Scottish Rugby: Tackling the finances

Scottish Rugby: Tackling the finances

As Scotland prepares for the Rugby World Cup, BQ editor Peter Ranscombe meets Mark Dodson, the businessman charged with keeping the show on the road both on and off the field.

It’s not often that the worlds of rugby and music collide. But when Foo Fighters frontman Dave Grohl fell off a stage in Gothenburg on 12 June, one senior figure in the Scottish game was very worried indeed.

“It wasn’t without trauma,” smiles Mark Dodson, chief executive of Scottish Rugby, the national body for the game north of the Border and also the owner of Murrayfield Stadium in Edinburgh, where the Foos had been due to play on 23 June. While fans were clearly concerned about the former Nirvana drummer’s recovery, Dodson had the added worry of what a cancellation instead of a postponement could mean for the financial health of his organisation. The stakes were high.

“I felt sorry for our events team,” he says. “The deal was done commercially and then the execution is all done by our events team. He broke his leg and then we thought ‘This doesn’t look great’. Everything’s been sold, everything’s been done, the date’s been reserved. At first we didn’t know when he’d be back. But we worked really closely with the promoter and got a new date on 8 September for the concert.”

Dodson reels off a list of artists – from teen heartthrobs One Direction through to rockers The Kings of Leon and pop queen Madonna – who have played at Murrayfield since he took over in 2011. Dealing with rock stars is a long way from where Dodson grew up.

Born in 1960, he went to school at Salford Grammar but left after his A-levels and started working on building sites because he didn’t know what he wanted to do. “I was earning a decent amount of money working six-and-a-half days a week, and in those days it was cash-in-hand,” Dodson remembers.

“We’re talking about 1977-78 when work wasn’t plentiful. For me, as a young lad, it was a passport to decent money and gave me time to decide what I wanted to do. I didn’t have a trade so I was a labourer.”

Seeing a job advert for Thomson Regional Newspapers set Dodson on the course that would shape his career. Three years of training with Thomson’s commercial department led to an advertising sales post with Guardian Media Group (GMG) and a 20-year association with the company, which culminated in becoming chief executive of GMG Regional Media in 2005. Dodson led a potential management buyout of the regional business in 2010 but was pipped at the post by a higher bid from rival Trinity Mirror.

After taking time out to consider what he wanted to do next, Dodson was put in touch by a mutual friend with Sir Moir Lockhead. Lockhead had been appointed as chairman of Scottish Rugby in 2011 and one of his first tasks was to find a new chief executive. Dodson had been involved with the sponsorship of Sale Sharks and so Lockhead invited him to apply for the job, which he got.

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“It looks like a big shift from being where I was in the media, but when you actually get here it’s a very similar business in many ways – it’s got an audience, it’s got sales and instead of editorial content you have sports content, which is what happens on the pitch,” Dodson muses. “Things like negotiating TV rights deals and dealing with the press are very familiar. It’s interesting that Ian Ritchie, who is the chief executive in England, has a media background, and Roger Lewis, who is the boss in Wales, also has a media background. So we’re slowly infiltrating the sports world.”

Perhaps the link between newspapers and rugby in Dodson’s life shouldn’t come as such a surprise. His first job was as a paperboy and he played rugby league from the age of eight. He switched to rugby union at secondary school and continued to play a mix of the two until he was 18, when he entered rugby union’s junior leagues in the North-West of England.

Having started off as a seven, he later switched position to inside centre before retiring from the game at the ripe old age of 46. “I finished because either inside centres got bigger or I got slower,” he jokes. “I was never any good though – I was very keen, but this wasn’t a case of a career being spoiled by injury or anything like that.”

As well as being the national body for the sport, Scottish Rugby also owns the franchises for the nation’s two professional club sides, Glasgow Warriors – which became the first Scottish club to win a major trophy during rugby union’s professional era when it lifted the Pro12 championship earlier this year – and Edinburgh Rugby, which reached the final of the European Rugby Challenge Cup last season.

While the business has come on leaps and bounds under Dodson’s tenure – posting record revenues of £44.2m in the year to 31 May and bringing net debt down to under £10m – it’s the performance on the field for which Scottish Rugby is inevitably judged. While the club sides have enjoyed a truly outstanding season, Scotland fared dismally at the Six Nations, losing all five matches. It’s all a very long way from selling newspaper adverts.

“The thing that is unfamiliar is that, instead of measuring your key performance indicators in quarters of half-years, you measure them in 80 minutes on the field, which I find testing at times,” Dodson nods. “In the first two years that I was here, we were making real strides off the pitch but it was completely masked by what was happening on the pitch. If Glasgow failed and Edinburgh got beat and the national side lost the Calcutta Cup then the world was ending – nobody actually saw that the world could have been ending before but the team was winning.

