Rugby’s pricey ankle tap tackle
Simnikiwe Xabanisa looks deeper into why unions are being liquidated or reporting losses; why sponsors are scaling back or leaving; why fans are no longer turning up at stadiums; and why players are going abroad
Two things feed into clarifying that picture: an evershrinking slice of the Sanzaar pie, what with Argentina also coming along for the ride, and major sponsor Absa’s decision to pull the plug on its deal. Sanzaar broadcasting rights amounted to R330 million (a third of South African Rugby’s annual revenue), a sum that is divided into 15 between the 14 provincial unions and SA Rugby.
While the share is becoming smaller, travel costs have increased due to the new destinations (Argentina, Singapore and Japan) added to the roster without necessarily growing the game in those areas.
According to an insider, the six Super Rugby franchises get an additional “franchise fee” for the duration of the tournament.
What angers most of those involved is that the smaller unions have an equal share of the pot by virtue of having an equal vote, as opposed to how much their contribution to the success of the game is.
Absa’s late, late show in deciding not to renew was a significant financial blow. When it decided to pull the plug on its sponsorship of the Springboks and the Currie Cup, it was paying R90 million for the space on the front of the Bok jersey and a further R45 million or so for the domestic competition.
To get a sense of how much SA Rugby has lost, one has to consider that Blue Label Communications, which has stepped into the breach on the Bok jersey, would be hardpressed if it was paying even 50% of what Absa was paying for the upgrade, according to an industry insider.
Added to the pretty bleak picture is that BMW and Unilever are also not extending their deals.
The exaggerated response by one official was that “an overwhelming majority of the unions are insolvent”, while a more tempered view is that more than half of them are in the red.
The truth may be somewhere in the middle, but when Western Province say they will make an R11.2 million loss and have a R72 million lawsuit hanging over their heads, the outlook can’t be rosy for the rest.
Province have always had a reputation for being one of the moneyed unions, and if they don’t have money, who does?
Eastern Province have already been liquidated this year for failing to pay creditors the R28 million they owed them.
This means their Super Rugby team is now SA Rugby’s burden because it insisted on a sixth franchise.
That “legal and moral” obligation costs SA Rugby about R30 million per Super Rugby season, which is apparently a third of what you really need to run a team in that competition.
There are relative success stories, such as the Griffons and the Valke, teams that rely on begging and borrowing for players and operate on shoestring budgets. instructive of how people just don’t go to stadiums any more.
In the end, they got between 12 000 to 17 000 people to a 52 000-seater stadium that would have expected at least 45 000 five years ago.
The bigger issue here is that the season’s ticket sales have gone down by almost 50% for pretty much all the major rugby unions.
The TV numbers aren’t better, either, with Super Rugby as a whole having gone down by between 30% and 40%, while that figure is about 15% to 20% for South Africa.
The reason offered for this is that people tend to watch two to three things at the same time these days, and the advent of social media and live scoring means people can braai and keep an eye on the rugby on their phones.
A bloated and confusing Super Rugby format has not helped.
NO MORE Absa has pulled out as Currie Cup sponsor
IN CHARGE SA Rugby president Mark Alexander says the SA Rugby Union is open to private funding