A DEAL has been reached between RPS (the association which represents the interests of professional rugby players in Scotland) and Scottish Rugby (the governing body of the game in this country) to introduce salary cuts for the playing staff in response to the financial shock of the coronavirus pandemic. 

Details of the agreement have not been disclosed, but it has been stated that a programme of reimbursement will be instituted for RPS members “should certain revenue streams be achieved over the course of the coming season”, meaning that players will not necessarily end up significantly out of pocket on their current contracts if the recovery from Covid goes well. 

This new deal – which will run for an unspecified period of time – will replace the temporary agreement which was brokered at the start of lockdown. This involved all Scottish Rugby staff earning over £50,000 per annum taking a 10 percent cut, those earning over £75,000 per annum taking a 15 percent cut, those earning over £100,000 per annum taking a 20 percent cut, and those earning over £200,000 per annum taking a 25 percent cut. That arrangement was due to run out today. 

“Scottish Rugby and Rugby Players Scotland (RPS) have now concluded their recent period of negotiation to address the need to reduce operating costs through employee and contracted player salary reductions,” said a joint statement issued on behalf of the two organisations.

"Against the backdrop of the significant economic impact of Covid-19, RPS entered discussions with Scottish Rugby to find a mechanism whereby its members’ salaries would be subject to reduction, but their overall interests were protected.

"Both parties have now reached an agreement which acknowledges the need for sustainability in the sport in Scotland and meets the respective objectives of the business, while minimising financial hardship to RPS members through a programme of reimbursement should certain revenue streams be achieved over the course of the coming season.

"The discussions were conducted in a positive, open and constructive manner and both Scottish Rugby and RPS have agreed the specific financial details will remain confidential, with no further comment being made at this time.” 

Scottish Rugby Chief Executive Mark Dodson announced last month that the organisation was forecasting an £18 million drop in income due to the pandemic and vowed to offset £14 million of that through reducing costs across the business, with the remainder covered by bank borrowings. 

Given that staffing costs accounted for 52 percent of the organisation’s £60 million expenditure last year, and that Dodson also vowed that he wanted to avoid redundancies, it was inevitable that wage cuts would be necessary – however, they will not be enough on their own to balance the books. 

Even if staff costs are cut by 30 percent across the board (which is highly unlikely), that would still only save £9.5 million, leaving Dodson and his executive team to find £4.5 million in savings elsewhere in the business.