The money generator and costs in the PSL…
The biggest money deal in Africa…
SuperSport’s rights deal with the PSL makes it the most lucrative on the African continent. Following the renewal of a partnership that began in 2007 and confirmed to be worth R1.6 billion, the PSL and SuperSport remained unusually tight-lipped about the value after yet another five-year extension in December of 2017. But numerous reports since then have indicated that the agreement, which is effective from the start of the 2019/20 season, is worth well over R2 billion, an amount Khoza said remains the sole reason the in- dustry is still standing.
It’s the most lucrative TV rights deal in Africa – pushing the PSL to pole position on the continent and well inside the top 30 across the globe.
According to the League’s Chairman, 80% of the team’s income is derived from the broadcast deal.
Khoza didn’t mince his words about the significance of the TV deal, referring to it as the funding model on numerous occasions during his press conference in Johannesburg last week. Recently, the PSL has increased the grants given to each club from R1.5 million to R2.5 million – and this has been the saving grace for many of the club owners.
The R30 million that the clubs receive per annum, as monthly grants, pays the majority of the bills. This was made clear by Khoza when he said, “If you take away our funding model, we will have a situation where clubs can’t afford to pay salaries. And instead of making broken promises, we will have to shut down the PSL.”
“All of this now is at risk because of the ICASA recommendations,” he argued. “With a stroke of a pen, they now want to take away the most important asset we have – the right to sell exclusivity. Without adequate funding, professional football will fall. If the industry loses 80 % of its funding it will shrink back to what it was in 1985 or completely collapse.”
The likes of Chiefs and Pirates earn in the region of R70 million a year from their title sponsor, in the this case Vodacom, while the mid-table clubs could secure a title sponsor for around R10 million per year – however, not all the clubs have managed to land a title sponsor.
Gate in-takes do not contribute either, with most clubs breaking even through their revenue at the turnstiles, covering match-day hosting costs.
With corporate sponsors not throwing money at the mid- table clubs, the main income generator is the TV rights, with some club bosses forced to dig into their pockets at times to bridge the deficit.
How much does it cost to run a club?
With the PSL announcing a record revenue of R938 million in the past financial year, the so-called smaller clubs will be hoping the league’s financial stability can also help keep them afloat.
Club owners, most recently Bloemfontein Celtic’s Max Tshabalala and Farook Kadodia of Maritzburg United, have admitted to the challen- ges they face in the day-to-day upkeep of a team in the top division. Khoza repeatedly spoke of the tireless efforts put in by the men and women who run PSL teams notwithstanding the tough economic times, adding that it was for this reason that the league was handing out monthly grants to clubs.
The Siya crew has established that it costs between R40 million and R50 million per annum for a mid-table team to have all their bases covered during the season, while the usual suspects when it comes to targeting the championship and silverware spend between R60 million and R100 million.