Around 200 of the most committed rugby club members in the country will take time out tonight from their Christmas preparations to attend the third and final part of the SRU’s 2020 AGM via video conference.
Normally, the meeting will take place at the President’s Suite in Murrayfield on a Sunday morning in mid-August, but that did not happen because of social distance and travel constraints caused by Covid, so the meeting was originally divided into two sections until audit problems caused it to end up as a trilogy.
The meeting today will concentrate primarily on the late audited financial statements through May 31. Since the annual report was distributed on Dec. 14, delegates had eight days to digest the details and ask some questions.
The fact that the auditors were only able to certify the willingness of the company to survive as a continuing concern for the next 12 months after a £ 15 million grant and a £ 5 million soft loan were granted last week by the Scottish government indicates how precarious the situation is.
Last year saw an operational deficit of GBP 5.3 million – and that was only Covid’s two months – and with the first half of the season, including the autumn exams, being played behind closed doors and no reasonable prospect of substantial ticket sales in the immediate future, we know that the current financial year will be much harder.
Inevitably, clubs will be keen on having a rundown on how Holyrood’s £ 20 million will be allocated across all levels of the game. In soccer, this information was made available within the days following the announcement of the grants and loans.
Clubs would usually like to be told that the survival strategy of Scottish Rugby provides worthwhile financial support for grassroots football.
The question of whether, under the current model, professional soccer would remain viable in this country could also arise, as could the question of how much emphasis the Scottish Rugby Board places on being able to sell part of the Six Nations as a panacea for all its problems to private equity.
Scottish Rugby has taken out £ 20 million in bank loans since the end of the year, in addition to the government’s £ 20 million bailout, and received another £ 9.4 million from the sale of a share in Guinness PRO14 to CVC (in addition to the £ 8.4 million it received in May).
That’s a lot of cash being poured into keeping the company going, which for years to come will have long-term consequences for the sport as a whole, so clubs will want to know if anything is being done on the expense side to balance the books.
After the second part of the AGM, Chief Executive Mark Dodson said that the £ 14 million in savings he had expected at the beginning of the pandemic had been achieved, but the annual report barely mentions that.
From day one, Dodson has said that no layoffs will occur, but is that still the case?
The format of the meeting is not conducive to open debate, but at the moment there is quite a bit of unrest in the club game over how things have been done in the recent past, as seen at the second AGM when two motions were passed by a landslide majority to increase openness and accountability.
As always with annual reports, there have been a lot of optimistic comments, but some genuine transparency can go a long way when the situation is as bad as it is in this case. The clubs and the union inevitably need to come together, but the board needs to convince its members that it has chosen the best course through this crisis in order to do so.