The Board Has The Authority - But Do They Have The Right?

YESTERDAY'S post got one or two of my regulars commenting, and speculating – which got me thinking too.

They were much-energised by the October, 2016 Special General Meeting, at which the following motion was passed unanimously:

“Subject always to the prior approval of the Board of Directors of Scottish Rugby Union plc (the “Company”) and on such terms as the Board of Directors shall consider appropriate, THAT the Company be and is authorised to dispose to a third party or parties, whether by sale of or subscription for equity, assignment, sale, transfer or otherwise, of any part, or if thought fit or arising through a series of transactions, all of the business, undertaking, assets or interests of the Company comprised from time to time within its professional and performance rugby operations.

This authority shall not extend to the disposal of the whole or any substantial part of the Company’s heritable property at BT Murrayfield Stadium, Edinburgh, notwithstanding its use to support professional and performance rugby activity.”

Rob Flockhart, the SRU President moved the 2016 motion 

At the time this motion was passed, the belief was, it gave the Board authority to seek and recruit outside investors in the money pit which was (and is) the two professional clubs – Edinburgh Rugby and Glasgow Warriors. There was also, at the time and subsequently, a belief abroad in Scottish Rugby, that such new investment would be on the basis of “minority shareholding”.

Mark Dodson continued to hold firm to the belief, as outlined in Bill Lothian's Edinburgh Evening News article from 2015, to which I referred yesterday, that when it comes to the national sides and the two professional sides, Murrayfield had to have control of “the levers of power.” After the shambles of the short-lived Carruthers buy-out of Edinburgh, it seems clear, nobody is willing to get into bed with the SRU when it comes to running a professional rugby team.

Certainly, in the nearly 18-months since the motion was passed, not a word has entered the public domain about any new investors coming on-board. Some six months after the event, 'The Rucker' column in 'The National' newspaper mentioned, in passing almost, that there had been a couple of nibbles, but, the negotiations had quickly ended, when Murrayfield made it clear, they would retain management control of the pro sides.

So, we can conclude, the professional arm of the SRU continues to be a loss-making concern. Nobody appears willing to invest as minority shareholders, what is the SRU to do?

What they need, is somebody to take-on perhaps the more loss-making side of the professional game – the development side. So, enter Super 6.

The Union is therefore, set upon selling six new franchises, as a means of better preparing their – what I would call Level Three players – for the step-up to Level Two (full-time professionals with Edinburgh and Glasgow) and ultimately Level One professionals (members of the National squad).

These players will be part-time professionals, playing at a level below the PRO14, but higher than the current next level down from the PRO14, the BT Premiership.

Their justification for seeking to establish this new strata of the game is: “The Premiership is not fit for purpose” - a claim made by whom we know not, measured against what we don't know, and whose basis the SRU has yet to explain. Similarly, they have yet to explain, or back-up with hard facts, their assertions that Scottish Rugby has: "The weakest amateur tier of rugby in the UK": and that "We're falling further and further behind".

However, in seeking to establish and fund this new franchised layer, the SRU Board is not courting new money. Certainly, the Board is acting within its remit, in seeking: “third party or parties” willing to invest in its “professional and performance rugby operations.”

BUT, it can be argued, in seeking to have six of its top clubs, or amalgamations of clubs (such as the proposed 'South' franchise) take up franchises, the Board is asking existing stakeholders to invest further in Scottish Rugby, rather than seeking fresh investors.

If you like, the six franchise winners – all of whom are existing SRU stakeholders (shareholders) as recognised clubs – are being invited to buy “preference shares”. The only benefit they will get from this is, they will be assured, they are playing at the highest level of the club game in Scotland.

However, we already know (or the SRU tells us) that nine of the ten clubs who have played in the BT Premiership this season (Marr being the odd club out) have declared an intention to apply for a franchise. These clubs are therefore applying to pay for the privilege of playing at a level at which they currently play, a right they earned by performances on the park, not through having wealthy backers and a healthy bank account.

So, if the SRU has its way – six clubs will be paying to maintain a status which their playing efforts earned them. Is this right? Suppose the SRU Board of 1973-74, (the Commitee, as it then was), the season they broke the mould with official leagues, had thought like that.

The last league table for that season which I could find was in this order:

Hawick

West of Scotland

Edinburgh Wanderers

Gala

Glasgow High School FP

Jordanhill

Boroughmuir

Watsonians

Melrose

Heriot's FP

Langholm

Glasgow Academicals.

Now, if we take Glasgow Hawks as being a combined GHSFP/Glasgow Accies side, 6 of the original 12 clubs are still in the top flight – Hawks, Hawick, Boroughmuir, Watsonians, Melrose and Heriot's; although, it should be pointed-out, all of these clubs, except Heriot's, have spent time outside the top-flight in the intervening 44 years. Ayr would not be there, ditto Currie, or Stirling County, the teams which finished third, second and seventh this season, had they gone with franchises back then.

A closed shop might work in the likes of the PRO14, but, in domestic play, you have to have that element of competitiveness, so, if a club has a one or two bad seasons, they can drop down, regroup and come back.

I would not like to be involved in an SRU franchise which, perhaps, finished bottom in the first two seasons – I don't see much of a future for such an entity.