MARK DODSON says that latest calculations predict that Scottish Rugby faces an £18million hit in revenue due to Covid-19 lockdown/social-distancing measures, but he believes that this can be offset by the business achieving £14million in savings through belt-tightening in every department, and he is determined that there will be no redundancies.
An overdraft facility has been secured with The Bank of Scotland to ease the inevitable cashflow squeeze caused by the ongoing crisis.
While the forecasts coming out of Twickenham have been catastrophic, with over 100 community coaches and rugby development officers being cut adrift and the England Sevens programme being scrapped, the news emanating from Murrayfield earlier today [Friday] was of a far more optimistic flavour.
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The Chief Executive acknowledged that the situation is serious but stressed his commitment to ensuring that the governing body is in good shape so that it can quickly bounce back once the storm subsides.
“We’ve got a good handle, I think, on what kind of shortfall we’ll be looking at this year – we’re looking at an £18million shortfall in our revenue position – so it’s a serious situation as far as we’re concerned, and we’re taking all the appropriate steps to manage that,” said Dodson, during a wide-ranging media briefing conducted by video link
“I would say it’s a current case,” he replied, when asked if this figure was a worst-case scenario. “It’s very realistic. We’re being very prudent in our measures. We’re trying to take advantage of all the data that’s there. I would say that the £18m is more at the harsh end, but again, it only needs the Six Nations to be cancelled and then we’re into a whole new scenario.”
Scottish Rugby’s total turnover for the year up to the end of May 2019 was £61million, so we are looking at a hit of almost one-third of annual sales, however Dodson – who was speaking publicly for the first time since 13th June – insisted that there will not need to be the same sort of sweeping cutbacks as has been witnessed elsewhere across the globe.
The importance of bounce-back-ability
“As I’ve said before, our ambition is not to lose a body as we go through this whole process – not to make redundancies – and the reason for that is because we want to maintain the capability to bounce back once this pandemic is over, and not cut our ability to do that,” he said.
“It is quite clear that we will have a cashflow problem as we go through this pandemic, but we have to come out of it fairly swiftly and have a robust infrastructure to make sure we can grow back revenues as soon as possible.
“To give you some idea of what is taking place, there are going to be cuts across every single department in the business. Some of those budget reductions will take place largely through a lack of activity – if you are not playing games then you are losing revenue but you are saving on expenditure as well in terms of travel, preparation and so on.
“We are also going to have less age-grade games but we are going to keep the Under-20s in a certain programme that will be reduced because of the nature of Covid and the travel that can take place.
Protecting the grassroots
“We have tried to protect our grassroots game through our ‘Rugby Development’ department,” he added. “Our mission is not to cut that department as deeply as we would normally do for the simple reason that we believe our clubs need our support as we work through this pandemic. And we think our community development officers and regional support framework will be needed to make sure that we can get rugby played as soon as we possibly can.
“But we are going to be taking roughly £14million of costs out the business this year.”
The season structure for domestic rugby has not yet been agreed, and the level of direct funding to clubs is unclear. In fairness, he wasn’t asked specifically about this. What Scottish Rugby calls ‘Club Support & Development’ cost the governing body £2.9million last year.
Meanwhile, with staff costs accounting for 52 percent of expenditure, it appears inevitable that the current programme of wage cuts for higher earning SRU staff will have to extend in some form beyond the initial 1st September deadline, but Dodson was not giving too much away.
“We’re currently talking to our people about that,” he said. “As you know, we have asked our employees earning over £50k per year to take pay cuts, and we are humbled and respectful of how they have dealt with that up until now with their willingness to work with us through this crisis.
“So that has been a meaningful contribution to the overall number [level of savings], but it is also about activity and things we are no longer doing, it is about budgets being trimmed across our commercial and other operations. We are making sure that this is a blended solution across the whole piece, without losing staff as we go because we are going to need them as we come back.”
Saving the 7s
Dodson added that there are no plans to cut the Scotland 7s programme, even though there will not be any HSBC World Series tournaments to play in during the remainder of 2020.
