WHEN John McGuigan sat down with The Offside Line last week, he was speaking before publication of Scottish Rugby’s Annual Report revealed a £10.5m loss in the most recent financial year. Given that he was unveiled as the new Chair of the SRL Board just as that accounting period was ending, responsibility for these results does not fall at his door – but they will be a critical consideration during his first full year in office.
There is concern that costs have run out of control, and he will be under pressure to prove that this has been addressed by the time the next set of accounts come out. However, the area where he feels he can really help change the shape of the business is on the revenue side, not just because more cash coming in means more money to spend, but also because it is an opportunity to sell the game to a wider audience and thereby grow the sport.
We are at the start of a new era in the way sport globally is accessed and consumed by both participants and supporters, which presents both opportunity and risk. McGuigan reasons that digitally native customers are fundamentally different to the customers who have come before, so Scottish Rugby needs to understand and embrace what that means now or fail in the future.
While a recently published EY [Ernst & Young] Sports Engagement Index revealed that rugby is currently the fourth biggest sport in terms of engagement [i.e. watched/followed, participated or attended in the last 12 months] amongst all adults in the UK, it does not register in the top 20 for 18 to 24-year-olds, which gives an indication of how precarious the situation is.
“We need to control costs, [but] we also need to invest in the game, therefore we need to generate more income,” says McGuigan. “My sense is that in a competitive environment, when you are fighting for every customer, you need to think differently about everything. So, let’s use a men’s international match-day as an example of something which can be a valuable revenue generator for the business and also a shop window to our sport.”
“How do you build-out facilities in the stadium which means people come three hours ahead of kick-off and decide that they are going to spend time and money at the venue whether on food or merchandise?
“They might not even have a ticket for the game but if the architecture and facilities are right across the whole Murrayfield campus, they can still come and enjoy the atmosphere and continue to buy drinks and food whilst watching the game on a big screen with their mates.
“Then, when the people who have watched the game in the stadium come back out, everyone can mix together again, meaning your time in Murrayfield might be a six or seven-hour experience, rather than dropping in for two or three hours which is probably the norm at the moment.
“Also, when I walk into the stadium, the marketing at the moment is very generic and doesn’t speak directly to me,” he continues. “There’s traditional branding and marketing which I can’t really relate to so we need to think about how we can personalise that more.
“I think you should receive a clip on your phone when you arrive as a welcome, which is from Jamie Ritchie [the Scotland men’s team captain] with a personalised message targeted at me.
“It can have a bit of advertising in it as an extra revenue opportunity for Scottish Rugby and it should give supporters an idea of what is available on the day, like experience driven activities which can really engage people such as seeing if you can run as fast as Duhan, kick like Finn or jump in a line-out like Richie.
“Then, as well as that experiential stuff, you also get directed to multiple stations with a range of food and drink options which cater for different tastes, and where a range of merchandise is available.
“So, I just think there is so much we can do to really push the envelope from a customer experience point of view which will also go a long way to helping sustain the business at the level required.”
‘We need to look at the whole campus with fresh eyes to try an understand what’s possible’
While the recent accounts justified the hike in Scottish Rugby’s wage bill as capital investment, what McGuigan is talking about here is real strategic spending which can redefine the business forever.
“Nothing is decided yet so I’m not making any promises,” he stresses. “But there is so much potential there which we are not currently accessing.
“Murrayfield has an amazing footprint close to main transport links but the actual stadium itself was designed over 30-years ago purely to watch rugby in, so we need to work quickly to modernise our facilities if we are to meet fans’ expectations.
“We need to look at the whole campus with fresh eyes to try an understand what’s possible.”
McGuigan’s business background means he can speak about growing customer engagement from a position of authority.
“When I was with Telefonica, we had the O2 in London, which started off with concerts then developed into all sorts of things that were really, really helpful,” he says. “We modulized the arena so that we could accommodate quite small and quite big events, but they always felt they were the right size for the venue.
“A lot of what we did was demonstrating that if you are an O2 customer you get a lot of privilege when coming to the arena, such as when there is a big concert on then after the event is finished the artist will go and play a few songs in a smaller arena which we’d offer to only O2 customers through a prize draw, invite or priority access to the ticket sale. We need to think about how we build out the facilities at Murrayfield so that we can accommodate a whole range of events.
“The other component part for me is you’ve got a global audience of people who are either Scottish or have Scottish affiliation and would love to support Scotland, so how do you bring the game to them even though they’ll never come to Murrayfield Stadium?
“And how do you attract all those other people who don’t have view on Scotland, but might use Scotland as the first rugby team they have ever supported – [who] would love to buy merchandise, would love to enjoy the game more, would love to be a part of it in terms of knowing the players, and will go along if Scotland happen to do a tour in their corner of the world?
“So, the whole data and analytics piece, and how we digitise a lot of what we do so that we can take it to more people globally, is an important part of it as well. We’ve got a lot to do in that space, especially when you compare rugby to other sports who are already much further down that track.
“If you don’t spend time just now looking at where things are going in other sports, and the blending in sport and entertainment, I think people would naturally come back to us in a few years’ time and say: ‘What were you doing? Why weren’t you part of that conversation? Why didn’t you have a creative idea about what this could mean for rugby?’
“Of course, we don’t have all the levers you can pull because some of them are exclusively World Rugby issues, but there is still a lot you can do locally, to say: ‘This is what is possible! Even within the constraints of where we are just now, look at what Scotland has done’.
“We are a small nation, but we’ve got a massive number of people who identify with Scotland and we need to make sure we communicate what Scottish rugby stands for, in the same way that New Zealand have been excellent at developing the All Blacks identity.”
‘We can’t wait until World Rugby does it, or Six Nations do it, why don’t we push it ourselves?’
Ultimately, McGuigan is advocating that rugby in general, and Scottish Rugby in particular, needs to become more assertive about what it stands for and what it can offer both committed supporters and potential new customers.
“Rugby is a fantastic game and it has also got hugely strong underpinning values – why wouldn’t you use that to show what’s possible?” he reasons. “And you’ve got to start somewhere, you can’t rely on anybody else doing it for you. You can’t wait until World Rugby does it, or Six Nations do it, why don’t we push it ourselves?
“We need to get better at providing the sort of direct access to players that fans can really relate to, because that is something other sports are already doing well. The URC has started to do some good stuff on this, but I believe we are still in the foothills of selling our sport to a new audience by making people feel part of something really personal.
“In today’s world, when it is more about sports entertainment, you need to make sure you’ve got a product which you can present to media and marketing people, and they get it. They say: ‘You have really high participation, you have a sport with a lot of jeopardy in terms of tournaments where there are winners, losers, promotion and relegation, and you’ve got interesting personalities we can profile to create something which people who are not even interested in the sport want to engage with’.
“The passion is already well established in rugby, but you still have to sell the product to people, and at the moment other sports are trying really hard to sell their product, so we have to think about how we package our sport in a way that is attractive not just to people who are already converts, but also those who haven’t been properly exposed to rugby yet and could get a lot of enjoyment from it.”