"This is the day no one in rugby league wanted to see."
That's how NRL CEO Todd Greenberg opened his address to the media at Tuesday morning's announcement that the Parramatta Eels would be stripped of all competition points while non-salary cap compliant, the 2016 Auckland Nines title and fined $1 million - $250,000 to be withheld if the club accelerated it governance reforms – for exceeding the NRL salary cap.
"[It's a] tough day for one of our great clubs. [It's a] tough day for the game and a truly heartbreaking day particularly for Parramatta fans and their players," Greenberg said.
"But sometimes the hardest thing to do is also the right thing to do.
"Over the past two months the integrity unit has undertaken the biggest investigation in its relatively short history into the salary cap operations at the Parramatta club. It's obtained more than 700,000 documents and interviewed board members, football staff, club officials, former officials and a range of relevant parties.
"Regrettably the results at this stage are not only disappointing; they're a stain on our game. The preliminary findings suggest the operation of a deliberate, coordinated and sustained system of salary cap cheating by the club.
"Based on the information we currently have, we believe the system was conducted with the knowledge and support of the club's board and senior executives.
"In short, the preliminary findings point to the operation of a range of strategies since as early as 2013 to get around the salary cap to give the club an advantage over its competitors."
Those strategies include paying players undisclosed remuneration from the club's own resources, sourcing third party agreements for players in breach of the salary cap rules and arranging with club suppliers to inflate or issue fictitious invoices to raise money that was to be made available to the players.
The preliminary findings suggest that the Eels exceeded the salary cap by over $3 million in the past four years, and were around $570,000 over the cap for season 2016.
"We have given the club numerous invitations to come forward and be up front about its activities, but to this point they have failed to do so," the NRL CEO continued.
"They have breached the salary cap rules in five of the last six years. As we sit here today, our preliminary findings suggest that the club is again over the salary cap for 2016.
"This has to stop and it stops today."
Having warned the club on a number of occasions about what it deemed to be financial irregularities, Tuesday's announcement sent a clear message that the NRL would no longer tolerate what it perceived to be a lack of transparency.
"On the basis of the preliminary findings, I have issued show cause notices this morning to three members of the Parramatta Board and two senior executives that proposes their registration is cancelled," he said.
"This means they will not be able to be involved with the club in any way.
"In terms of the club, I have issued a breach notice that proposes the maximum financial penalty of $1million, with $250,000 of that to be suspended if the club accelerates the governance reforms recommended by PwC (PricewaterhouseCoopers) last year.
"And most regrettably, the Parramatta Eels will be docked all competition points accumulated so far during the 2016 NRL Telstra Premiership while the team has been in breach of the salary cap.
"The club will be able to accrue points as soon as it makes the necessary changes to comply with the cap and I genuinely hope that is very soon. We will assist in that process wherever possible."
Mr Greenberg indicated the Eels had the right to respond to the proposed penalties and that Tuesday's decision wasn't final.
"The nature of these preliminary findings is such that the club has a final opportunity to do so and we will consider the club's response with an open mind," he said.
"It's important that everyone understands that we will not reach a final view on either conduct or sanctions until the club and the officials have had a chance to respond.
"I know this is a devastating outcome for many people, particularly the players and the fans.
"The strong performance of the Eels this year has been great for rugby league and has been great for their huge supporter base.
"If the preliminary findings prove to be justified, we cannot allow any club to continually thumb its nose at the salary cap. So we have to go through this pain for the long-term health of both the club and the game."
