McRobbie acknowledged it was a hefty financial blow but reassured the local rugby community that they would see the 45th Hong Kong Sevens in April 2-4 next year.

“It goes without saying that the membership are concerned, not over the way in which the board and management have handled the situation, but because we are so heavily, as an organisation and community, reliant on the Sevens.”

While the union has an approximate “two-year reserve” that will safely see them through at least another year, McRobbie said the pandemic “exposed the fragility” of its commercial model – which had already undergone restructuring as part of World Rugby’s four-year rule.

In May, the HKRU laid off 12 of its 166 full-time staff despite having announced a 2019 revenue increase of HK$250 million, according to last year’s annual report. McRobbie later clarified that the union “still recorded a loss” and has since revised projections.

“Whilst we do see it as a very, very unusual set of circumstances, for us and the game of rugby more broadly, it’s equally been a bit of a wake-up in going back to review commercial models,” he said.

“Even going back to last year, you can see in our strategic plan we had made the decision to move the union back to a position of break-even budgets for this coming four-year cycle. We knew we already had to tighten the purse and address some structural recurrent expenditure.

“Covid was probably less the underlying problem but more of the catalyst to us making the difficult decisions we knew we had to make at some point. Unfortunately, redundancies were made and staff salaries were reduced at management level. We’ve done a lot of the hard yards in terms of getting us on to a more financially sustainable footing going forward.”

The major revenue earners from the Sevens are corporate box income and tickets, which in 2019 raked in HK$116 million and HK$55 million respectively.

“Managing staff morale in a situation like this and managing the expectations of the rugby community is a challenge – there’s no getting away from it,” McRobbie said. “We’re a very close-knit community and everybody is concerned.

“As things stand, the budget for the coming year – even based on the very conservative revenue projections for the Sevens tournament next year – will bring us in at a break-even point, or we might even potentially make a small profit,” McRobbie said, adding confidently that there was no need to cut any of its programmes.

According to its annual report, the union spent HK$58 million on “staff costs” (including exceptional costs of termination benefits), HK$45 million on its 79 men’s and women’s players, and HK$27 million on “clubs and community”.

Although the plan is to tackle next year’s edition with the assumption that the pandemic will have subsided, McRobbie reassured the rugby community that they had set up contingency plans just in case.

“Any responsible organisation in this current environment has to go through the process. We’re fortunate to have gone into this with significant reserves in the bank,” he said.

“In simple terms, it’s fair to say that we will have pretty much used up one year’s worth of reserves by the time we get to April [2021], which leaves us with another year of reserves, so we’ve got that cushion to keep us going while we instigate whatever changes we need to.

“Come the worst-case scenario with no Sevens next year, we’re still solvent as a company which is critical. We’re not going bankrupt. Having said that, of course we would then need to have a critical review of all areas of operation, strategic plan, and objectives, because realistically we would have to make further adjustments.

“Like any organisation, we’re anticipating and working towards a successful [event], but equally we’re planning for the worst.”

McRobbie added that World Rugby – which was similarly forced to cancel its London, Paris and Singapore sevens events – has reiterated its “100 per cent” backing that the Hong Kong Sevens is a critical tournament for the overall series. Additionally, sponsors HSBC and Cathay Pacific have been “incredibly supportive from day one of this difficult journey”.

“It’s very important with regards to the road map for the Olympics. It’s been a very disruptive period for the Sevens programmes across all unions, but heading into the Olympics in the best possible state of preparedness, they’re going to need a number of high-quality tournaments in the months preceding. We are very confident that World Rugby sees us as a top priority tournament heading into 2021,” he said.