McGuigan must act fast to find the magic money tree
SCOTTISH RUGBY LIMITED chairman John McGuigan wants revenues to rise from the record high of £ 68.3 million to £ 100m. I want to win the lottery and the Masters next Sunday. That doesn’t mean it’s going to happen.
All McGuigan has done by going public with his financial demand for his organisation – albeit he hasn’t put a timescale on when the money will have to magically appear by – is to pile pressure on his new chief executive before they have even started.
Mark Dodson, who had been the CEO for 13 years, has left the building for good. His replacement will be named next month and I would guess be paid between £ 325,000 and £ 350,000.
Some may see it as a cute move by McGuigan to unveil his desire to make Scottish Rugby a £ 100m revenue business as whoever the new chief executive officer is will be under no illusions that reaching that figure has to be a priority.
But just how feasible is McGuigan’s aspirational £ 100m business plan? How much financial juice can be squeezed out of Scottish Rugby assets? From all I have heard and researched I am not convinced that magic number will be hit anytime soon.
McGuigan believes the £ 100m revenue stream is needed to give Scottish rugby a chance of winning trophies.
“Where we can have the expectations we all want around winning things – having successful professional teams, supporting women’s rugby, making sure we have the right pathways and best coaches – we’ll need £ 100m to do that,” is his reasoning for setting such a high figure.
Unless tens of millions is spent upgrading Murrayfield to give it more hospitality suites and a hotel – the one at the Millennium Stadium in Cardiff brought in £ 11m over a 12- month period for the Welsh Rugby Union – it is hard to see where the seeds for a magical money tree can be planted.
One thing looks certain is that ticket prices will rise to bring in more cash. Scotland Rugby News have been inundated with complaints from supporters angry that the cost of their tickets for Scotland games at Murrayfield have already gone up due to a new stadium configuration and that was before McGuigan, pictured, announced his £ 100m revenue target.
I wonder how long it will be before prices go up even more and also for matches involving the Scotland women’s team and Edinburgh Rugby and Glasgow Warriors?
Scottish Rugby know they will be walking a tight- rope in these cash strapped times and can’t make the rises too high as they run the risk of losing fans for ever.
A look at the Scottish Rugby annual accounts for 2022/ 2023 – the most up to date – reveal the breakdown of the £ 68.3m revenue stream. Income from ticket sales brought in £ 23.662m. Broadcast revenues stood at £ 15.65m with income from commercial activities, made up of sponsorship agreements and retail sales of goods such as replica strips, bringing in £ 8.605m. Income from the two professional rugby teams, Edinburgh and Glasgow Warriors, brought in £ 10.514m with development income and grants totalling £ 2.221m.
Hospitality and other income totalled £ 7.697m and included the revenue from concerts by Beyonce, Harry Styles and Bruce Springsteen. Taylor Swift is playing three shows at Murrayfield in June which will contribute greatly to Scottish Rugby’s bottom line and shows that Murrayfield remains a venue of choice for major artists touring the UK.
The gold standard for bringing in revenues of the home nations is the English Rugby Football Union. They posted revenues of £ 221.4m for 2022/ 2023 despite three of England’s top tier independently run premiership clubs – Wasps, London Irish and Worcester – falling into bankruptcy.
A figure of £ 70.8m came from hospitality and catering and £ 48.4m from ticket sales. There was £ 40m from broadcast deals, £ 25.9m from sponsorship, £ 11.4m from outside funding agencies, £ 6.7m from the Twickenham hotel and
£ 3.9m from merchandising and licensing England Rugby products. The rest came from other sources.
The RFU have also announced that they will charge a record £ 229 for the best single seat for England against the All Blacks at Twickenham in November with the cheapest being £ 99 for an adult and £ 35 for a child.
During the 2022/ 23 season, the Irish Rugby Union’s annual income – their total earnings after deducting expenses – was € 92.13m (£ 79m). The Welsh Rugby Union recorded revenues of £ 94.3m. The Italian Rugby Federation revenue figures only go up to 2021/ 2022 and stood at £ 45.4m. French Rugby remains in rude health and the year before they hosted the World Cup their operating income totalled € 103.56m.
It is bold for McGuigan to call for a £ 100m revenue stream for Scottish Rugby but there are no plans in place to build a hotel on the Murrayfield footprint and no detailed proposals to upgrade the old stadium which celebrates its 100th anniversary next year.
McGuigan is chairman of Scottish Rugby Limited until May 2026. He needs to get his finger out with redevelopment plans for Murrayfield and find new money- raising initiatives sooner rather than later or a revenue stream of £ 100m won’t come close to being achieved on his watch.