For sale?
Today's Scotsman reports that the SRU is to look seriously at selling Murrayfield and leasing the stadium back in an attempt to bring down the game's £26 million overdraft.

Chief executive, Gordon McKie, will this week attempt to sell one of the union's professional teams because the SRU can no longer afford to fund three teams. But even if that happens, Mr McKie has admitted that the estimated savings of up to £1.5 million - equivalent to the annual interest currently being paid out to Halifax Bank of Scotland - will come nowhere near addressing the union's growing debt.

The running costs at Murrayfield stadium are believed to be roughly similar, at £6 million per year, to the amount it costs the SRU to run professional rugby - meaning that the stadium could be next to go under the hammer. "It is something we have to look at seriously," Mr McKie said in The Scotsman. "It's possible there would be investors in Scotland, perhaps assurance companies, interested in such a proposal provided we could pay the rent they would ask for, but it would be very complex.

"There are many issues, like the wishes of the debenture holders who helped put this stadium up in the first place, tax issues, the possibility of going down a charitable status road - lots of complexities - and I would not like people to believe we're definitely going to do this. It is merely one item on a list of potential options which will be examined.

"This first year for me [as chief executive] was about getting a grip of the union's finances, finding out what was being spent where and providing reliable cash flows. We have managed that and now know what that looks like and so can project forward with some confidence.

"But even concluding a deal with an investor is not enough to bring down the overdraft significantly and we have to be looking soon at mid-term to long-term savings. Selling off land behind Murrayfield is obviously still an option, but the land we have remains of limited value until we have the flood barrier issue concluded.

"That is frustrating and disappointing. It remains subject to a public inquiry process, begun with the council in March 2005 I am told, and which we have been informed has now been put off until around October."

Of the other options on Mr McKie's list, the idea mooted by Phil Anderton, his predecessor, to sell naming rights to the stadium, could, however, be realised sooner rather than later. The Scotsman understands that both the Royal Bank of Scotland and HBOS are among parties interested in the possibility of their name adorning the stadium.

Mr McKie said: "I cannot comment on who might be interested, but we think there are commercial benefits to be derived from naming rights and it might not only be one sponsor. You could have different names on each of the four stands."

He added: "We aren't saying we have to clear the whole £25 million overdraft overnight, but we pay £1.5 million interest a year and that is simply too much relative to the size of our business so we have to do something to bring that down. A sale and lease-back may be the preferred option, but it may be better to get rid of a third or half of that in bite-size chunks. That is what we have to determine in our

This article was posted on 3-Jul-2006, 06:55 by Hugh Barrow.