Scottish Rugby said a two-year timetable to “reset” its financial position has been agreed by the boards of both Scottish Rugby Limited and the Scottish Rugby Union.
A review of headcount in every Scottish Rugby department “has identified around 35 positions as being potentially removed with a collective consultation due to commence shortly for roles at risk of redundancy,” said Scottish Rugby.
Player recruitment for Edinburgh Rugby and Glasgow Warriors is unaffected for the forthcoming season.
External recruitment has been paused with the exception of the CEO and Performance Director roles.
Scottish Rugby Union group revenues hit a record £67.8 million for 2022/23.
However, Scottish Rugy said it made a loss for the 12 months to May 2024 of £6.7 million, an improvement from the £10.5 million loss for 2022/23.
For the 13-month 2023/24 year, Scottish Rugby made a loss of around £10.6 million.
“A significantly reduced loss, projected to be around £3.1m in the 2024/25 financial year is expected to be followed by a breakeven position in financial year 2025/26 and a return to profit in the following year,” said Scottish Rugby.
“At the end of financial year 2026/27, cash reserves are forecast to be consistent with the current position.”
Scottish Rugby added: “The organisation’s cash position is forecast to remain strong through the next four-year cycle with the delivery of various commercial initiatives and cost reduction measures providing the necessary headroom to support better financial sustainability.
“The reset plan and accompanying budget were reviewed by independent financial experts and agreed by Scottish Rugby Limited Board on 21 June and the Scottish Rugby Union Board on 27 June.
“Other outcomes put forward through the financial reset may see significant elements of the male and female pathways realigned with the Rugby Development department, providing improved connection between the grassroots game and the two Pro Teams.
“These proposed changes are all subject to the collective consultation and if agreed, will be delivered through a new regional and area model that will better connect the game at all levels.
“Significant funds will be allocated for investment in Scottish Gas Murrayfield over the next two financial years to cover essential remedial and customer improvement works and also to create additional revenue streams through an enhanced hospitality offer.”
Scottish Rugby Limited chair John McGuigan said: “The financial sustainability of Scottish Rugby is our absolute priority as it enables all the other things we aspire to do to work. We have taken proactive steps to achieve this and the Scottish Rugby Limited Board will continue to keep our financial position at the forefront of its decision-making.
“We tasked our executive team to reprioritise resources, so we can follow our planned strategy for future investment and growth. This will be challenging in the short-term, but necessary.
“For our sport and business to grow we have taken the difficult, but we believe the right, and responsible approach to secure the longer-term future of our game. This reset is critical to realise the ambitions we are committed to as part of our strategy.
“It has been an incredibly difficult decision to propose that a number of our people might have to leave the business. I’d like to acknowledge and thank everyone for their contribution to Scottish Rugby to date and reassure those whose roles may be affected that we will manage this process with care and compassion.”
Scottish Rugby Union chair Lorne Crerar said: “The principal purpose of the SRU Custodian Board is to ensure the health and wellbeing of Scottish Rugby for the current generation and those to follow.
“It is clear that the journey of the operations of Scottish Rugby, as manifested by the £10.5M loss, disclosed in our 2022/23 Annual Accounts, had to fundamentally change course.
“Much work has been done to develop a strategy for the next 10 years which will transform the way the organisation works and ensure Scottish Rugby’s impact on future generations both on and off the pitch. A cornerstone of that strategy is to build a robust financial position upon which to build the future.
“The strategy and aligned budget plans for financial year 2024/25 have been endorsed and supported at the recent SRU Board meeting at which the external advisors were also present to provide support and answer questions in relation to the key components of the budgetary outcomes.
“Although the challenges going forward for Scottish Rugby are significant, we have every confidence in John McGuigan and his colleagues on Scottish Rugby Limited Board to navigate these difficulties grounded upon the new strategy and operational budget for financial year 2024/25 and beyond.
“The proposed loss of colleagues in this evolving process is deeply upsetting for all involved in Scottish Rugby and underpinning the approach will be principles of fairness and empathy.
“Going forward, progress towards budgeting and strategic objectives will be carefully monitored and regularly reported to the clubs and stakeholders of Scottish Rugby.”
Scottish Rugby President Colin Rigby said: “In common with others, Scottish Rugby has faced significant financial challenges in recent times.
“In light of this situation, the Scottish Rugby Limited Board has made the difficult decision to reset our financial approach, fully supported and endorsed by the SRU Board. Our primary goal is to ensure the long-term viability and growth of Scottish Rugby.
“We understand that this process may have implications for some of our colleagues and we are committed to handling this period sensitively and respectfully.
“Our priority remains securing the future of the Scottish Rugby for generations to come, while minimising the impact on our colleagues and key stakeholders.”