THE Scottish Rugby Union have announced cuts in salaries for earners over £50,000, plus plans to furlough as many as 75 percent of the 450 staff, as a belated response to the coronavirus crisis.
The governing body’s initial reaction to the lockdown, which has halted all rugby activity for the foreseeable future, was to announce that the Board and leading coaches were taking salary deferrals to run from 1st April to 1st September. However, as the full scope of the crisis has become apparent, a more radical response became necessary. The doomsday scenario would be if Scotland’s Autumn Tests against Argentina, Japan and New Zealand are not able to go ahead, which would cost the SRU in excess of £12 million in income [around 20 percent of total turnover].
Discussions with the players – who collectively account for the lion’s share of the SRU’s salary expenditure – have been ongoing over the last fortnight before reaching a sudden conclusion this morning.
The new proposal will see 10 percent wage cuts over a five-month period for all staff earning between £50,000 and £75,000 per year, 15 percent cuts for those earning up to £100,000, a 20 percent cut for those earning up to £200,000, and a 25 percent for those earning more than that. It is understood that around three-quarters of the players on SRU contracts are in the below £100,000 bracket.
In Wales, players are facing 25 percent wage cuts across the board for anyone earning over £25,000 per year, although this is initially only for the next three months.
Under the new arrangement, chief executive Mark Dodson’s 30 percent wage deferral until September has been turned into a wage-cut, which works out as about £56,875 of his £455,000 basic salary. His fellow board members have now taken 25 percent cuts (as opposed to deferrals) in their salaries/fees.
All four executive directors – Dodson, chief operating officer Dominic McKay, general counsel Robert Howat and chief financial officer Andrew Healy – have also given up their bonus entitlements for this year.
While Scotland were fortunate that both of their home Six Nations matches this season went ahead before the lockdown, the early close to the domestic season, the likelihood that there will be no merchandising and television revenue from the summer tour to South Africa and New Zealand, and the fact that Murrayfield cannot be ‘sweated’ for non-rugby related events means that the business now faces a period of significant strain.
“Our income streams are being badly affected as match day receipts and other revenues from the likes of PRO14 and EPCR fixtures and activity that might otherwise be taking place at BT Murrayfield are interrupted,” said Dodson, in a letter issued to clubs and posted on the SRU website this afternoon.
“Like many we hope the professional game season can be completed, but have no guarantee that even a truncated end to any of the competitions will happen.
“As it now stands it would appear very unlikely the annual Summer Tours to the Southern Hemisphere will take place. This has a further impact on our income.
“There is also developing uncertainty on when Scottish Rugby might be able to put Autumn Test tickets on sale, and indeed if these games will go ahead as originally planned.
“The significant ticket revenue from these games would normally come into Scottish Rugby during the summer. With wider social uncertainty we also don’t want to place a burden on our supporters at this time, given the challenging circumstances everyone finds themselves in.”
“If the Autumn Tests were to be cancelled, then we face a further loss of expected revenue well in excess of £12 million. We have to assume that any league or tournament rugby would also then be unable to take place for a period, exacerbating the loss of income.
Despite all these concerns, Dodson stressed that “around 75% of all Scottish Rugby’s people will be unaffected by these changes and have their salaries maintained”.