Murrayfield accounts show rare surplus of £600,000 after turnover rises by £4m

SCOTTISH rugby clubs will be told at Saturday's annual general meeting at Murrayfield Stadium that the sport is in rude health with a financial surplus being posted for the first time under the current management board.

Gordon McKie, the SRU chief executive, reported yesterday that turnover had risen by nearly £4million to over £33.5million, which he stated stemmed largely from Heineken Cup and British and Irish Lions monies, shared out among the participating unions.
When McKie took over at the union's helm in 2005 turnover was falling, debt was rising and he insisted there was no firm grip on where the expenditure was going.
Five years on, he said ahead of the coming agm: "Great results will be announced. Our turnover is up by just under £4million, partly due to Heineken and British Lions, but also other increases we have managed to achieve in what has been a difficult environment.
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"For the first time in a long time Scottish rugby has a surplus to report this weekend, which will create an interesting dimension because we're not in business to make a profit and what we bring in by way of revenue we spend. What we want to do is break even but this year, if you forgive the expression, we couldn't spend it quick enough. Consequently, a small surplus has been achieved of £1.5million pre-interest, £600,000 or so after interest.
"Average debt last year was less than £15million, broadly the same as the previous year, though we have spent close to £1million on capital expenditure in and around Murrayfield – pitch growth heaters, new reception, car parking and tarmac, and on a central warehouse to bring all our kit under one roof for example.
"The year-end debt is slightly up but that's because last year we had the benefit of Heineken Cup ticket monies and we had launched November ticket sales, but we haven't begun to do that because we don't know about the games."
McKie did not detail how turnover has risen by £4million, but that information should come to light at the agm. Ticket sales were actually down this year on 2009, by over £2million, largely because Scotland had one fewer home match in the RBS Six Nations Championship than last year, but that was compensated by broadcasting revenues – notably the share of an improved BBC deal for the Six Nations Championship – rising by more than £3million and 'other operating income' going up by almost £3million.

Included within that latter bracket is income generated by the Heineken Cup final being held at Murrayfield in 2009, an increase in Heineken Cup participation monies and attendances at games involving Glasgow and Edinburgh, and the addition of a share of British and Irish Lions income from last summer's tour of South Africa.
There is little doubt that McKie has brought a vice-like grip to Scottish rugby's finances and has driven the debt down to a manageable level after arriving at a time when figures were causing alarm, but criticism has come from those who believe the books have been managed to the detriment of the standard of the game itself. McKie argues otherwise, as expected, and will use the 2010 accounts on Saturday to explain how his board has increased investment in international and professional rugby (by £1.1million to £16.1million), to community and performance rugby (by £400,000 to nearly £3.9million) and to 'club support and development' (by £460,000 to £1.79million), which means overall expenditure has gone up from £28.67million to £32million.
With a one-off final payment in settlement of the outstanding 20-year lease with the Netherdale Sports Trust factored into the figures, the SRU is left with a pre-tax profit for the year of £1.37million.
On Saturday at Murrayfield, however, McKie knows he can expect clubs to respond by asking for more money to be spent on the grassroots of the game while the professional team coaches continue to push for additional funds to strengthen their playing squads for tougher and longer campaigns in the newly-expanded Magners League.Buy online Six Nations Hospitality Packages with the best prices available! We are covering in Six Nations 2011 Hospitality and Tickets.