Saracens' punishment for breaching the Premiership's salary cap regulations will act as "an excellent deterrent" to other clubs, according to Sale Sharks director of rugby Steve Diamond.

Sarries, the reigning Premiership and European champions, were docked 35 points and fined £5.36m after an inquiry into business partnerships between owner Nigel Wray and some of their players.

"They've been foolish in what they've done but it looks like it was not intentional," Diamond told BBC Sport.

"But the powers that be have determined the punishment to be significant.

"It's an excellent deterrent for other clubs if they thought about going down that route."

Saracens originally stated they would appeal the sanction, which they described as "heavy handed", but on Monday the north London club confirmed they will not be contesting their points deduction and fine.

Mark McCall's side have subsequently dropped from third in the table to bottom of the Premiership with -22 points.

Diamond, who spent two years as Saracens head coach between 2004 and 2006, has previously stated rugby union will "bankrupt itself" if clubs are not stopped from breaching salary cap rules.

"It's a very wise decision that Saracens have accepted what the findings were," he added. "We can put the matter to bed.

"The game is embryonic. It's only 25 years old as a professional game and we already see £30-40m losses each year in the league and we want to try to cap that.

"That's what the salary cap is there for.

"They'll have a difficult job staying in the league this year and if they do, then good on them."