Mick Hogan isn’t pulling his punches a week after salary cap cheats Saracens accepted automatic relegation from the Gallagher Premiership.
The sordid unravelling of the London club will go down in history as possibly the most incredible story ever in English domestic rugby, but their guilt has come too late to save Newcastle from the pain and anguish they are enduring following relegation from the top flight last season.
It was only November when Saracens were retrospectively punished for their off-field accounting shenanigans the previous three seasons, too late to save the Falcons from the financial heartache they are currently experiencing in the second tier.
Managing director Hogan isn’t directly blaming Saracens for the trauma that Newcastle are enduring, Friday night’s trip to Nottingham being the latest pitstop in a season of purgatory. But all the same, belatedly finding out that a rival club had cheated – and had consistently done so for some time – leaves a sour taste.
“We were relegated for lots of other reasons. You can’t look at Saracens and say that is the reason for relegation. There were lots of others reasons we ended up in twelfth,” he told RugbyPass in a lengthy interview at the end of an extraordinary week where Premiership Rugby finally published its salary cap investigation for public consumption eleven weeks after its findings resulted in a £5.36million fine and a 35-point Premiership deduction.
(Continue reading below…)
Damning report reveals the extent of the Saracens salary cap breach
“But every club can feel a grievance because a team has cheated and you know it’s not a level playing field. Ultimately, they are the rules. It doesn’t matter whether you agree with them or not, they are the rules that have set and have been set for a number of years now and you have got to abide by them.
“A lot of our supporters, the ones that I have spoken to, have said, ‘Look, at the end of the day they are cheating and deserve to be punished’. One or two think the relegation is too severe and one or two think it’s regrettable. But there is little sympathy.
“I really think there is little sympathy amongst rugby fans because some of the fans have sensed and suspected it [salary cap cheating] for years and certainly fans of other clubs have a lot stronger feelings.
“If you look at the Saracens team you would have thought, ‘How do you get all that under the current salary cap?’ They do have an excellent academy, don’t get me wrong. They do produce a lot of their own players and they should be commended for that.
"My intention with co-investments was always to support players beyond their playing careers."https://t.co/mOxya4nit8
— RugbyPass (@RugbyPass) January 23, 2020
“But once players reach a certain level, that is international level, it doesn’t matter if they have come through your academy or not they expect quite rightly to be recompensed as an international or a Lions player and they aren’t cheap. In some ways, they are victims of their own success.
“The punishment that has been handed out, the second punishment is obviously quite severe. It’s given because of what is considered to be the scale of the breach and although some people say it renders the bottom half of the table this season almost pointless because you know Saracens are going to be the team that is relegated, I’d rather this being done in season than retrospectively at the end of the season once everything is known.
“Personally, I’d commend Premiership Rugby for acting so quickly. One of the limitations of the punishment that was imposed on the previous three seasons is that it has been done after the event and it has not had any effect on the three seasons where the salary cap breaches were evident.
“It’s a penalty post those three seasons. I know for some people that has not been satisfactory because you want whatever the punishment is to be applicable to the season when the transgression was made. That wasn’t possible with the first punishment but this one is within the season where they are evidently not going to get under the cap.
'The snowball is finally becoming an avalanche and the Saracens salary cap saga is undeniably now the biggest scandal ever to hit English club rugby'
— RugbyPass (@RugbyPass) January 18, 2020
“The salary cap is a quite rigorous process but ultimately it can only so far. Legally it can’t look into private banking accounts and there has got be a degree of good faith and accepting what has been submitted.
“So I don’t think you can blame the system, I don’t think you can blame the audit because it is as thorough and as rigorous as it can be. Ultimately, this one has come down to interpretation, Saracens believing that what they did was within the rules or sat outside the cap, but it has been proved not to have been and they have suffered the various penalties.”
Relegation has been a brutal ordeal for Newcastle. Before their fate was sealed, Hogan had warned last March that its consequences were potentially devastating, telling RugbyPass: “Unfortunately people lose jobs when teams get relegated, whether that is staff, whether it is players or whether it is coaches, whatever. But we know that and that is what we have got to deal with. No job is guaranteed in life, never mind in sport. That’s the harsh reality of it.”
Nine months on, the cloth cutting has been severe even if the dreaded job cuts were avoided. In the Premiership, they enjoyed an average attendance of 9,166 and a high of 27,284 attending their annual marquee match promotion at the football cathedral of St James’ Park.
