THE SCOTTISH RUGBY UNION have now taken 28 days and counting longer than any of the other three ‘Home Unions’ to publish their annual accounts for the 2019-20 financial year, meaning that stakeholders remain in the dark about the shape of the business at the start of the Covid-19 crisis.
As previously reported, the Welsh Rugby Union produced their accounts on 14th October, which was 106 days after their year-end on 30th June 2020.
The RFU [England] share that 30th June year-end and produced their accounts on 29th October, which means there was a 121 day lag.
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And the Irish Rugby Football Union, who have changed their accounting date from 30th April to 31st July in order to align their financial year with their playing season and accommodate any summer tour, produced their accounts on 23rd October, which was 84 days after their accounting period ended.
Meanwhile, Scottish Rugby’s 2019-2020 financial year ended way back on 31st May, which was 149 days ago, and there is still no sign of the accounts, despite the Union’s bye-laws stating that they should be made available by the end of August.
It is understood that both the Scottish Rugby Board and the SRU Council will sign off the accounts at meetings this week, but that does not necessarily mean that they will be instantly released.
However, with it being announced last week that part two of this year’s SRU AGM will finally take place via video conference on 26th November, and with Chief Executive Mark Dodson having previously stated that the accounts will be made available to clubs before this event, we should expect sight of the financials in the next couple of weeks.
Even when the accounts do come out, there is no obligation to include all the details (like director’s remuneration) which are legally required in the statutory accounts which must be lodged at Companies House at the end of May (the deadline has been extended by three months for businesses in response to the Covid crisis).
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A brief analysis of the IRFU accounts provides some interesting context for the SRU accounts (whenever they are eventually published):
- Total income dropped from €85.6m in 2018-19 to €76.9m in 2019-20.
- Gate Receipts dropped €5.8m because of the loss of the home Six Nations match against Italy due to Covid and the usual three Autumn Tests being replaced by two World Cup warm-up matches. Fortunately, Scotland had played both their 2020 home internationals before lockdown so there will be no equivalent cost in the SRU accounts.
- Their World Cup surplus was €0.8m more than had been expected – and commercial income was up.
- Expenditure went up from €84.2m to €114.9m – but this is distorted by:
- The extra three months payroll costs arising from the change in accounting date estimated at €15m which is a paper cost and should have no long-term financial consequence.
- A provision of €16m against advances made to the provinces to cover on-going wage costs during the pandemic, with the accounts stating that “it is important to note that this represents a movement on a provision and should not be interpreted as a forgiveness of any part or all of this debt”.
- So the accounts show a €35.7m loss for the 15 months to 31 July – but €15m of this is a paper loss arising from the change in accounting date which will have no long-term financial consequence, and £16m relates to funds advanced to the provinces to ameliorate the impact of Covid-19 which may (or may not) be repaid – meaning the only hard cost is the €5.8m from the cancellation of the Italy game.
- The spend on Domestic & Community rugby for the 15 months to 31st July 2020 was €15.3m against €11.2m in the year to 30th April 2019.
The IRFU report also stressed that a clear strategy is in place for dealing with the Covid pandemic.
“When this crisis first hit the Union took immediate action by agreeing salary deferrals with staff and players,” explained Tom Grace, Honorary Treasurer of the IRFU. “As time passed with no sign of crowds being permitted to return it was agreed that the deferral scheme would be replaced by cuts and reductions in working time ranging from 10% to 20% which is the situation we find ourselves in now.
“We are very fortunate to have cash in the bank and an asset strong balance sheet at the moment. However, these resources won’t last forever and any amounts that we are forced to spend now will affect what we will have to spend in the future when some semblance of normality returns. At present we are able to fund ourselves and the Provinces for the next 12 months even without further remedial action, but this needs to be kept under constant review and our next major review date will be in December.”
The IRFU were clearly in a much stronger financial position than SRU at the start of the pandemic with their 2019 accounts showing net current assets of €42.8m (£38.5m), against SRU’s net current liabilities of £6.9m.
It was confirmed yesterday that the IRFU has been allocated €18m (£16.2m) from the Irish Government’s €70m (£63m) Covid 19 Emergency Fund for Sport.
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Make that 39 days now and counting.
Glad I did not hold my breath.
Despite lots of murmerings I understand we might just see them this weekend.
Meanwhile we the clubs will no doubt be asked to adopt them at the AGM in less than two weeks time, when to date there has been no announcement as to whether there will be any facility at the AGM to ask questions.
Would anyone adopt anything in this situation?
Especially given that last year we adopted a set of accounts with the lowest profit levels since before Gordon Mackie, which were subsequently found to contain payments to four individuals around seven times these profits, and over 3% of total revenue?
Exactly, George. Suspicions mount, by the day!
When the accounts do surface, and lets face it they have to eventually, I would bet the Clubs don’t get them till the last possible moment, and some members of the Media, not at all.
Regardless of how tardy the SRU are in delaying them they will be viewed forensically of that I am certain.
The obvious point I would suggest is the longer the delay the greater the suspicion is that the reason for that delay is in someway: well suspicious. Perhaps it is obstinance from certain quarters [now who could that be?] that is a primary factor.
Surely no one can be so stupid as to think that their critics will just fade away and/or that they can do an ENRON job on the accounts.
As I type I can’t help recalling a political PR commenting on the day of 9/11 that it was ‘a good day to hide bad news’, perhaps there is a feeling at Roseburn St. that that’s a good reason for dragging their feet with the Wuhan Lurgy on the increase once again.
Exactly, George. Suspicions mount, by the day!