THE SCOTSMAN REPORTS
DAVID FERGUSON
THE SCOTTISH Rugby Union yesterday issued a plea to clubs across the country to work with the union to help the sport recover from an almost ruinous few years. A leading club official further warned that if the union's new plans to regenerate rugby as a community sport were left on the shelf, many Scottish clubs would close their doors for the last time.

The comments came at the end of the SRU's financial general meeting. For the first time, the union divorced the financial business from the AGM and called club delegates to Murrayfield for a separate meeting, in an effort to make clear how serious Scottish rugby's finances had become in the past 18 months.

Eamon Hegarty, the finance director hired by the new executive board last year, explained how the SRU had lost nearly £20million since 1997 and, more recently, watched the debt rocket from £10million in 2002 to £23 million this year - costing the game £1.5 million a year purely in interest. Hegarty's presentation was brief, at ten minutes, but to the point. He did not revisit the spending decisions of the past decade, but made it clear he was shocked by the SRU's "out-of-date" financial system and, as a result, had spent the past year overhauling the structures.

There was again mention made of a maze of finance records, poor budget- setting and inadequate reporting by management heads who "did not have proper knowledge or understanding of their budget". All major items of expenditure have since been reviewed, he stated, from travel and accommodation to telephones, printing, banqueting and retail.

"The Murrayfield Experience", a hospitality operation brought within the SRU last year, has been franchised out after it was discovered it had cost the union over £2 million. When added to over £1 million in redundancy costs over the last two years - the bulk going to Phil Anderton, the former chief executive, and Matt Williams, the ex-national coach - and the £127,000 cost of the Genesis strategic review, it becomes clear why even with the new board's cost-cutting the union still lost £432,000 last year.

Hegarty insisted that only a property-related sale or new debenture scheme would seriously bring down the debt pile, but, before Gordon McKie, the SRU chief executive, pleaded to club delegates: "Can you help us because we will help you? This debt is not just going to go away."

Andy Irvine, the SRU president, is in Australia with his seriously-ill brother, but Allan Munro, the executive chairman, spoke and reiterated how the board was determined to stem losses and would have scrapped a professional team had the Carruthers brothers not taken over Edinburgh. The target for the forthcoming year was to break even, he said.

There were just 77 club representatives at the meeting - 102, one-third of the SRU membership, was needed to form a quorum, so full ratification of the finances will not occur until June's AGM, but Munro took this as a sign clubs were happy with the union's progress. Jed-Forest rep Jim Thomson questioned the accountability of the union's auditors, Pricewaterhouse Coopers. Hegarty replied that their remit covered only the facts and figures presented and not the union's labyrinthine structures. Munro added that a new non-executive director is to be appointed this week who would chair the audit committee.

The club delegates then listened to presentations from Colin Thomson, the union's head of community rugby, and Nick Rennie, SRU partnership manager, who explained the new plans to tackle the problem widely accepted as the most debilitating in Scottish rugby - the declining number of players. Within these are targets to lift playing numbers from 9,400 to nearly 12,000 and help fund as many as 60 new club development officers.

Jimmy Doyle, the Melrose president, insisted: "Clubs have to listen because if we don't work with the SRU and form these partnerships some will fold."

And now for a slightly diiferent view

THE HERALD REPORTS

Crisis days over, says rugby chief

KEVIN FERRIE, Chief Rugby Writer August 28 2006

Failure to achieve the quorum necessary to approve the SRU's finances merely indicates that the days of crisis are over according to its chairman.
Allan Munro is disappointed only 77 club representatives – as opposed to the required 102 – attended Murrayfield yesterday for the organisation's first ever financial general meeting held separately from the annual general meeting.
That was down to three factors: the difficulty of preparing a report and account ahead of the June AGM; the new management's problems in gathering nine accounting ledgers into one; and determination to ensure there was time to outline the extent of the problems they had inherited.
Munro accepted that it was possible to view the low attendance as indicating disaffection among clubs, but said: "It could be argued that people are comfortable with what the new regime is doing so did not feel the need to attend."
"It would have been good to be able to have the accounts approved and to take a vote on reappointing the auditors, but I'm not really bothered that we could not do that at this stage."
Both votes will now take place at next year's AGM, while to encourage better attendance the plan is to hold the 2007 financial general meeting on August 25, the same day as Scotland play a World Cup warm-up at Murrayfield.
Munro also told the meeting that from among a high calibre list of applications they were on the point of filling the vacancy for a non-executive director of the SRU who would take over the chairmanship of their audit committee.
That individual is likely to be asked to investigate the performance of current auditors PricewaterhouseCoopers as the SRU has plunged into £23m debt. Eamon Hegarty, the director of finance appointed a year ago, said that while auditors have no responsibilities for reviewing processes, "it is something we may well be looking at".
Munro confirmed that chairmen for boards managing the Reivers and Warriors will be appointed very shortly.
Last year's loss was around £400,000, as against the previous year's £2.2m, but Gordon McKie, the chief executive, admitted that was partly down to greater revenues than expected coming from last year's British & Irish Lions tour and as a result of Scotland's improved Six Nations Championship performance.

This article was originally posted on 28-Aug-2006, 07:07 by Hugh Barrow.
Last updated by Hugh Barrow on 28-Aug-2006, 07:10.