Franchise model may get game back on track

Allan Massie

IN THE interview he gave to The Scotsman last week, David Mackay, the Scottish Rugby Union’s former unitary board chairman, suggested that plans to franchise the Edinburgh pro team had been well under way before his removal from office, and that he hoped they would still go ahead. Like many, I would share that hope, while being in the dark as to what sort of franchise is possible or indeed desirable.

Two things seem clear. First, there would have been little prospect of proceeding with any franchising plan if the SRU hadn’t a couple of weeks ago committed itself to supporting the three pro teams for at least three more years - an announcement already rewarded by Chris Cusiter’s decision to sign a new contract with the Borders. Second, it’s extremely unlikely that any individual or group offering for a franchise will do so in the expectation of making a profit.

In this context I’ve been sent an interesting paper. Its author, Keith Wallace, is a director of a multi-national firm of consulting engineers who works in the rail sector and has experience of major franchising projects there. He is a member of Haddington RFC, and, in his early forties, still turns out for the club’s lower teams. So he approaches the question from both a business and a rugby point of view.

Believing that some loosening of central control - he calls it "state control" - of the professional game is desirable, he thinks that "three things are required to improve the game in Scotland". They are "increased investment in the three professional districts; improved links between districts and clubs, to bridge the playing gap and get the clubs and their players/members/supporters to feel part of ‘Their District’; and the facility for all players to play at the highest level possible for them."

His model for franchising is - not surprisingly, given his experience - "that used in the transport industry for bus and rail operation. Here the state subsidises a private sector operator through revenue support for a given period to provide a minimum service. The operator takes over the staff; there is facility for a range of key performance indicators (KPIs)...and the investor can invest beyond the minimum service level with benefits going to him or indeed shared with the state."

The process, he insists, must be kept simple. The ‘state’ (SRU) retains a degree of control, while the investor "has a clear picture of his risks and opportunities".

What control would the SRU require? He has a number of suggestions. The SRU might specify where the teams will play. This seems to me essential, and Mr Wallace agrees that one of Phil Anderton’s mistakes was to suggest, looking at the matter from a purely business perspective, that the franchise-holder might be free to remove the team to wherever he chose.

The SRU might also specify the teams’s playing commitments; how many days a season players would be released for the national squad; the maximum number of games to be played by any individual, and what he calls "a series of performance measures for helping the game in Scotland". Essentially these would be based on what the franchise-holder does to help the club game.

As for the investors, they would be given guarantees specifying the level and duration of subsidy, commitments on league and cup structures and on the allocation of additional revenue (gate-money and prize-money). They would also be granted control of advertising.

All this seems sensible and feasible. Mr Wallace stresses the importance of improving the relationship between the pro teams and the clubs. This brings up thorny questions: the size of the pro-team squad: whether professional players should be allowed to play in club leagues; and the demands made by the pro-teams on the clubs. None of these has been answered satisfactorily in the ten years of professional rugby.

The third question has caused particular irritation this year. As a result of the frequent demands made by Glasgow, Glasgow Hawks have had to postpone several matches and at this late stage of the season have played three fewer league games than their championship rivals Heriot’s. Mr Wallace believes that "because of our small playing base, we need to use the club game to avoid having "professional trainers" and to allow club players to learn from pros and to tilt their lance at them in club games," at the same time allowing club players to "fill in" assisting the pro teams when necessary.

At the very least Mr Wallace’s proposals provide a basis for discussion. Few will disagree with his judgment that some relaxation of central control is desirable or with his argument that improvement in the relationship between the pro teams and the clubs in the BT Premiership is essential.

For what it’s worth, my own guess is that the pro teams need an income of around £2.5million to be viable, and perhaps £3m to be successful. Assuming an SRU subsidy of £1.5m, can the balance be provided by private investors or by the sort of Community Trust being envisaged in the Borders. Or can the pro teams, independently managed, increase their revenue to bridge the gap between what the SRU provides and the total income required?

In this context, it’s worth repeating that the RFU gives each of the Zurich Premiership clubs around £1.8m a year. That puts things in perspective.

This article was posted on 9-Mar-2005, 15:09 by Hugh Barrow.