“The big issue here is that we see 7s slightly differently from the other Home Nations,” he explained. “When we made the changes in 2015, we turned the 7s programme into a development pathway for our club teams and academy players.
“We believe very strongly in our 7s programme for bringing players back from injury, for giving people the opportunity to regain form, and giving players the first opportunity to play on the international stage. So, while we have no objection to coming together as a GB team for the Olympics, we still believe very strongly in our ability to play independently as Scotland on the World Sevens circuit and at the Commonwealth Games.
“Some of our 7s players will come in and start training with our professional teams while we are finding out what is happening with the global circuit.
“One of the things we found the last time we looked at our 7s involvement was that there wasn’t any great appetite for Scotland to lose that capability – I think that came through loud and clear from the public, and it came loud and clear from our internal stakeholders. So, although the ‘business school solution’ would be to cut back on things that are extra to the core business, we have taken note of what was said in 2015 and I don’t think that will change any time soon given the Ned Haig and Melrose connection.”
Money makes the world go round
On the revenue side, Dodson said the full value of the extended Autumn Test schedule – which will see Scotland play six matches, including Georgia, France and Japan at home, plus potentially one more match at Murrayfield on 5th December – remains unclear.
“If we have crowds during the Nations Cup matches that would have a positive effect, and if our broadcast revenue from the Nations Cup exceeds what our normal Autumn broadcast deal would be then that would be a big positive – but when you consider we had New Zealand as part of our Autumn schedule this year, that was a good proposition for our broadcasters, so we have to see how the whole Nations Cup concept is viewed.”
He is hopeful that CVC Partners private equity house will have bought their slice of the international game by that point, in a deal which is reported to be worth in the region of £300million.
“The negotiations are going well,” he said. “They’re thorough and based upon a new world, but also recognising the value of our sport. We’ll hopefully be able to bring those negotiations to some kind of a conclusion by the end of the summer.
“What that conclusion will be, it’s far too early for me to say. I can only say that the conversations are good, solid and very honest.”
He was asked if this CVC money will be ring-fenced in the same way as the proceeds from the deal with the PRO14 league was back in May.
“We’ve got to get the money first,” he replied. “If money comes in, we’ll deal with it at that time, but most of our stakeholders see anything to do with Six Nations as being part of the clubs.
“The Pro14 money is seen as being generated by the pro game, by new entities and a new competition. Anything from the Six Nations is going to be seen as being much more fundamental to our stakeholders and our union.
“There will be a period of reflection as to what we do with that money.”
In the meantime, the Bank of Scotland will help make sure that the lights stay on.
“We’ve got to do what everybody else is doing as we face a cashflow issue. We haven’t had any meaningful revenue since February – and that is a tragedy because we were trading incredibly well up to then – so we have been talking to the banks for the last three or four weeks and the reason for only talking [publicly] about this now is that we wanted to wait until we had secured our bank facility, which we have now done. Bank of Scotland have been tremendously supportive around helping us through this pandemic.
“What we found is that [due to] our track record of increasing revenues and reducing debt in our recent history, the bank recognise that we are well run and sound on a financial perspective, so that has given them confidence to provide this facility to take us through our pandemic.
“But it will mean that we are indebted again and we will have to trade ourselves out of it, by doing the same thing we did previously which is aggressively pay down debt and increase revenues at the same time.
“The management have got a track-record of delivering that – the bank recognises that – and I am very confident that we will trade through this pandemic to come out the other side with a sustainable, competitive and sound business.”
Heres the thing Mister C, William and Sceptic 9 (if you are reading this). How about giving us some counter argument? Reasons why MD is the greatest CEO ever? What it is that he has done or is doing that will make things better?
Nah – just rely on the usual ad hominem attacks and moan. Nobody forces you to visit here or comment. So if it irks you so much why bother?
