THE NRL has stripped Melbourne Storm of two premierships, as well as any competition points this season, in the toughest punishment for a salary cap breach in NRL history.
NRL chief David Gallop has just announced the extraordinary penalty, after it was uncovered that the club paid $1.7 million to its players outside the cap in the past five years.
The Storm have been stripped of their premierships in 2007 and 2009, three minor premierships and their eight competition points this season. They will not be able to accrue any more points this season, have been fined $500,000 and must pay back $1.1 million in prize money.
Storm and former chief executive Brian Waldron, the architect of the salary cap breach, accordiing to John Hartigan.
Storm and former chief executive Brian Waldron, the architect of the salary cap breach, accordiing to John Hartigan.
"The elaborate lengths that they went to to hide the payments was quite extraordinary," Gallop said. "These payments have allowed them to recruit and retain some of the best players in the game. There's no alternative for the NRL in terms of penalty."
Gallop said that the club had run a long-term system of "two sets of books".
"This morning the Storm representatives have come in and confessed to a well-organised system of paying players outside the cap. On what we know this amounted to $1.7 million in the last five years, including approximately $700,000 in 2010.
"The breakthrough in the investigation was the discovery by the salary cap auditor [Ian Schubert] and his team of a file in a separate room at the Storm to the room that contained the file with the players' contracts."
In statement released by the NRL, it was revealed that "the Storm maintained a dual contract system and the club has today confirmed that side letters promising extra payments were stored in a secret file at the home of the Chief Executive. The accounts were structured in such a way that it would appear the commitments were not apparent to either the Melbourne Storm Board or its owners."
News Ltd chairman John Hartigan said "at this early stage" the architect of the elaborate payment system was former chief executive Brian Waldron, now the boss of incoming Super 15 rugby union team Melbourne Rebels. The Storm are owned by News Ltd.
The Storm's acting chief executive Matt Hansen has been stood down.
Hansen and chairman Rob Moodie left NRL headquarters this afternoon after a meeting to discuss the allegations.
Hansen and Moodie left without commenting to the waiting media and are believed to have departed in a News Ltd car.
The penalty far exceeds that imposed on Canterbury. In 2002, the Bulldogs were deducted 37 competition points and fined $500,000 after being found guilty of salary cap breaches totalling more than $1 million in two seasons.
It took the Bulldogs from the top of the table to eventual wooden spooners.
The New Zealand Warriors were docked four points in 2006 for less serious breaches, but the punishment ultimately cost them a finals berth.
Bookmakers suspended betting
Several bookmakers had earlier today suspended betting on the NRL wooden spoon following a stream of bets for Melbourne to finish last.
Sportingbet Australia and SportsAlive both shut down their wooden spoon markets after fielding several bets at 250-1, with punters standing to win $10,000 on single bets.
Title favourites Melbourne are fourth on the NRL ladder after four wins and two losses.
TAB Sportsbet left its market open, but wound the Storm into 20-1 for the spoon after taking a $200 bet at 200-1 for a collect of $40,000 last night.
The NRL has been investigating a third-party agreement between Storm captain Cameron Smith and FoxSports.
Under salary cap rules, third-party agreements do not count under the salary cap as long as the club played no part in negotiating the deal. The deal has been queried as the Storm are wholly owned by News Ltd and FoxSports is part owned by News along with Consolidated Media Holdings.
The Herald Sun newspaper reported last week that Schubert, the auditor, had also insisted three other third-party deals must count under the Storm's salary cap as well as the termination payment to Origin star Dallas Johnson.
"We took three bets to win $10,000 and another to win $8000 for the Storm to win the wooden spoon all within 10 minutes of each other this morning," Sportingbet Australia spokesman Bill Richmond said.
"You don't take a series of bets like that unless someone knows something and we have suspended betting on the wooden spoon as a result.
"Melbourne is now our worst result for the wooden spoon despite the fact they are premiership favourites."
IASbet also suspended betting on the wooden spoon this morning, with the Storm paying a dividend of $151.
IASbet.com’s Matt Campbell said his agency had suspended betting on the NRL wooden spoon after a couple of “fairly odd” bets when Melbourne were $251-1. He said there had been “nothing big” with IASbet, and the wooden spoon was a “more of a novelty market”, but his agency was in no hurry to lift its ban.
