The Scotsman reveals

Published Date: 09 June 2011
By DAVID FERGUSON
A NEW power struggle for control of Scottish rugby will rear its head at Murrayfield this morning, with SRU chief executive Gordon McKie expected to launch a fresh battle over governance.
A board meeting has been called at short notice by Scottish Rugby Board chairman Allan Munro, with SRU President Ian McLauchlan breaking his holiday in Islay to attend although, with no agenda produced, only a small number of the 11 board members appeared to know last night what the meeting is about.

It is understood that there is a fear among senior executives at Murrayfield that the union is in danger of returning to the position of six years ago, when elected amateurs held the balance of power, which some quarters fear would undo much of the work put in place since then. The 11 board members include three full-time executives, four non-executive directors, and four elected club representatives.

Pressure has been building on McKie and his finance director Eamon Hegarty inside Murrayfield over concern at the direction of the organisation. The Scotsman has learned that it reached a new level of rancour last Thursday after a second successive stormy board meeting, leading on Friday to a request from a board member for McKie's suspension. This was declined by Munro, in line with the SRU's rules on governance, but he was obliged to look into the matter, which has yet to be resolved.

Last night, McKie refused to comment on why today's board meeting had been called at short notice, or what the agenda would be.

• Storm clouds gather again after troubled times

McKie and Hegarty have faced criticism over recent months with demands inside and outside Murrayfield for greater clarity on future plans for Scottish rugby. A long-awaited new strategic plan has been delayed while further work is carried out.

Sources within Murrayfield confirmed that both McKie and Hegarty have been unhappy at being challenged on a number of issues, which has led to a tense atmosphere between officials and board members.
Munro has been a staunch ally of McKie and Hegarty, having taken up the chairmanship at the same time in 2005 and been heavily involved in their appointments.

However, due to the new system of governance they brought in, he has to stand down after two three-year terms and, in February, the SRU announced the appointment of Sir Moir Lockhead, former chief executive of the FirstGroup transport firm, as his successor

Sir Moir has spent recent months taking soundings across the Scottish game in preparation for taking over this month. He is known to be a strong, down-to-earth, straight-talking businessman, and is close to SRU President and Scottish Rugby Council chairman Ian McLauchlan.
However, there has been speculation in recent weeks that Sir Moir is concerned at some of the unpopular decisions made at Murrayfield – such as no sale of tickets on matchdays – and it is expected he will ruffle feathers when he arrives. 

No board member would speak to The Scotsman on the issue this week, but none denied that there was deep concern over the future of Scottish rugby when he arrives. No board member would speak to The Scotsman on the issue this week, but none denied that there was deep concern over the future of Scottish rugby under the current regime.
One Murrayfield insider, who did not wish to be named, told us: "It has been building for some time.

"There is a hope that the new chairman Sir Moir Lockhead will make a huge difference when he takes over in three weeks' time. He has been taking soundings across the game, and actually getting out there and seeing first-hand what the problems are in Scottish rugby, which is more than some have done.

"But I think the board members themselves realise that they could and maybe should have been stronger before now. They (McKie and Hegarty] have done their bit to help steady the finances, which they were brought in to do but, after six years, the feeling is that they are past their sell-by date and it's time for them to move on and let someone with a better understanding of rugby take over."

McKie was appointed in August, 2005, after a bitter leadership coup within Murrayfield, led by the old general committee of club representatives, which forced the resignations of chairman David Mackay and Phil Anderton, the chief executive. The SRU fell into a void, with clubs, sponsors and the Scottish Government demanding to know where the sport was headed and how the rising debts – the overdraft was more than £20m and debt in total topped £25m – would be brought under control.

A new system of governance was hammered out and McKie suggested as a chief executive by HBoS, the union's bankers. Munro, a former Hibernian FC director and newcomer to rugby, was brought in by then president Andy Irvine to chair the board and McKie taken on as chief executive, who in turn brought with him his fellow accountant and business partner Hegarty. 

The pair had developed a reputation for turning around ailing business, often with ruthless cost-cutting.

None of McKie, Hegarty nor Munro had come from rugby backgrounds but, with no preconceptions nor baggage, that was viewed as a crucial strength at a turbulent time for a sport grappling with the demands of running rugby as a business. Under McKie's stewardship the union has brought the overdraft down to nearly £15m. A £10m loan with HBoS is still due to be paid in full next year.

The turnover has risen to £33m from £28m since 2006, largely through increased competition and broadcast revenues, numbers of youngsters playing rugby leapt and £7.5m more was invested into club, professional and international rugby – nearly £5m to international rugby – in 2010 compared with 2006.

However, marketing and commercial expenditure has been reduced sharply and in closing the Borders' professional team so cutting Scotland's professional player base by a third, the SRU under McKie have found building the rugby side, particularly the crucial middle tier of pro rugby, a whole different matter. Squad sizes have been reduced and big earners have left Scotland, leading to the professional sides experiencing difficult campaigns last season. Only the addition of Italian side Aironi to the Magners League prevented Glasgow finishing bottom of the table, while Edinburgh were in eighth place in the 12-team league.

Both Scottish professional outfits were supposed to have been strengthened when resources were reallocated from the disbanded Borders professional team in 2007, but they are now struggling to compete with their Welsh and Irish rivals and crowds have diminished.

This article was posted on 9-Jun-2011, 05:59 by Hugh Barrow.