Aristotle Armstrong

Aristotle Armstrong
The thrawn, alternative voice of Scottish Rugby

Saturday, 25 August 2018

I Am Not Alone In Being Worried As To The Possible Costs Of Stupid-6

EARLIER this week, I mentioned being questioned by the parent of a current Scottish internationalist over the potential costs of running a Stupid-6 franchise. I posted my reply, and put costs down at somewhere north of £300,000 per season.

That post generated a lot of heat and light, with Alistair Munro, a Boroughuir member, getting particularly het-up with me. Well Alistair, you should maybe take a Valium, breathe deeply and sit down, because I am returning to the subject.

Alistair Munro - believes my figures are wrong, what will he make of these?

The concerned parent got back to me, and he tells me I have under-estimated my costs by over 100%, and produced figures to back his assessment. Here is what he says:

“The benchmark for player payment has to be the academy/pathway. The £12,000 pa grant that is dished out to stage three players is the floor on payments that any 18 year old is expecting.

“Four years ago I spoke with an (average ability) Premiership player who had been working as a self-employed tradesman; he stated that his expenses from his club for the previous season had meant that he had not needed to work that year, so we can assume they are pretty generous.
 
So let's take an educated stab in the dark and see what our super team is going to cost to run”:


Reason for cost
Actual cost
Notes
Salary of Head Coach
£30,000 per season
Based on advertised posts for a Level 3 coach
Assistant coaches
£45,000 per season
Based on three x Level 2 coaches
Players
£700,000 per season
Based on 35 x £20,000 per season average; paid as “wages”, “grants” or “expenses”
Physiotherapists
£29,000 per season
Based on 2 physios, 11 hours each per week (2 x 3 hours training, plus 5 hours match day) @ £30 per hour
Travel within Scotland
£5,600.00
Based on eight away games @ £700 per time coach hire*
Pitch rental
£2,200.00
Based on 11 home games; -hour hire @ £50 per hour
Total
£811,800.00

SRU contribution
£127,500.00
Towards playing and coaching costs
Sum needed to fund a franchise for a season
£684,300.00


These figures are based on a season lasting 44 weeks (pre-season training plus 2 warm-up games and 20 competitive games).

*It is understood the SRU will pick-up the travel costs incurred in the proposed cross-border competition with the Welsh Premiership clubs.

“There are additional costs to be factored-in. The assumption at the moment appears to be: the franchises will have the use of the “core” club's facilities. However, this is not certain. It appears the Melrose franchise will be based in Edinburgh, at their partner Napier University's campus, adjacent to Edinburgh Academy – Ayr has a similar partnership with the University of the West of Scotland and will have the use of the facilities at their Craigie Campus. These, and similar deals elsewhere will incur additional costs.

Such things as office facilities for the full-time Head Coach and the franchise club's adinistrator have to be included. Then there is the probability – team and kit managers, who may, at the moment work on a voluntary basis can hardly be expected to continue to do this, when others in the off-field team are being paid. These essential bodies may not be demanding huge payments, but. Paid they will have to be.

Add-in such items as playing and training kit, “number ones” for the more-formal occasion and an annual budget of £750,000 per season does not appear to be excessive.

Now when we – the small sub-committee driving the franchise forward - go back to the committee at our parent club we are going to find that it is down to us to find these additional funds.

The existing “core” clubs all want to if not retain their “Premiership” (this season – Championship from 2019-20) status, at least be placed no lower than National League 1 – that argument has already begun.

So, our so called “second XV” is suddenly our first competitor. If we rob the club of all its best players then the club is looking at relegation from the Championship (always assuming they are placed at that level)m or perhaps even from National 1. That's not going to play to well with the larger, amateur club committee and some of the older members.

Another challenge is - the other five franchises also have a player roster to fill, so they are going to be offering club XV players incentives to come and join them. The amateur club will find its player bill has increased. Knock-on effect is that the franchise's player bill is likely to suffer inflation as well.

We can also add in the aspiration that we will be playing at a level above the existing premiership, so we are going to need some of the 90 Academy players, plus probably importing players from the England and the colonies (this is already happening). All of a sudden that player budget looks a little light.

