Potential cost of shutdown to Scottish Rugby continues to rise

Dominic McKay says previous quoted figure of £12million is sure to be exceeded if there is no resumption by November

Dominic McKay has warned that the cost to Scottish Rugby of the lockdown in sport lasting into next season could well exceed the £12 millions previously stated. Image: Fotosport/David Gibson
Dominic McKay has warned that the cost to Scottish Rugby of the lockdown in sport lasting into next season could well exceed the £12 million previously stated. Image: Fotosport/David Gibson

IF rugby has not returned in time for the 2020 November Tests, the hit to Scottish Rugby’s turnover will be significantly more than the £12 million mark which has previously been cited, according to Dominic McKay, the organisation’s Chief Operating Officer.

“Mark [Dodson – Scottish Rugby Chief Executive] was speaking about £12m a few weeks ago in respect of our three Autumn Tests, but I think we can safely assume that the number would be north of that on the basis that if we don’t have Autumn Tests then you also wouldn’t have any professional rugby taking place in Scotland,” explained McKay.

“Importantly, you also wouldn’t have grassroots rugby taking place in Scotland, so it would have a profound and significant impact on our finances.”


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Understanding the full financial impact of the Covid-19 lockdown and the subsequent social distancing measures which will likely be required until a vaccine is found, has been a process of gradual realisation for those running the game.

Last Tuesday, Bill Sweeney, Chief Executive of the RFU, gave a fairly bleak assessment of the impact on English rugby if the Autumn Tests don’t go ahead, when he appeared in front of a hearing held by the Department of Culture, Media and Sport [DCMS].

“If they go ahead but behind closed doors that is a negative impact of £85m and if they are cancelled entirely that will be £107m on top of the £15m we have already lost,” he said. “So, it is a very significant loss of revenue and we are doing what we can to mitigate it.”

This was just over a month after the RFU had forecast £45-50m in lost revenue over the next 18 months as a consequence of the crisis, which gives a fairly sobering indication of just how quickly the projected financial damage is escalating.

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Scottish Rugby has not, so far, been as forthcoming and detailed about their financial modelling, but McKay insisted that Murrayfield is being as open and transparent as it can be in the circumstances.

“Things are constantly changing just now,” he reasoned. “As we get more clarity on the furlough scheme and how long that’s going to go on for, that will enable us to make further updates.

“With the way things are at the moment, as soon as you reference a number, it can then be out of date very quickly.

“But, from an operations point of view, we do recognise that it’s a significant challenge. We’ve had some amazing sponsors who are standing by us and being so supportive, including broadcasters. We’re very grateful to them.”

“We’ve seen the numbers that have been shared by others and the numbers that were shared at the DCMS committee,” he continued. “It just shows that every governing body – regardless of size or financial muscle – is facing an enormous challenge.

“The only way that we’re going to protect our respective sports is by making some tough decisions, but also by working really closely with our governments. Our governments will be key to getting sport restarted.

“Once sports restarts, only then can the sport start generating revenue again to protect itself.”

Making the most of Murrayfield

Like all other sports, Scottish Rugby’s hands are tied until government advice allows them to move forward, but they are proactively looking at ways to minimise the damage, including the creation of a self-contained hub at Murrayfield where various elite sports can return to action in a safe environment – which could lead to football’s Scottish Cup semi-final between Heart of Midlothian and Hibernian being played at the national stadium.

“We’re just scoping that out,” said McKay. “This week’s conversation with the government was just the first step on that journey, to say: ‘is this something that would be of interest?’

“The feedback we got was that they would like us to develop that concept a bit further, so we’ll now take it away. It covers a whole raft of areas, but we’re fortunate that we have a great, large, open-air site at Murrayfield which lends itself to being configured in any way we wish it to be configured.

“It’s a very flexible space, so anything from managing the entry – who comes in and out – to thermal imaging opportunities on arrival, the one-way system around the site, the ability for players to park at the side of the pitch and go straight onto that pitch from their car.

“We’ve got some thoughts on that, but we’re going to detail it a bit further and that’s the work that’s being done by James Robson [Scottish Rugby’s Chief Medical Officer] and the team. We’ve got some smart people looking at that, looking at examples of best practice from other parts of the world.

“For us to solve the sporting challenge that we’ve got, we must collaborate, and I was very strong on that at Tuesday’s meeting [with Scottish Government Sport Minister Joe FitzPatrick]. In Scotland, sometimes we’re a bit parochial, so if we can collaborate around how stadia might operate, how training venues might operate, how grassroots might operate in terms of messaging and advice, that can only be a good thing for the whole country right now.”


Dominic McKay remains hopeful of November Test schedule going ahead

 

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David Barnes
About David Barnes 1943 Articles
David has worked as a freelance rugby journalist since 2004 covering every level of the game in Scotland for publications including The Sunday Times, The Telegraph, The Scotsman/Scotland on Sunday/Evening News, The Herald/Sunday Herald, The Daily Mail/Mail on Sunday and The Sun.

8 Comments

  1. It is impossible to give a definitive number. You have no idea how long the Govt schemes will be in place, what income from other sports might or might not be possible, whether you could run a limited PRO14 with the Welsh and possibly the Irish. Murrayfield are not transparent but no business can do anything other than guess at the potential losses. And the one thing the current regime have done is dramatically improve the SRUs financial position.

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    • Let’s play that forward Rodb

      That dramatically improved position in the future will be what exactly?

      My view is that they will require a substantial loan to get through this. And to be frank judiciously getting mega sponsorship deals that did most of the debt pay down helped immensely. What’s that? Without Dodson and McKay those deals wouldn’t have happened! Nonsense

      Scottish Rugby is a bums on seats business. No bums no money Where else might the funds come from?

      * slim down the pro teams
      * move fringe players into S6
      * reduce Murrayfield headcount
      * reduce club funding
      * mothball capital investment.

      Plus massive loans to bridge the gap.

  2. Dom McKay taking up comedy now?

    “ McKay insisted that Murrayfield is being as open and transparent as it can be in the circumstances.”

    The one certainty we can take is that Murrayfield avoid openness and transparency at all costs.

    Here’s the thing. It’s acceptable to revise your figures as new information comes along so treat the Rugby public like adults and share your scenarios.

    Any can we stop with the revenue rubbish please? Yes the AIs generate up to £12M revenue. If they don’t happen there is a commensurate reduction in expenses – like players not getting paid for playing, staffing stadium on match day etc. What is the actual financial impact?

    19
    • if you want to find fault, you will.
      It would be better to talk in terms of the effect on profit or loss than revenue, of course it would. However all unions are talking in the same terms – loss of revenue. TBF to them that is much easier to quantify. The profit or loss depends on how many staff you lay off, whether the govt still pays 80% of furloughed wages and other factors on optional costs. Perhaps we should tell all the staff including players now that they will simply be paid off

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      3
    • When are they going to admit their attempt at a coup has failed and several of their puppets will now depart having failed the game, the clubs, the supporters and followers of the game in Scotland?

      11
    • Sceptic 9

      It’s rather too easy to find fault with statements from Murrayfield. I would much prefer to applaud decisive actions however difficult they will be.

      You sort of slipped though. “Profit or loss depends on how many staff you lay off etc”. What makes you think that there will be a profit? We scraped a £300k profit last year I would offer that 2019-20 figures were going to be bad before Covid. No AIs, a disastrous World Cup campaign and the small matter of a £70k fine.

      The RFU are talking about a six year recovery plan. We operate at a different level to them but it’s likely we will need a similar horizon.

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