Dodson: We will be a strong business again
Scottish Rugby was a strong business before coronavirus struck and will be strong again when the pandemic ends.
That was the pledge from Chief Executive Mark Dodson to member clubs at the second stage of the union’s AGM, which was held digitally tonight, reconvening the meeting that began in August.
Dodson told member clubs: “The business is stable and is in the process of securing its medium-term future.
“We face ongoing challenges that may obstruct our progress and alter timeframes but ultimately Scottish Rugby was a strong business going into this pandemic and will still be a strong business when we come out of this crisis.”
The meeting heard that, last season, a World Cup year with only four home international matches at BT Murrayfield, compared to six the previous season, Scottish Rugby had been on track to deliver turnover of £59 million.
But, he said, the effects of the virus in the last few months of the 2019-20 season, meant turnover came in at £55.5million, down from the £61million in the previous season.
Dodson reported that Scottish Rugby’s share of CVC investment in the PRO14 – a deal that had been piloted from the outset by Scottish Rugby – enabled the Union to record a surplus before interest and tax of just over £3million for the 2019-20 season.
He warned, however, that the ongoing effects of Covid, particularly the absence of spectators, could result in the loss of £18million to the business by May 2021, making it imperative that Scottish Rugby continued to work in tandem with Government to secure the return of crowds as swiftly and safely as possible or receive some rescue package to offset the draining absence of turnstile income.
He explained that the financial information he referenced tonight was subject to final audit and would be presented to member clubs for their scrutiny and approval at the third stage of the AGM in December.
The reason for this timeline?
He said: “The most important (reason) is the need to offer our stakeholders the most accurate and up to date picture we have on our financial situation as we deal with the ongoing effects of coronavirus.
“Much like organisations across the country right now, auditors are required to look for as much certainty as possible in the 12 months ahead. For Scottish Rugby, a critical element of our revenue results from match day attendances, which when set against a backdrop of ongoing Government restrictions and an ever-changing sporting landscape, has made financial forward planning challenging and unpredictable.
“Therefore, we have taken the time to ensure we could present the most up-to-date projections and related support from the Bank to satisfy the auditors’ review of our financial year ahead.
“Our original time horizon took us to the end of the current financial year. As the virus has re-emerged and the economic outlook began to look more uncertain, (Scottish Rugby’s auditors) PWC have needed to test our assumptions and look beyond this current year through to the beginning of 2022.”
Mark Dodson's speech in full
Dodson continued: “The length of the outlook period and the need to allow for a serious plausible downside risk has resulted in us restructuring our finances with the Bank.”
Such risk could include the continued absence of fans at the 2021 GUINNESS Six Nations Championship or even through to only 25% attendance at the 2021 Autumn Tests.
Dodson added: “I am delighted to say that we are about to conclude an arrangement with (the Bank) that delivers flexibility for the Union and satisfies these heightened expectations.
“This process takes time and a certain amount of patience especially in the current business climate. I am pleased that our forecasts have been subject to rigorous examination and challenge.
“It has resulted in us negotiating a bank facility which offers the game a level of security that you, our members, would expect and places us in a better position to cope - should these downside risks materialise.”
Dodson touched on the UK Government’s £300million winter sports rescue package that was announced last week.
He said: “Our belief in government support has been evidenced by the emergency support delivered in recent days through (the Department of Digital, Culture, Media and Sport).
“Rugby in England received a significant support package acknowledging the impact Covid-19 has had on the game at all levels.
“We in Scotland are waiting to hear the details of the Scottish Government’s support plan. Wales are also unclear about the support they will receive.
“We expect that the combination of our revised banking arrangements and a material support package from government should go some way to repairing our finances and allowing the game in Scotland to return to health.”
Dodson, Scottish Rugby President Ian Barr and Board Interim Chairman John Jeffrey all thanked clubs, employees and the wider community for their understanding during a period which has seen no grassroots rugby played since mid-March and last week saw the announcement of the close of the competitive club season for 2020-21.
Jeffrey said: “The enormous amount of creative work, skill and preparation involved in securing investment from CVC into PRO14 and most likely into Six Nations will be seen as a life saver for Northern Hemisphere unions when this period is assessed in the future.
“I urge us all to look to the future and see the post-Covid world as a place where we can thrive without rancour and mistrust and come together AS ONE to rebuild the game at every level.”
Elsewhere during the AGM, a motion from Currie Chieftains, seconded by Glasgow Accies, to amend certain Union byelaws to “reset the balance” in allowing the Scottish Rugby Council to oversee and review the management of the Union, was passed by 157 votes to 16.
A motion from Glasgow Hawks, seconded by Grangemouth, on openness and transparency was approved by 157 votes to 16.
At the subsequent Special General Meeting, a motion from Biggar, seconded by Dalkeith, to promote the teams who had won promotion for the 2020-21 season, which was declared null and void as a result of the pandemic, fell with 90 votes against to 78 for.