“We’ll sit tight, we’ll sit on our hands for the moment,” he said, indicating his agency was “reacting accordingly” to the rumours circulating about Melbourne Storm’s salary cap penalties.
Most agencies do not run markets on the wooden spoon. Betfair, which runs a betting exchange, rather than operating as a bookmaker, says it has not had any significant bets on Melbourne to win the wooden spoon.
Betfair spokesman Hugh Taggart said that his agency would not void a market based on hearsay and rumour, and it would take advice from the NRL for Betfair to stop the public betting on the market.
“We would only avoid a market in an extreme circumstance.
“Punters always bet on rumour and innuendo.
“Our markets will be dictated by what happens in the public domain.”
Taggart said there were only $12,000 in bets currently matched on the wooden spoon market.
TABSportsbet spokesman Glenn Munsie said he didn’t think much of the initial $200 bet on Wednesday night until further bets followed this morning.
‘‘The spark starts, becomes a brushfire, becomes a bushfire,’’ Munsie said.
‘‘It all started in a couple of places this morning and they’re now coming from everywhere.’’
http://www.smh.com.au/rugby-league/leag ... -td91.html
EXPLOSIVE documents detailing illegal payments to three Melbourne Storm players have been given to News Ltd by the club's former acting chief executive, Matt Hanson.
Greg Baxter, the director of corporate affairs for News, last night told the Herald the documents had been forwarded to the NRL's salary cap auditor, Ian Schubert.
The documents refer to payments due to have been made this year and are disguised as third-party sponsorship deals.
Lockdown ... Melbourne Storm headquarters.
Lockdown ... the doors are closed at Storm headquarters after a forensic taskforce moved in to secure the club files. Photo: Craig Abraham
Melbourne was hammered with a series of enormous penalties by the National Rugby League on Thursday for cheating the salary cap by $1.7 million.
After three sponsors withdrew more than $2 million yesterday, the Storm's owner, News, has been forced to commit to propping up the disgraced rugby league club indefinitely.
The media company had intended selling the Storm when an independent commission took over the running of rugby league from News and the ARL at the end of this season. It will now need to spend an estimated $30 million over five years to keep the club afloat.
The Storm chairman, Rob Moodie, who described the penalties as ''exceptionally severe'', said News would also have to provide the $1.6 million in fines and prizemoney Melbourne must repay.
The NRL management team's decision to impose the penalty without consulting the full NRL board - comprising three representatives each from News and the ARL - has angered directors, who were excluded because of the potential conflict of interest faced by the three News representatives. The Storm has been also stripped of two grand final wins and three minor premierships and will receive no match points this season.
There were $1 million worth of breaches from 2006 to 2009 and the new documents apparently go a long way towards accounting for the projected breach of $700,000 for this year.
The documents are not related to the part of the rort connected to a rented marquee.
The Herald revealed yesterday that the money that covered most of the first $1 million in breaches was based on the supposed hiring of a marquee by the Storm to entertain guests at home matches.
The club recorded in its official accounts that it had paid the marquee's owners, Melbourne Olympic Park, up to $20,000 each time it used the marquee when, in fact, the contract between the club and the ground included use of the marquee. The money was then funnelled to players.
Mr Baxter said the files were ''the first documentary evidence that relates to the Storm breaching their salary cap in 2010''.
''The particularly important thing about them is that they were stored at Hanson's house and, we believe, previously at [former chief executive Brian] Waldron's house,'' Mr Baxter said,
''They are copies of letters to three different player agents from Waldron, in late 2008 and early 2009,'' Mr Baxter said. ''Each letter details schedules of payments to be made to three Storm players. All three letters are signed by Waldron. Two of the three letters have been signed by a player and their agent, and one has also been signed by a witness.''
Mr Baxter refused to reveal the identity of the players or their managers but said the letters had been given to the NRL.
Mr Baxter said the letters contained no evidence of who the third party sponsorships were supposed to have been paid by.
He also said the letters were written in such a way that players reading them could be forgiven for not thinking they were doing anything illegal.
http://www.smh.com.au/rugby-league/leag ... -tj52.html
Three of Melbourne's sponsors- mebank, Host Plus and Skins have ripped up sponsorships as well
