THE SCOTSMAN REPORTS

SRU set to withdraw Edinburgh funding
GARETH BLACK
THE Scottish Rugby Union has carried out its threat to cut funding from Edinburgh.

Over the weekend, the union confirmed in writing the message that Edinburgh owner Bob Carruthers had been given verbally on Thursday of last week. A letter to Edinburgh accused the club of a breaking a clause in the contract relating to the management of the team - understood to be a reference to the club's dispute with Scott Murray, the decision to allow Chris Paterson to leave for Gloucester and the impending departure of Marcus Di Rollo - and "accordingly no further monies will be advanced".

Edinburgh have always claimed that it was the union that broke the contract first by failing to pay £186,000 that was due to the club last November, and a court claim against the union has been promised. Carruthers now claims that by failing to pay its debts, the union is "apparently insolvent". The message is clear: if the union makes an attempt to drive the club out of business, Carruthers could try to do the same to the SRU.

The Edinburgh owner has, however, moved quickly to reassure his players that they do not need to worry about their salaries. "We will pay them on time, and the next month after that and the month after that," he said.

But he added: "If the SRU are not paying us the money due, then they remove any obligation on us to do all the things we should be doing in developing players, employing so many current internationals and all that. We will have to cut our cloth according to the funds we have available and let the legal process rumble on. It is barmy, but what choice do we have if the union will not accept any peace offers?" Carruthers estimates that in total the union should make almost £150,000 available to the club today, but he says he is steeled for the money not arriving. "We don't give up without a fight and we only pick the battles we can win," he added.

With a bank debt of about £19million, and little prospect in the near future of repaying it out of any profits - the budget was to break even last season and make only small amounts in future years - the insolvency threat cannot be taken lightly by the SRU, particularly if the total amount Carruthers claims he and the club are owed climbs into seven figures.

Gordon McKie, the union chief executive, has already revealed that the SRU had come close to being declared insolvent by the Bank of Scotland at the time he was appointed two years ago, and with the debt still huge - though better managed - the fundamental problem is still there.

The view within the union headquarters, endorsed last week by both the Scottish Rugby Board - the executive branch of the union - and the Council - the club representatives - is that Carruthers is doing so much damage to the game in Scotland by taking his the dispute into the public domain and by allowing some of the best-known players in Scotland to leave the Edinburgh club that there is no future for their partnership. Carruthers' view is that he is merely standing up for his rights.

The union remains under increasing pressure to get this dispute resolved quickly.

The continuing bad publicity is a major handicap as it tries to sell tickets for next week's World Cup warm-up game against Ireland and the match a fortnight later against South Africa. It could also affect World Cup ticket sales at Murrayfield and may disrupt the international team's preparations for the tournament. In the slightly further distance, there is potential for all sorts of chaos when Edinburgh's competitive season kicks off in little more than seven weeks' time.

Carruthers maintains that if the union continues to put the financial squeeze on him, then he will merely run the side at whatever level he can afford until the legal dispute is over. If that means having to run the club as a development team for two years, he says he is prepared to do that. With only one other professional team remaining in Scotland following the closure of the Borders earlier this year, the development team option would be bad news for all parties.

This article was posted on 31-Jul-2007, 07:08 by Hugh Barrow.