Scottish rugby's financial reset plan puts jobs at risk as profit bid and Glasgow and Edinburgh impact laid bare

Scottish Rugby has commenced a "financial reset programme" aimed at bringing the sport back to profitability within the next three years.

As a result, the governing body is planning on putting up to 35 jobs at risk across a number of departments, although the playing budget for Glasgow Warriors and Edinburgh Rugby will remain unaltered for next season. The existing chief executive and performance director vacancies will still be filled, but new external recruitment has been paused during the collective consultation process.

Scottish Rugby has reported substantial losses over the past two financial years of £10million in each of its accounts and while the outlook is brighter for the upcoming year, the union wants to be in a position to break even in the 2025/26 accounts before being profitable in 2026/27.

The SRU has set out its map to profitability. | SNS Group / SRU

A statement issued by Scottish Rugby on Wednesday read: "A two-year timetable to reset Scottish Rugby’s financial position has been agreed by both Scottish Rugby Limited and Scottish Rugby Union Boards with implementation planned for the financial year, starting today, 1 July 2024.

"Following a shared objective of addressing costs the new budget approach provides a solid foundation to support future growth and delivery of Scottish Rugby’s 10-year strategy.

"Work undertaken by Scottish Rugby’s Executive reviewed activity delivered across the organisation. This included operational spend, which covers the running of Scottish Rugby activities and programmes, along with its existing salary budget.

"The reset will reduce the extent of expected losses over two financial years, returning Scottish Rugby to a breakeven position from financial year 2025/26.

"A review of headcount in every Scottish Rugby department, in light of the reprioritisation of activities and financial reset, has identified around 35 positions as being potentially removed with a collective consultation due to commence shortly for roles at risk of redundancy. No outcomes have been predetermined and all proposals already shared with our employees are subject to the consultation process.

"Any new external recruitment has been paused during the collective consultation process, with the exception of the CEO and Performance Director roles.

Player recruitment for Edinburgh Rugby and Glasgow Warriors will not be affected. | SNS Group

"Player recruitment for both Edinburgh Rugby and Glasgow Warriors is unaffected for the forthcoming season.

"The organisation’s cash position is forecast to remain strong through the next four-year cycle with the delivery of various commercial initiatives and cost reduction measures providing the necessary headroom to support better financial sustainability.

"The reset plan and accompanying budget were reviewed by independent financial experts and agreed by Scottish Rugby Limited Board on 21 June and the Scottish Rugby Union Board on 27 June.

"Other outcomes put forward through the financial reset may see significant elements of the male and female pathways realigned with the Rugby Development department, providing improved connection between the grassroots game and the two Pro Teams.

"These proposed changes are all subject to the collective consultation and if agreed, will be delivered through a new regional and area model that will better connect the game at all levels.

"Significant funds will be allocated for investment in Scottish Gas Murrayfield over the next two financial years to cover essential remedial and customer improvement works and also to create additional revenue streams through an enhanced hospitality offer."

John McGuigan says that the financial reset is 'critical'. | SNS Group / SRU

Scottish Rugby Limited chairman John McGuigan said: “The financial sustainability of Scottish Rugby is our absolute priority as it enables all the other things we aspire to do to work. We have taken proactive steps to achieve this and the Scottish Rugby Limited Board will continue to keep our financial position at the forefront of its decision-making.

“We tasked our Executive team to reprioritise resources, so we can follow our planned strategy for future investment and growth. This will be challenging in the short-term, but necessary. For our sport and business to grow we have taken the difficult, but we believe the right, and responsible approach to secure the longer-term future of our game. This reset is critical to realise the ambitions we are committed to as part of our strategy.

“It has been an incredibly difficult decision to propose that a number of our people might have to leave the business. I’d like to acknowledge and thank everyone for their contribution to Scottish Rugby to date and reassure those whose roles may be affected that we will manage this process with care and compassion.”

Scottish Rugby Union chairman Professor Lorne Crerar CBE said: “The principal purpose of the SRU Custodian Board is to ensure the health and wellbeing of Scottish Rugby for the current generation and those to follow.

“It is clear that the journey of the operations of Scottish Rugby, as manifested by the £10.5M loss, disclosed in our 2022/23 Annual Accounts, had to fundamentally change course.

“Much work has been done to develop a strategy for the next 10 years which will transform the way the organisation works and ensure Scottish Rugby’s impact on future generations both on and off the pitch. A cornerstone of that strategy is to build a robust financial position upon which to build the future.

“The strategy and aligned budget plans for financial year 2024/25 have been endorsed and supported at the recent SRU Board meeting at which the external advisors were also present to provide support and answer questions in relation to the key components of the budgetary outcomes.

“Although the challenges going forward for Scottish Rugby are significant, we have every confidence in John McGuigan and his colleagues on Scottish Rugby Limited Board to navigate these difficulties grounded upon the new strategy and operational budget for financial year 2024/25 and beyond. The proposed loss of colleagues in this evolving process is deeply upsetting for all involved in Scottish Rugby and underpinning the approach will be principles of fairness and empathy.

“Going forward, progress towards budgeting and strategic objectives will be carefully monitored and regularly reported to the Clubs and stakeholders of Scottish Rugby.”

Scottish Rugby President Colin Rigby added: “In common with others, Scottish Rugby has faced significant financial challenges in recent times. In light of this situation, the Scottish Rugby Limited Board has made the difficult decision to reset our financial approach, fully supported and endorsed by the SRU Board. Our primary goal is to ensure the long-term viability and growth of Scottish Rugby.

“We understand that this process may have implications for some of our colleagues and we are committed to handling this period sensitively and respectfully.

“Our priority remains securing the future of the Scottish Rugby for generations to come, while minimising the impact on our colleagues and key stakeholders."