ALL across the world, rugby fields and clubhouses lie empty and eerily quiet – but in Scotland this week, both media and social media channels have reverberated to the noise of chickens coming home to roost.
From the outside looking in, the decision to defer 30 percent of the salary of SRU Chief Executive Mark Dodson and 25 percent of the salary/fees of his fellow Board members for the period from 1st April to 1st September does not seem like an outrageous response to the Covid-19 lockdown. It is a similar route to that taken in Dublin by the IRFU.
However, Tuesday’s announcement prompted a deafening cacophony of complaint and criticism from across the rugby landscape on the basis that these salaries should have been cut rather than deferred, as happened in England and Wales (as well as Australia and New Zealand although the southern hemisphere is not really a fair comparison because they have very different economic models and have been hit harder because this has happened near the start of the revenue generating parts of their season).
One letter to The Offside Line from the vice-president of one of Scotland’s oldest clubs seemed to sum up the pervading view –
“I read with incredulity that Messrs Dodson, Townsend, Howat etc have graciously agreed to a deferral of full payment of their inflated salaries until 1st September – the chair, Colin Grassie, dresses this up as some sort of fantastic contribution to the fight against Covid-19 and all the implications it has for rugby in Scotland.
“At the same time, I read that all players and staff at the WRU have taken a 25 percent pay cut, as has Eddie Jones and the RFU, and Rugby Australia has laid off 75% of its workforce! All those countries and more have all also posted clear warnings of substantial losses for their respective financial years. Rugby USA has even filed for bankruptcy!
“Am I missing something or do those within BT Murrayfield not understand the real world?! How can Scottish Rugby possibly be in any different position than the rest? What sort of message does it send to all rugby clubs and everyone involved in the game here? What do other sports think of our so-called governing body?! I also note that Steve Clarke and the SFA officials have taken cuts and 50 percent of their staff have been furloughed. Pep Guardiola, Andy Robertson, Steven Naismith and many others have made huge personal contributions to charitable causes. Why are Grassie, Dodson, Howat et al not doing the same and setting some sort of responsible example?!
“The Nolan principles, which the Gammell review trumpeted so loudly, includes the value of selflessness, integrity and leadership – I see little of these being demonstrated by the current regime which is charged with looking after the best interests of the game in Scotland. Yet again their actions smack of self-interest and a complete failure to see the bigger picture. It is shameful.
“At the same time, I see that Italian flanker Maxime Mbanda is volunteering as an ambulance driver in Italy – that puts everything into perspective.”
Those few left defending Dodson will point out that executive payment schemes and the decision to take deferrals are two separate matters – but they can’t escape the fact that the first issue creates the context for the second.
There has also been a curious fixation on the idea that because more than half of Dodson’s £933k emoluments for 2018-19 came via five different bonus payments accrued over a three-year period, this in some way justifies that eye-watering figure. However, until we have clarity on the basis of these bonuses, that line of defence is not going to hold much water with those who are appalled at how much he is taking out of a sports’ governing body with a turnover of just £61m.
Even if we take his average remuneration over the last three years and index it against turnover, it looks pretty indefensible against the other Home Unions. Dodson averages £650k per year, which is 1.15 percent of SRU turnover. Meanwhile, his English counterparts have averaged at the very most £710k (although it is not entirely clear as there has been three different CEO’s during that period) looking after a much bigger business, meaning their remuneration has been 0.37 percent of turnover. Martyn Philips of the WRU has averaged £343k, which is 0.39 percent of turnover. Ireland CEO Philip Browne’s remuneration is not as readily available, but we understand that it averages close to 0.2 percent of turnover.
Incidentally, the SRU’s turnover during this period from 2017 to 2019 has grown 11.1 percent, while the RFU’s turnover has gone up 15.3 percent, the WRU’s turnover has gone up 20.8 percent and the IRFU’s income has gone up 11.2 percent, so let’s put to bed the idea that some sort of money-making miracle is happening at Murrayfield.
The bottom line is that Dodson has been grossly overpaid – at a level completely out of step with the size and nature of the business – and he is just going to have accept that this will frame all future exchanges he has with the wider sport. If that inhibits his ability to do his job properly, then that is a problem that he must address. Taking a wage cut instead of a deferral would not have evaporated all the ill feeling out there, but it would have perhaps eased some of the tension.
It is worth noting that Dodson and his executive chums won’t see any of this deferred money unless they successfully negotiate the business through this crisis, although you do wonder – based on track record – what will be sacrificed at the other end to scramble that money back as quickly as possible.
Of more immediate concern is how the rest of the business is going to be streamlined in order to cope with this short-term (hopefully) contraction in income.
The SRU are perhaps the best placed of the tier one nations for this situation. They got their two scheduled home Six Nations games played this year, and although they will miss out on some commercial spin-offs from the most valuable summer tour schedule in over a decade to South Africa and New Zealand, the international game should be back in time for the money-spinning Autumn Tests.
Player wages is the biggest cost for the Celtic nations, and with only two professional teams Scotland are in a far better position than Ireland and Wales, who both have four full squads’ worth of players to pay. Comparisons with England are tricky because it is a completely different model, with the professional game being run by wholly independent – though heavily subsidised – clubs.
There will still, however, be a considerable financial strain caused by this lockdown, and the road to full recovery will be long and arduous. It is hard to imagine the SRU getting through this without further significant belt tightening.
To that end, the IRFU announced on 20th March that it had agreed, in collaboration with its four provinces and the national players’ association, a payment deferral model for all employees, based on an equitable sliding scale which ranges from 10 percent to 50 percent effective from the start April.
The WRU announced last Tuesday that not only are senior rugby staff, including head coach Wayne Pivac and executives including Phillips, taking a 25 percent reduction to salary, but also that “according to business need, further staff will take pay cuts of either 25 percent or 10 percent with the difference broadly accounted for by the extent to which roles are directly related to professional rugby,” and that “furloughing, in accordance with the government’s Job Retention Scheme, will be implemented where applicable until the end of May”.
RFU chief executive Bill Sweeney issued a statement last Wednesday unveiling a £7 million relief package for community clubs, and explaining that: “Based on our planning assumption we estimate RFU revenue losses over the next 18 months to be approximately £45-£50 million and have a firm plan in place to mitigate this. The RFU Executive Team will be taking a cut in remuneration in excess of 25 percent. In addition, combined Board fees will be reduced by 75 percent.” We also know that the wider RFU workforce face temporary cuts for three months, with a sliding scale to be introduced starting at a 10 percent reduction for those on over £30,000.
None of this will have been what the staff wanted to hear, but at least they quickly had an idea of where they stand.
To their credit, the SRU led the way in club support by setting up a £500,000 hardship fund just two days after the shutdown was announced, but in terms of how the core business will be affected, the silence from Murrayfield has been deafening.
Staff were issued an update on Friday, but there was no mention of extending the salary deferral programme or furloughing.
At least they can draw comfort from the fact that the Board cannot possibly countenance wage cuts when they have only taken deferrals themselves.