So to get this right, in a post where you ask for reasoned debate you throw out a line about the greatest CEO ever, something no one has even said, that point is just waffle and shows the point some are making
People return to the site as the articles are typically of interest, naturally they will look in on the comments, it’s never a shock so few engage with them given the typical standard of debate by the usual names and posters, don’t take it to heart it’s just a true observation, the same names making the same points, over and over and over and over and over again.
William says “the same names making the same points, over and over and over and over and over again.”
Oh the irony!
Strange post, you would be lucky if you needed two hands to count the number of posts I have made on this site over the years.
Thanks William. I will take that under advisement.
So back to you – MD is doing a good job by (insert your answer here). You are free to share with us all the things he has done to advance Scottish rugby since he joined.
And yet they all say the same William.
But enough of that. How about answering Dom’s question and providing some examples?
I think you have got me mixed up with someone else, a bit of fail on your part here.
Nope I’ve just read your many posts on several threads in the last few days all saying the same. Bit of a memory fail on your part here.
What a load of nonsense, and just showing why so few post on here, enjoy the ” very small” circle of friends 🙂
People will notice you still have not been able to answer Dom’s question and instead concentrate on denying things which are available for everyone else to see.
Is Donald Trump your role-model?
What are you talking about James ya dafty.
I haven’t answered the question because it is a crap question, things can be more than simply good or bad.
James, what are you talking about, you sound very silly. 🙂
I didn’t answer the question because it isn’t very good, there is more to things that simply MAN – GOOD – MAN – BAD, it’s a question from the stone age, things have shade, context, situation and nuance.
I agree William. It was very silly of me to expect you to be able to provide an answer to a straightforward question. In my defence I didn’t expect anything else from you but at least I gave you a chance to justify your comments and make yourself look a little less ridiculous.
Still time for you to redeem some credibility but I think we all know that won’t happen will it?
Over to you for more waffle but no answers ……
@James give it up mate, I did just answer the question in that last post 🙂 stop being so needy for company, you aren’t finding much in here though that I do admit. 🙂
Cheerio now, enjoy the sounds of the echoes of your own posts 🙂
Ah the usual strawman argument from William. No attempt to answer Dom’s question asking for some examples of what Dodson has done to enhance Scottish rugby other to say that is a bad question!
Only nonsensical suggestions that I am alone in my view of Dodson which anyone with a modicum of intelligence can see isn’t the case frome looking at this and other threads. (To be fair I can see why William struggles here).
I won’t suggest he gives it up though. It’s always good to have someone to laugh at and William certainly provides that!
I’m living rent free inside your head James 🙂
It’s seem pretty clear you are nothing but a troll William so I will leave you to play with yourself. Judging by your posts you have been doing that for a very long time.
Given all the negativity of past comments that have been critical of MD’s wages, in particular his bonus structure, it is worth remembering that this same bonus structure might be the very reason why he works his socks off for the next year. I for one am therefore hopeful that having a ‘money man’ in charge right now helps Scotland over the coming year/s. With that said, perhaps we’re better off judging his worth after the next couple of years. If he fails us, i’m sure Raelene Castle would fancy another shot at the big time….
How many more years of failure do you want before you judge him?
As for “working his socks off” well words fail me.
Sad to see the usual negative comments towards Mr Dodson who is doing his best under very trying circumstances which are unprecedented.
Haha, nice try Mister D!
We aren’t paying him £455k (before voluntary cut) for Mr Dodson to “try his best”. He wasn’t rewarded with a £478k bonus for “trying his best”.
Trying your best is when you get a “we are all winners” certificate.
True, the comments on this article are just the same regurgitation of the same posts from the same people that typically follow most articles regardless of the content. It’s an echo chamber of the same 5 or so voices saying the same things. It isn’t surprising comments that follow articles are always so low, which is a shame as the content deserves a lot better.
There’s a comment from Plymouth Albion’s Commercial Director in today’s Guardian noticing the absurdity of Eddie Jones earning four times the annual salary of the Prime Minister at a time the game is struggling to survive.
The same point applies equally to SRU executive directors salaries.