Now, from where is the franchise-driving sub-committee going to find their £750,000? They need to find a few sponsors or preferably a very wealthy rugby fan with a large disposable pot of money, none of whom are currently supporting club rugby. If they fail to do this, they mess things up at the levels below.

Assume that they can find the money and they sort out the home base problems, then who is going to come and watch this new level of rugby? If the franchise side plays at the parent club's ground, the fans are being asked to support the super team and the club team, or in traditional parlance the 1st XV and the 2nd XV, and we all know who they are going to watch. This would mean that the club team (2nd XV) with their increased player wage bill would now have a huge hole in their match day takings.

 Ayr's supposed new Dam Park home,before they start developing it

Could the franchises get a little closer to where the public are? Ayr are already planning to do this, by moving into the town centre from Alloway – however, a good number of Millbrae regulars already live in Alloway – it is difficult to see where some of the franchises could build a new fan base.

There are even suggestions, Melrose, if they base their franchise in Edinburgh, could end-up playing there - which will mean four teams fighting over the scraps of the red trousered rugby fans.

Let us pause for reflection here, and have a look at the monster we have lying before us, before we pull the switch and give life to our creation:

  1. Super 6 is a new layer that will fit between the pro teams and the premiership

  2. The pro teams are only just getting established as viable entities (Glasgow sells out, Edinburgh still has a way to go)

  3. The existing premiership teams are all sailing pretty close to the wind financially, most only lodge abbreviated accounts, but the balance sheets do not show healthy reserves

  4. Super 6 will weaken the premiership squads, although it may not be even across the country

  5. We need over 200 "new" players to fill the super 6 squads, which will fuel wage inflation

  6. Super 6 teams will have to find a new audience, or they will cannabilise their club's supporters and threaten the viablity of the club.

You might be forgiven for thinking that those oilmen in Aberdeen are cannier than you gave them credit for when they chose to pass on this exciting opportunity.”

That's what my concerned parent came-up with, and he knows his way around balance sheets and costings far-better than I, an admitted numpty when it comes to financial matters ever could.

But, there are other implications – the demand for a 3G pitch has not gone away, it may have been kicked into the long grass due to sportscotland's current penury and inability to fund such facilities – but, it has not been permanently dropped.

That's another one-off bill of up to £750,000 to probably be met, somewhere down the line.

Do the lucky half dozen Chosen Ones – and their wider club memberships, still think these franchises are a good idea?

And that is rapidly getting towards the £1 million question.

When I posted my original thoughts on these costs, as I said above, Alistair Munro jumped-in to accuse me of: "talking shite." Fair enough Alistair, you are welcome to your opinion, just as my concerned parent, quoted here, and I myself are free to voice our opinions.

The thing is, when it comes to Stupid-6 costs, as I have frequently said: "nobody knows." Everyone, from The Fat Controller down, is making it up as they go along - which is hardly good commercial practise.

Alistair Munro might be right, and I am over-estimating the costs. The player's parent might be wrong and I am under-estimating. He might be wrong in his figures. But, a good rule of thumb, and not just in house-building, is frequently voiced by Kevin McCloud in that excellent Channel 4 programme 'Grand Designs.'

 When it comes to grand designs - heed ye the words of Kevin McCloud

Kevin says: "When you set-out to realise your Grand Design, it is always safe to reckon it will take twice as long, and cost twice as much as you initially planned for>"

Might that rule also hold good for the SRU's grand design for Super-6?

11 comments:

  1. I actually only agreed with your own statement about you “talking shite” and being a “fanny” but why let the truth get in the way of a good story. I was nothing to do with the Boroughmuir bid in fact my stated preferences was for all to no bid to the RFP from the SRU.

    As for Valium no need as was you say is so far from reality my blood pressure probably dropped after I stopped laughing. All Super 6 franchise bidders submitted detailed financials which clearly neither you nor the concerned parent have access to so continue with your fantasy posts as long a small you wish. Until you access some facts then they will be your opinion and you have the right to blog as you see fit. Blog away.

