03/05/2016 10:39 AM AEST | Updated 15/07/2016 12:52 PM AEST

Parramatta Eels Fined $1 million And Docked All 12 NRL Premiership Points For Salary Cap Breaches

Mark Nolan via Getty Images
SYDNEY, AUSTRALIA - APRIL 29: Parramatta players celebrate a try by Vai Afu Toutai of the Eels during the round nine NRL match between the Parramatta Eels and the Canterbury Bulldogs at ANZ Stadium on April 29, 2016 in Sydney, Australia. (Photo by Mark Nolan/Getty Images)

The Parramatta Eels will be fined $1 million and stripped of all 12 of their 2016 Premiership points for breaching the NRL's salary cap.

NRL CEO Todd Greenberg broke the news to coach Brad Arthur and a devastated Eels squad early on Tuesday morning. He then outlined the staggering breadth of the breaches to a packed media conference.

"Regrettably the results at this stage are not only disappointing, they’re a stain on our game," Greenberg said of the findings of the NRL integrity unit, which had examined more than 700 thousand documents in two months.

"The preliminary findings suggest the operation of a deliberate, co-ordinated and sustained system of salary cap cheating on the part of the club, and 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 executive.

"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. Based on these findings, we believe these strategies have been involved:

  • Paying players undisclosed remuneration from the club's own resources;
  • Sourcing third party agreements for players in breach of the salary cap rules;
  • Arranging with club suppliers to inflate or issue fictitious invoices to raise money that was to be made available to the players."

Three million dollars. That's how much Parramatta players have been overpaid in total. Three million dollars since 2013. Mr Greenberg wouldn't specify how many players were involved but he did say it was a "large number".

"This has to stop. And it stops today," he said.

Greenberg also confirmed reports that five Eels officials have been deregistered by the NRL and will leave the club. They are club chairman Steve Sharp, deputy chairman Tom Issa, director Peter Serrao, CEO John Boulous and head of football Daniel Anderson.

For the NRL, this is the toughest crackdown on salary cap rorting since 2010, when the Melbourne Storm were fined $1.7 million, and stripped of two premierships, after five years of systemic salary cap breaches.

For the Parramatta Eels and their fans, this is devastating. The Eels are considered one of rugby league's heartland clubs but have not won a premiership since 1986. They have also not participated in finals football since 2009, when a remarkable run of late season form -- headlined by the brilliant Jarryd Hayne -- took the Eels from an eighth-placed finals finish to the grand final.

The Eels lost that grand final to the Storm. Eels fans have always claimed they should have been awarded the premiership retrospectively. Little did they realise they'd end up in the same sort of trouble themselves.

Adding misery to the situation is that the Eels have won six of nine games so far in the 2016 season. They looked genuine finals contenders this year but the finals are a long shot now. Club stalwarts are talking up an unlikely run of 12 wins in 15 matches to scrape into the finals, but that assumes an incredible run of form from both the players and the club accountants.

Greenberg said the Eels will be able to play for premiership points again this year, but will have to reduce this year’s cap by $570,000 before they can do so. He said it was now up to the club to gets its house in order. The most likely course of action is that some players will be cut from the squad.

"Our rules are clear and we will follow them to the letter. If the club moves quickly they’ll be playing for points in this year’s premiership."

The NRL CEO also stripped the Eels of their Auckland Nines preseason tournament trophy, and said that the role of player agents and players in the scandal would also be examined.

He would not be drawn on whether the police would become involved in investigation of a potential fraud, saying that was a matter for them.