Down in the Championship, though, a tournament where six of its twelve participants are somehow existing despite average attendances of below 1,000, Newcastle have attracted an average 4,433 for their four home league games so far.
It has been tough for Hogan and co to keep the show on the road and even if they do get promotion back to the top flight, he fears it might not be until 2021/22 when the club has finally financially regained the ground lost due to relegation.
“Commercially it hurts you and it doesn’t just hurt you for one season. It will take at least next year and potentially until the season after to fully get back to where you were,” he suggested, explains the ramifications of what a fall from grace does to a club.
“We were lucky that all of our sponsors remained with us but with each other of those sponsors, they have either paid a slightly reduced rate because there is a relegation clause in there or we have kept the fee the same but have had to deliver additional commercial rights which is effectively a cost to the club.
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— RugbyPass (@RugbyPass) January 20, 2020
“So relegation affects sponsorship, but the biggest area it affects is gates and it is two-fold. You get lower attendances and the average ticket yield reduces as well because, no disrespect to some of the opposition we play in the Championship, fans want to see the likes of Leicester, Saracens, Bath, Wasps, the big names, the international players, and the names are less well known in the Championship.
“As has been proven so far this season there is amongst the fans – certainly not the team – a level of inevitability about results. Ultimately, people want to see close contests with the result in the balance until the final whistle. That is any sport, not just rugby. And when you get a series of games where one team wins and wins quite comfortably in a number of games then that will affect ticket sales.
“On and off the field we have had a recruitment freeze. People that were in jobs maintained their positions but in some cases, there has been a reduction of salaries or we have not been able to invest as much as we want to in certain staff, so that is on hold until we get promoted because ultimately our revenues are down and we can’t support our plans to grow the club off the field.
“There are other things as well. The annual game at St James’ Park, we didn’t put it on this year because we ran the numbers every way and the game would have probably ended up losing money, so we couldn’t risk that.
“A lot of the fans that come to that event, it’s their first or only experience of club rugby that year because our average attendance jumps from 7,500/8,000 to 30,000. We are finding well over 20,000 new fans for that game but with the best will in the world, they are not going to come to watch a game in the Championship, so that event loses its momentum.
“There is every chance we will get it back on again next year but it’s almost like starting from scratch. It has definitely taken a step back with that big event for us. It’s not just about the increased revenue it gets, it gives rugby a higher profile within the region for that weekend and that is about long-term growth, getting more people interested because we are in a part of the country where there is the least amount of rugby participation and that has always been the case.
‘I can understand why some of the fans haven’t been this year but it is doubly hard to get that habit (of going to games) back. Every club has a churn of supporters, you try to minimise that and what you hope is the new people you bring in are bigger than the churn.
“That is what we have been able to do over the last few years. We have more than doubled our average attendance in five years between 2014 and 2019. The average used to be just over 5,000 and it jumped to over 10,000 in the Premiership.
Here's one reason why Saracens' squad depth allowed them to steal a match on their rivals https://t.co/Ri8h7M7N6Q
— RugbyPass (@RugbyPass) January 21, 2020
“It helps when you’re able to move games but we will jump back down to probably around between 5,000 and 6,000 this year on average so it’s quite a reduction and that has implications. Backstage, you sell less beer, fewer programmes, your advertising is not worth as much. Fewer ticket sales in itself is considerable but there are implications on other revenue areas as well.”
When their likely promotion is eventually confirmed, Newcastle’s books will be checked by a salary cap audit to ensure everything is above board for their return to the Premiership where the basic wages ceiling is £7m, something the Falcons have never been troubled by. This season alone their wage bill was considerably lightened by loaning England’s Mark Wilson to Sale and allowing Scotland’s Chris Harris to join Gloucester amongst other switches.
“At Newcastle, we would have one of the smallest if not the smallest salary. We are one of the smaller clubs for all the reasons I spoke about, we’re not in a traditional rugby area. We have salary cap space. There has never been a season where we have had to rely on credits or injury dispensation or marquee players to get under the cap. We are quite comfortably under the cap.
“Yes, it would remain an ambition of the club to be able to spend up near the cap, but we have one of the smallest spend on players and that is just trying to maintain the club in a sustainable way as possible – and we still make losses like nearly every other club. We’re ambitious, we push it as far as we can but we don’t have the resources to go and spend what many other clubs do.”
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