SRU cancels strip launch as £4m deal with Canterbury Europe 'terminated'

Published on Monday 13 July 2009 22:46

THE SCOTTISH Rugby Union has cancelled today's launch of a new kit for the national side after partners Canterbury Europe went into administration just a year after agreeing a sponsorship deal worth up to £4 million that was to last until 2011.

The demise of Canterbury Europe is a major blow for the SRU, and comes just a week after the national football team's kit sponsor, Diadora, appointed a receiver with 12 months outstanding on a sponsorship deal with the Scottish Football Association.

Media outlets had been invited to Troon beach this morning, where Glasgow and Scotland players Thom and Max Evans – Canterbury Europe is also kit sponsors of the Glasgow Warriors professional team – were scheduled to model the new 'change' Scotland jersey to be worn for the first time during the Bank of Scotland Corporate autumn internationals later this year. But last night the SRU said the event had been "rescheduled" and a new date would be announced "in due course".

A spokesman for the SRU conceded that news of the kit manufacturer's demise had come as a surprise, but stressed that the governing body will not panic. "We now have a well-established and balanced portfolio of sponsorship partners, so we don't envisage this being as problematic as it might have been a couple of years back," he said.

An official statement from Murrayfield said: "Scottish Rugby today confirmed that it was concerned to hear that Canterbury Europe has been placed under administration, as Canterbury Europe is the kit partner to the Scotland international teams and Glasgow Warriors. Scottish Rugby has endeavoured to make contact with the administrators, KPMG, to clarify the position. It would be inappropriate to make any further comment at this time."

With the rest of the Canterbury Group – including the global Canterbury brand founded in New Zealand – not affected by the administration and continuing to trade as usual, the SRU hopes that the sponsorship deal – described by the union last year as "the largest commercial deal (the SRU] has secured" – can be salvaged. However, a statement from administrator KPMG painted a bleak outlook.

"All sponsorship contracts in Canterbury Europe Limited have been terminated as a result of the administration, and the affected clubs will rank as unsecured creditors in relation to any amounts they were owed for the remainder of the contract," it said.

Watsonians and Melrose, along with several clubs in the lower divisions of Scottish domestic rugby, will also be monitoring the situation closely. However, pain is likely to be felt more acutely at the elite level, where team branding and sponsorship is a key component of any club's business model. Heineken Cup champions Leinster, London Wasps and Cardiff Blues could all potentially be looking for new kit sponsors before the start of next season.

Canterbury Europe's demise also comes as a blow to Motherwell Football Club, who unveiled a four-year contract with Canterbury in February, worth an estimated 100,000 a season, which was due to begin at the start of the 2009-10 season.

The firm, which is the European trading arm of the Canterbury Group, employs a total of 86 people, 72 of whom were made redundant following the administration.

"This administration has been the culmination of difficult trading, following a period in which Canterbury Europe had unsuccessfully tried to expand into new areas," said David Costley-Wood, a partner at KPMG.