THE SCOTSMAN REPORTS
DAVID FERGUSON
([email protected])
GORDON McKie, the chief executive of the Scottish Rugby Union, admits that the closure of the Borders and reclaiming control of the Edinburgh professional teams will force more cost-cutting and delaying of SRU initiatives this year.

McKie,, revealed this position at the annual financial meeting, which he shifted last year away from the annual general meeting to its own August date.

Iframes/JavaScript Tags: The lack of interest in such a gathering was clear in the fact that the accounts could not be officially approved and passed on Saturday because there were not enough Scottish club representatives, for the second year in succession, to create a quorum at the meeting.

Despite efforts to persuade clubs to send people to the meeting with the help of free tickets for Saturday's Test match, less than half of Scotland's clubs showed up, leaving the meeting nine bodies short of the figure required to approve the accounts. They will now go to next year's AGM for approval.

There were very few questions for McKie, or his finance director Eamon Hegarty, who presented a report showing the reduction in the bank debt to £18m.

However, McKie was asked how he would cope with the losses sustained in getting rid of the Borders and Edinburgh Rugby Ltd, and whether he would invite private investment in pro rugby again. He replied: "There will be no cost implication for clubs. We are completely committed to doing what we have said we will do with community rugby. We will have to tighten the purse and delay initiatives, however, which don't impact on the clubs.

"If anyone wants to put money into a professional team we will look at it, but you are talking about a £2m-£3m investment, and there are not many people around wiling to give away that money."

He would not say what initiatives might be cut or delayed, but, clearly, clubs were happy simply to hear that the promised increased investment in the grassroots of the game would not be affected.

Jock Millican of Heriot's did ask why the local-level boards McKie had announced setting up last year at Glasgow and Edinburgh, and which clubs hoped might provide a long-awaited link between the club and pro games, were still not operating.

McKie's answer was poor, but amounted to the fact that the idea had fallen by the wayside though he hoped volunteers would help the chief executives now appointed at each team.

Hegarty had earlier warned that the lowering of the debt to £18m last year was likely to be temporary due to the decisions to close the Border Reivers and reclaim control of Edinburgh, but, again, judging by the lack of questions - other than one asking for a breakdown of how money is spent in the club game - there seemed to be little concern among clubs at this prospect. Afterwards, Hegarty told The Scotsman that the reason the £8m the SRU agreed to hand over to Carruthers' consortium for the next five years had not appeared in the accounts was because they were signed off before the Edinburgh deal was terminated.

That figure will not appear next year either, because the SRU agreed a pay-off to Carruthers, which encouraged the investors to walk away before the SRU were challenged in court.

However, Hegarty did state that the pay-off figure - understood to be £760,000 plus legal costs - would be shown in the 2007-08 accounts, as would the loss that was made on the IRB World Sevens Series leg held at Murrayfield in June.

The finance director accepted that a significant amount of the £1.8m set aside to deal with the end of the Border Reivers would have to be paid, but he hoped to reach a settlement with Gala RFC to severely reduce the costs of maintaining Netherdale.

The club representatives appeared to leave happy that Scottish rugby is back on a steady financial footing, but many questions remained unasked therefore so unanswered over exactly how much it will cost to run two professional rugby teams - an issue that will continue to impact on every level of Scottish rugby.

This article was posted on 27-Aug-2007, 07:30 by Hugh Barrow.