IF you’re frightened to fail, best not bother getting out of bed in the morning. That, in essence, is the message from the two senior figures in the Scottish Rugby Union as they prepare to seek new investment in their two professional teams.
The first obstacle for the SRU’s chief executive Mark Dodson and chief operating officer Dominic McKay, and by no means an insignificant one, is to win the support of members clubs at next Friday’s special general meeting. If that support is not forthcoming, end of story: the governing body will have to continue to fund Glasgow Warriors and Edinburgh Rugby out of its existing revenue.
If approval is given, however, the real challenge will begin: to convince companies, perhaps from as far afield as North America and China, to invest in Scottish rugby below the national level. Most aspects of any deal will be negotiable, most significantly the size of shareholding in either team that a new investor would take, as well as the precise nature of their investment. But a central principle will be inviolate: that whatever deal is struck has to be for the good of the Scottish game, and above all for the national team.
Dodson and McKay are aware that a lot of tortuous negotiations may be required before they can reach a successful conclusion with any potential co-owner of a team. They are aware, too, that there is a degree of scepticism in the game, arising in part from Edinburgh’s previous franchising to businessman Bob Carruthers, about the ability of their organisation to work harmoniously with hard-nosed commercial operations.
But they believe that possible clients are out there, and they are sure that in their two teams they have marketable products that exist within a burgeoning market - the PRO12 league and the two European competitions. And they are confident that the lack of relegation from the PRO12 will be an attractive safety net, particularly for those investors who are most familiar with the model operated in American organisations such as the National Football League.
“What we've got are two teams in a league with scarcity - no promotion or relegation,” Dodson said yesterday. “They have a set place in the firmament there.
“Rugby is a fast-growing global sport, and I think you'll see off the back of the 2015 World Cup viewership on the up, and it's a game that can excite people in different countries more than it has before.
“People are clearly buying franchises like this over the world, whether it's Major League Baseball, Major League Soccer or in the English Premier League football where we have just seen four Midlands clubs go to Chinese buyers. I think it [the lack of relegation] is huge. If you look at the Aviva Premiership, the biggest drawback for owners is relegation.
“Look at London Irish last year and the challenges of a Bristol, who have got a billionaire owner and are now finding it difficult to cope in that league due to the transition [from the second-tier Championship]. Is it logical to invest money in a bottom-four team when there is the jeopardy of relegation? That's why the Americans - the most capitalist country in the world - take a socialist view of these things and make sure there is a fixed ecology for long-term investment.”
McKay added that, while the motion to be put to the special general meeting left it open for a new investor to become a majority shareholder, it was more likely that the union would retain a controlling interest. And, in any event, no matter the percentage owned externally, any agreement with such investors would have to ensure such things as player release for international duty.
“We’ll have a pretty high benchmark on the sort of partners we’re looking for,” McKay said. “Ultimately we’re doing this to protect the international team and make sure that it’s as strong as it can be.
“The intention is for the union to keep a majority position in terms of equity in both teams. If we unearth an investor who wishes to take a majority position then we wouldn’t be blind to that, but the intention is for the union to maintain control and find a partner who comes along for the journey.”
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