigned as chairman but along with the acknowledgment they couldn’t get under the salary cap, Saracens also told PRL they would not give back the trophies.

Further penalties and relegation

At a breakfast meeting on Saturday, Saracens players were told the club will be docked another 35 points for being over the cap in 2019-20.

That amounts to a 70-point deficit to make up to avoid relegation.

What happens next? Will players leave the club?

The RFU Championship is a decent standard from which a club rises to the Premiership each year, but it is still a long way down for the mighty Saracens club.

They will be playing against clubs like the Cornish Pirates and Hartpury University.

Even if they win the European Cup in 2019-20 - and many believe they will - the London club will not be eligible to play in the competition next year.

There is no salary cap in the Championship, meaning Saracens could theoretically keep their whole roster and run at a budget ten times the size as anyone else.

Many players at lesser clubs attach “relegation get-out” clauses in their contracts but it’s unknown whether any huge stars at Saracens would have felt the need to safeguard themselves in that manner.

Players will hold individual talks with the club in the next week to determine their futures.

The club still needs to offload talent to get back under the cap for a potential 2021-22 return to the Premiership.

Many players may elect to stay, or contractually have to stay, but senior stars who play for England may be given loan deals for a season to Premiership rivals, to ensure they don’t damage their chances for selection in the English team or for the 2021 British and Irish Lions tour to South Africa.

That could mean a cut-price deal for Sarries’ rivals, with the wage of a Farrell or an Itoje shared between the clubs.

Players could elect to go to France but they’d be unable to play for England.

Could Super Rugby clubs sign some players?

Possibly but the players would likely have to take massive pay cuts, with wages in the English premiership generally far bigger than in Super Rugby.

Loan deals could again be a possibility but the seasons don't line up neatly, and the Six Nations would also make it unlikely any northern hemisphere Test stars would go south.

Skelton is signed until the end of the 2021 season and the big lock returning home is a possibility. But he would likely attract big money offers from other overseas clubs as well.

Is there more news to come?

Quite likely. Many believes Saracens will be formally stripped of their 2017 and 2019 premierships.