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    1. Ok wise guy! Please leave our much-loved poor wee defenceless shrinking Cumnock violet "Aristotle Nae Bottle" alone.

      The soft and cuddly AA may sometimes take to spouting shite and be a self-confessed fanny, but he has a great heart in the right place, and as most of us know, these aforementioned features can, when occasion demands, prove to be most useful.

      More to the point - as a clearly knowledgeable, erudite and informed life member of Boroughmuir Rugby & Community Sports Club, please throw us some relevant detail about current condition of the charity / wholly-owned trading subsidiary company's overall finances (from publicly-available records apparently insolvent / illiquid as recently as 2016, a going concern courtesy only of a couple of major loans) as a suitable platform for taking on the massive risk and uncertainty of a S6 franchise. Clearly, the position may well have been radically transformed since then, and it would indeed be reassuring to learn from the horse's mouth (assuming you will answer to such a description) that everything in the Meggetland garden - if not the whole S6 shebang - is rosy.

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  2. Thanks Alistair. Keep reading. At least, you appreciate opinion is free, and, I acknowledge, I may well be talking shite.

    Sorry about wrongly crediting you with a part in the 'Muir bid; but, several other people have aligned you with this, happy to correct my mistake.

    I take it you remain a Boroughmuir fan, possibly a member, however.

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  3. There is much misinformation about the costs of S6. All we know is the funds that the SRU are providing - we have no idea what the franchises committed to spend or how they intend to fund that.

    My calculations suggested a player wage bill of £340K. Thats 10 players on £12K, 10 players on £10 and 15 on £8K - crude but I thought illustrative.

    That level of salary costs have been poo pooed by the SRU. We dont know what contribution the S6 side will make -if any - to the five academy players they will have. There is a suggestion that fringe pros will be in the squad again no word on how this will be paid for. The SRU have floated an average salary of £3.5K - so forty weeks, 10 hours training and playing a week at £7.83 min wage gets us to £3.2K. Now who would play rugby for minimum wage??

    The thing is in any other franchise field - say setting up a Costa or a MacDonalds - its pretty clear what cash you need to set up and fund the operation. You also have an idea of what your likely income will be. Not so much with S6 though.

    And thats before we get to any of the other points you raise like support staff costs, ground costs, kit costs

    The issue is we arent talking about a commercial enterprise. We are talking about the SRU underwriting a franchise set up - using money that could be used to support club rugby. Hopefully Mr Grassies commitment to transparency stretches beyond Russellgate

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  4. Just for accuracy since you clearly have no idea I am a life member of Boroughmuir and through my company PROJECX are one of the founding sponsors of the Boroughmuir Academy structure with a 7 year financial committment to grass roots club youth rugby. I am also the founder of Waterboys Rugby which is a privately funded touring side not aligned to any club or the SRU offering scottish players the opportunity to play in top quality international 7s and 10s tournaments.

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    1. Again Alistair, thank you for the clarification as to your standing. I admire and applaud your commitment to the Boroughmuir youth set-up, you certainly got some good pay-back alst season, and, let's hope this continues. Sadly, some club officials are not quite so-keen on your Waterboys organisation - when they lose players who go off to one of the internaitonal tournaments, but, hey, that's Scotland for you - we are still a wee bit clannish.

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    2. I am well aware of many club officials opinions and as Waterboys Rugby we have tried to engage with clubs who take a reasonable and balanced position. Clubs should consider the players interests as well as their own and if the player is not required or there is not a playing weekend why should the player not have the right to be selected for the experience of playing international 7s and 10s rugby. Waterboys Rugby has shown that the BT Premiership was "fit for (a) purpose" by winning multiple international tournaments with or without various club officials blessing.

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    3. Your not even the best invitation team in scotland

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  5. oh and seeing the rugby seaosn has commenced - last week in West and all over this weekend it is instructive to see the games already called off

    Last weekend one Shield match was forfeited due to no team

    This weekend - 2 national cup games and four shield matches gone

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  6. Oops just seen another three Bowl matches off

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    1. And that, in essence, is where the problem lies, Clubfan!

      While grassroots club rugby is left to wither & die, the talking heads are preferring to dance on the head of a "performance" pin.....

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