South African rugby is in deep financial trouble.
Morale is also rock bottom and a number of senior people have resigned from SA Rugby, the company which runs the game.
The resignations have caused deep concern in a number of rugby’s big sponsors, including Vodacom and Sasol.
Accounts currently being finalised suggest that SA Rugby will this year record a loss of around R10-million on a turnover of betweenR400 and 500-million.
The only way that loss will be turned into a profit is if account auditors PriceWaterhouseCoopers include the R30-million front payment made by SuperSport for their controversial deal with the union – for exclusive TV rights for the years 2011-2015 – in this year’s figures.
The SABC has challenged that deal as “not transparent” and two of the SA Unions, Eastern Province and Western Province, have raised concerns about the deal.
Expenses within the SA Rugby are said to have ballooned from around R40-million two years ago to a current figure of around R80-million, not including Springbok salaries.
SA Rugby’s finances appear to have declined dramatically in recent years. For the previous year, 2006, they declared financial reserves of R18-million.
Back in 2003, the union had reserves of R43-million. Then, on a turnover of R230-million a year, the 14 provinces were paid about R7-million each.
Today, on turnover figures of between R400 and R500-million, the provinces’ share has been reduced to R4,5 million each.
The news could not have come at a worse time for SA Rugby president Oregan Hoskins as he seeks re-election to the post.
Despite the money woes, Hoskins is advocating an Argentine team participate in the Currie Cup from next year and that SA Rugby pays for it, a commitment that could cost about R10-million a year.
Meanwhile, Managing Director Jonathan Stones has confirmed he is receiving a bonus of R500 000 despite the company’s unimpressive figures.
Stones said: “I inherited a budgeted loss for this year of R20-million. That has been reduced to around R10 million. I have brought value to the organisation.”
But the most recent financial worry for SA Rugby is that the new airline sponsorship deal with SAA, which replaced the one with British Airways, remains unsigned.
BA spent around R8,5-million on its sponsorship deal with SA Rugby over the last three years but were blown away at the negotiating table when SAA offered R75-million for a new three-year deal, against BA’s offer of R2,8-million a year.
BA insists their rivals will never recoup such a vast investment, a point that may be shared by the heads of SAA’s parent company Transnet, who are said to be studying the deal. It may explain why it remains unsigned but SA Rugby are said to be “sweating” over the unsigned contract.
SA Rugby senior personnel who have gone are:
Commercial manager Kyle Nel, who had been with SA Rugby for more than six years and was a fairly senior member of the management team, is leaving this week. It is alleged he offered his resignation because of the SuperSport TV deal.
Sponsors Sasol are said to be hugely disappointed, for Nel was the main link between the company and the sponsors. Sasol has written a letter to SA Rugby, declaring its disappointment at Nel’s imminent departure and SA Rugby’s alleged failure to attend to their needs. There is currently no Springbok brand manager and no Super 14 brand manager.
Former management committee member Cliffie Booysen has quit to join the International Rugby Board.
Highly regarded finance manager Vanessa Bell left, allegedly because she was disenchanted at the state of the organisation.
Marketing manager Khutso Mathekgana has resigned.
Four members of the marketing department’s 6-strong team have quit. The two left are believed to have few qualifications and little experience.
Other key staff in the ticketing and finance departments have left and media manager Vusi Kama is said to be discussing his future but has said he does not want to be involved on a full time basis anymore.
The union’s leading financial backers, companies like major sponsors Vodacom and Sasol, are said to be “furious” at the chaotic situation they have encountered at the union.
A senior sponsorship figure in South Africa said: “It’s true, their whole marketing department has left the building.
“But many people wouldn’t notice whether they were there or not. With respect, what did they achieve when they were there?”
Mike Stofile, who is challenging Hoskins for the presidency later this month, said: “We need to know why these people are leaving.”
Source: Peter Bills IOL.co.zaTweet