There’s another few million that could be saved by getting them all to reapply for their jobs at more realistic salaries.
There are many experienced and seasoned Scottish professionals who would take on these jobs at a token salary for the love of the game.
And it’s more obvious by one of the world’s most successful and sought after coaches commands such a big salary than it is for the SRU’s CEO.
There’s a comment from Plymouth Albion’s Commercial Director in today’s Guardian noticing the absurdity of Eddie Jones earning four times the annual salary of the Prime Minister at a time the game is struggling to survive.
The same point applies equally to SRU executive directors salaries.
There’s another few million that could be saved by getting them all to reapply for their jobs at more realistic salaries.
There are many experienced and seasoned Scottish professionals who would take on these jobs at a token salary for the love of the game.
And it’s more obvious by one of the world’s most successful and sought after coaches commands such a big salary than it is for Dodson on over a million.
The phrase fine words butter no parsnips springs to mind.
Bravado & bluster rules!
A course of sodium thiopental might prove beneficial.
Dodson appears deluded (or possibly strangled by his once-shiny halo, currently stuck around several of his chins).
There’s an Alice In Wonderland quality to Dodson’s comments.
GBP14m of savings but with no adverse impact anywhere and no or negligible redundancies.
Seems like there’s a magic money tree at Murrayfield too.
Finally, overdrafts are of course payable on demand.
At £3m, the Club Support and Development costs only makeup 5% of Murrayfields expenditure – sounds good to Clubs in the run-up to the AGM though that their budget won’t be cut as “deeply”.
If the other cost centres can make up the majority of £14m savings without losing staff, then why has this not been done previously – but it’s hard to believe as 52% of costs are staff costs.
Big cuts coming to budgets – 23% cost savings across the departments look like:
International and Pro Rugby – £7m
Domestic and Performance Rugby – £2.3m
Commercial & Operational – £3.5m
Club Support & Development – £0.7m
On the surface that’s good news. I hope it’s doable not least for the people at Murrayfield.
How a business that turns over £61m manages a drop of £18m with a decidedly patchy (at best) outlook will be crucial.
Some thoughts
What’s the size of the overdraft? That would indicate the scale of the problem facing SR The upside is we will stop hearing about no debt (which was false anyway) at AGMs.
Trade out of this situation. That assumes life will go back to relatively normality in a reasonable timeframe. RFU projecting 6 year recovery period.
Scenarios. MD describes the £14m as a realistic scenario. I wonder what worst case looks like? Personally I’m a plan for the worst hope for the best type of guy.
Pay cuts. About time. The execs specifically are over paid.
No redundancies. What MD said was “ our ambition is not to lose a body as we go through this whole process – not to make redundancies” Those are very carefully selected words. He hopes they don’t have to make redundancies. That doesn’t exclude people taking voluntary severance if that’s on offer.
If he manages to pull off this retrenchment without redundancies Dodson will be the toast of the business world and can select whichever CEO position he wants.
Much still to happen and unfold. If we can bring the Covid incidence down again we can look forward to some rugby at last.
So there we have it! The chubby Mancunian re-surfaces….. and what do we find?
Brave words, but a bit of the ostrich in Dodson’s DNA? In denial…..?
Clearly not the manager for a major crisis, on this occasion clearly demanding greater reductions in fixed costs & (staff) overheads to accompany the absence of activity-related expenditure. Avoidance of redundancies down the line will be miraculous!
Time will tell. Yes indeed, the pandemic will prove definitive in this instance.
Happy with what TCD has to say, and would be delighted if there were no redundancies.
However, should they become necessary, he could give me a call. Like the Lord High Executioner in The Mikado: “I’ve got a little list, and there’s none of them be missed.”
Amidst all his rose-tinted blustering positivity, I wonder if the SRU CEO can see that any business able to effect £14 million in “belt-tightening” cost-saving cuts in a single year may not have been managed in the most efficient or cost-effective manner…?
Sounds positive, obviously with so much uncertainty around it could change. Heartened that they are going to try and retain personnel and teams.