How the Pro14 CVC deal became a ‘game changer’ for Scottish rugby

Cash pumped into the Pro14 from private equity firm CVC helped the Scottish Rugby Union stave off redundancies during the coronavirus pandemic but the governing body is not out of the woods yet.

Scottish Rugby Union chief executive Mark Dodson. Picture: Graham Stuart/Press Association

Mark Dodson, the SRU chief executive, warned that the ongoing effects of Covid, particularly the absence of spectators from next year’s Six Nations, could result in the loss of £18 million to the business by May 2021.

The figure would rise as high as £30m if fans continue to be locked out until the end of next year, a period that would encompass the 2021 autumn Tests.

Dodson revealed the figures during the second part of the SRU’s annual general meeting which was held via a video link.

The first chunk of CVC money into the Murrayfield coffers - around £8.38m - allowed the SRU to cover an operating loss of £5.27m for the 2019-20 financial year. The effects of the virus last season meant turnover was £55.5m, down from the £61m in the previous season.

Scottish Rugby’s share of CVC’s investment in Pro14 enabled the union to record a surplus before interest and tax of just over £3m for the 2019-20 season. It also allowed the SRU to secure new credit facilities through to 2022.

The CVC deal, announced in May this year, saw the private equity firm acquire a 28 per cent share of Pro14 Rugby from Celtic Rugby. The unions retain a 72 per cent majority share.

Dodson said the CVC money was “a game changer”.

“I wouldn’t say it was the golden ticket,” said the chief executive. “[But] it’s been hugely useful in allowing us to develop a credit facility with our bank which will take us through to 2022 and that’s really important given the shock our business has had.”

Scottish Rugby employs 450 staff, 158 of whom are players. Many employees were furloughed and the top earners took significant pay cuts, after initially only taking wage deferrals. Unlike some of the other home unions, there have been no redundancies and Dodson admitted the CVC money had been hugely helpful in that respect.

“I don’t know what it would have been like to find a financial solution to this without that cash,” he said.

Dodson said he saw “green shoots” of recovery for the sport, particularly with the news that Twickenham would be allowed to house 2000 supporters for the Autumn Nations Cup final on 6 December.

The SRU’s full accounts for the 2019-20 financial year have still not been released and are awaiting sign-off from auditors.

Also at the agm, a motion from Glasgow Hawks, seconded by Grangemouth, calling for more openness and transparency within the SRU was approved by 157 votes to 16. A motion from Currie Chieftains, seconded by Glasgow Accies, to amend byelaws to “reset the balance” in allowing the Scottish Rugby Council to oversee and review the management of the union, was passed by 157 votes to 16.

But Biggar’s appeal over the voiding of their National League Division 1 title win was defeated. The motion, supported by Dalkeith, fell with 90 votes against to 78 for.

It means Biggar will not be promoted to the Premiership. Both Biggar and Dalkeith had already won their respective leagues when the 2020-21 season was declared null and void.

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