“That’s the important word – it’s all about winning. The perception of our business is changed by what happens on the field, but the rigour and robustness of the business is what happens off the field.”

Fielding players for the world cup in England also poses some interesting financial challenges for the business. Dodson explains that, at the last tournament, Scotland fielded a squad of 31 players, with 15 coming from Scottish clubs, while 16 were exiles playing at clubs in other nations. This time round, following the success of Glasgow, about 25 players will be home-grown and only six will come from elsewhere to take on Scotland’s rivals in its group – Japan, Samoa, South Africa and the US.

“I’ve had to spend an extra £1m to bring in players for the Glasgow and Edinburgh clubs while their players are on international duty,” explains Dodson. “We’ve brought in some players on one-year contracts and extended the contracts of others. After Glasgow winning the Pro12, I couldn’t just turn round to the fans and tell them that we wouldn’t try again this year because we’re concentrating on the world cup.”

Murrayfield03Financially, the sport was also faced with another hit from an unexpected quarter last season, in the form of foreign exchange rates. Prize money for rugby’s European competitions is paid in euros and, with the continuing weakness of the Eurozone economy, Scotland lost out through the relative strength of sterling.

“Sweating the assets” is a phrase that’s seldom far from Dodson’s lips. Murrayfield only hosts around 25 rugby matches each year and so there are a lot of “dark days” when the stadium isn’t being used. As well as attracting musicians like Grohl and his friends to play at the venue, Dodson and his team are also increasing the number of conferences and other events.

“The new Murrayfield opened back in 1995 and people still think it’s an amazing stadium, which it is,” Dodson says. “But it’s 20 years old now and so it’s one of the older stadiums around. Look at places like the Emirates, or Twickenham following its refit for the world cup, or the Millennium Stadium. So we now have to look at what parts of Murrayfield we will need to upgrade to keep up with these other venues.”

Some of the biggest headlines surrounding Dodson’s tenure so far have come from the sale last year of the naming rights of Murrayfield to telecommunications giant BT for a reported £20m, which was hailed as Scotland’s biggest sporting sponsorship deal and also covered domestic league and cup competitions and the Scotland 7s side.

BT’s deal has also led to the creation of a £1.6m club sustainability fund, including the appointment of business development officers to help the clubs find the next generation of talent for the professional teams and the national side.

“Naming the stadium wasn’t the biggest attraction for BT,” Dodson reveals. “BT’s brand awareness is already sky-high, everybody’s heard of them. Instead, they were interested in the story that we told them about developing Scottish rugby and about building for the future.”

That future doesn’t just include the men’s game and children’s rugby but also extends into the women’s arena too. “It’s women who help out at local rugby clubs and it’s mums who take their children to and from rugby training each week,” says Dodson. “Why shouldn’t women have the same chances as men to play the sport and represent their country? I have two daughters and they wouldn’t let me get away with it if we weren’t supporting the women’s game.

“More women are coming to our games too now because we’ve worked hard to create that family atmosphere and to turn the matches into bigger events, with music before and after. Those big posters of the Scotland players with their tops off that we used to advertise the Six Nations – those weren’t for the benefit of the male fans, they were there to suggest to women that they could come along and see these guys in action. And it worked.”

He says that family atmosphere is especially prevalent in Glasgow following the move from the ground at Firhill, which was only attracting around 2,000 fans, to Scotstoun, where the team is regularly drawing in crowds of 7,000 and topped 10,000 spectators for the semi-finals of the Pro12.

With the clubs enjoying greater success, is there an issue with Scottish Rugby acting as both the national body for the sport and also the franchise owner? “If you’ve only got two professional teams and those teams are the gateway to your national squad and you lose control of one or both of those pro teams and it ends disastrously or you can’t control the pathway then the national team will suffer,” Dodson argues.

“Unless we can control both those routes or trust in someone sufficiently to take the burden of one of those away from us then at the moment I don’t think it would be wise to sell off or try to sell off one of the franchises.

“The other thing to remember is that rugby clubs don’t make money. A club is usually a net burden on an individual, a backer or a sponsor or a group of stakeholders because this is not yet a business where transfer fees are going to make you money or the income from television and sponsorship and tickets is at such a level that profits can be made easily. If you’re making a profit from a rugby club then you’re doing extremely well.

“So there’s not a queue of people asking if they can spend £35m or so over five years. But, more importantly, even if there was then I’d have to make sure that those people were in it for the long term and had the best interests of Scottish rugby at heart.”