RUGBY'S REALITY CHECK! TIME TO TAKE STOCK - A guest Post

WHAT follows is a piece which that weel-kent refugee from Fife to Galashiels, Ron Sutherland, posted on his Facebook and Linkedin pages this morning. Having read it, I thought Ron's views deserved a wider audience.

Ron Sutherland

Ron wrote:

“Reality is beginning to bite in rugby, the immediate prospects in these pandemic shutdown-troubled times ever more bleak, both on and off the field of play.

The USA national Union has become bankrupt, and with 75% of its staff laid off and open warfare being waged along its corridors of power, Rugby Australia teeters on the financial brink – probably unable to afford a November tour. In the ongoing absence of commercial activity, zero TV revenues and sponsorship budgets now disappearing like snow off a dyke, clubs and Unions at all levels everywhere are desperately seeking ways of avoiding the prospect of insolvency, cutting wage bills, while players and their representatives have been threatening legal action in response.

Meanwhile, at Murrayfield the show goes on. While many in rugby are giving up a proportion of their income and some are even losing their jobs, Scottish Rugby's top brass are uniquely offering just to defer some of their extraordinary megabucks for a few short months! Back in the real world, many observers have noted that the SRU's recently-trumpeted emergency relief fund intended to provide financial support across a membership in excess of 250 clubs amounts only to some 50% of their CEO's most recent annual take-home remuneration.

Only time will tell how prudent, relevant and indeed sustainable has been the recent controversial introduction of a new SRU-backed semi-professional elite development league with 6 franchises awarded in an apparently random manner. Unsuccessful bidders for these franchises must be breathing huge sighs of financial relief right now, while their "successful" cost-burdened counterparts attempt to grapple with financial management problems likely to place both their "Super 6" vehicles and host / core clubs in serious difficulty.

However, Super 6 franchisees' operational and fixed cost problems may pale in comparison with those of Scottish Rugby itself, now seriously exposed to crippling costs of its structural model. Not even Murrayfield's media spin merchants and the most (outwardly) bullish senior executive employees of SRU's Member Clubs can be comfortable when contemplating the size of the big black financial hole represented by their two wholly-owned professional teams!

More widely, many clubs of differing types, at all levels (and more than a few National Unions across the world of rugby) have for some time been running unrealistically ambitious, unsustainable operations. Despite good corporate and commercial connections, the sport is demonstrably fragile and has tended to perch on the financial brink as it has evolved in the professional era.

The current Covid 19-created crisis is liable to continue for several months. It signals a time for change, better management, new approaches, new structures, new strategies and fresh visions. It could be transformational!”

Ron, as ever, writes a lot of sense. The current pandemic will indeed lead to huge changes, that much is obvious. We do not know just how much things will change when the All Clear as it were sounds and we start to get back to normality. Only, the new normality will be nothing like the old one.

I was speaking to a BTM insider this week, and he reckons the smaller clubs – at Regional level, will survive this well. They don't have huge staff costs, operating via voluntary bar rotas etc. The clubs which will feel the pinch will be those who have employees – bar stewards, development officers etc. These clubs will face problems.

Also, we have no notion how the recovery process will affect business in general. Businesses will have to draw-in their horns, so their ability to sponsor rugby clubs etc will be hit – with the knock-on effect on the game.

Ron in his piece, mentioned potential financial problems for the S6 clubs. I feel, however, since they were doing the SRU a favour by taking-on the franchises, which were a cost-saving exercise, since the SRU could not afford to fully-fund a player development “bridge” between the club and performance game – then the SRU has a duty of care towards these six clubs.

I fear one or two will be in more bother than others, but, I believe the SRU will prop them up. What we might see is a cull of the full-time professionals, with some being down-graded to partnership contracts between an S6 club and one or other of the pro sides.

What I can also see is a reduction in the number of National Leagues from the current four (Premiership plus three National leagues) to two. The SRU will also, I feel certain, make greater efforts to force through “strictly-amateur” rules for the club leagues – but, clubs who want to pay players will still, I am certain, find ways to circumvent these.

I just hope CVC, for all the potential problems of ceding any sort of control, even a minority interest to a hedge fund, doesn't withdraw completely from rugby, or we are in deep shit.

And finally, I repeat, the refusal of TCD and The Junta to take the sort of pay cuts being accepted elsewhere simply, to me, proves, we are being run by erseholes.