SA Rugby announces 'small surplus' as Alexander gets re-elected

NEWS: The Springboks’ return to the playing field in 2021 ensured the South African Rugby Union (SARU) was able to report a small surplus for the year (R8,9 million), as the sport began to emerge from the grip of the COVID-19 pandemic.

The annual financial statements were approved at the SARU Annual General Meeting in Cape Town on Friday (29 April), at which incumbent Union president, Mark Alexander, was re-elected for a further four-year term.

The meeting was notable for the presence of 12 women representatives from the 12 member unions with voting powers [Border and the Western Province are currently in administration and do not have such rights]. SARU amended its constitution in 2021 to ensure greater diversity by mandating that at least one of each union’s representatives should be female. All three representatives have one vote each.

The meeting also accepted constitutional changes to admit Limpopo into membership of SARU. They become the 15th member union, although with ‘Development Union’ status. The change grants them participation into SARU amateur tournaments but does not carry with it voting rights.

Meanwhile, the return to action allowed revenue to increase by 80 percent on 2020’s severely impacted levels – rising from R710m to R1,283bn – recovering almost to pre-COVID levels [R1,296bn in 2019].

All South African national teams, apart from the Springbok Women’s Sevens and SA Schools sides, resumed play during the 2021 season after the wipe out of the previous 12 months. The Springboks, Springbok Women and age-group teams were completely inactive in 2020 and the Springbok Sevens team appeared only four times before the pandemic hit.

That increase in activity generated a recovery in broadcast and sponsorship revenues. Broadcast income increased from R417m in 2020 to R655m while the nett income from the Lions Series (R107m) when added to existing sponsorship contracts (R222m) saw sponsorship income rise to R329m (R282m in 2021).

The return to rugby activity had a consequent impact on expenses with rugby costs increasing by R107m to R280m; commercial costs by R52m to R292m and image rights and insurance costs by R18m to R73m. The improving environment allowed distributions to member unions to increase from R187m to R244m.

However, the rugby business remained under severe financial pressure, said Jurie Roux, CEO of SA Rugby.

"The return to play of the Springboks and the delivery of the Lions Series were critical to the survival of the sport in 2021," he said.

"Had we not been able to deliver those events we would have been closing rugby’s doors by year end.

"Having said that, the fact that the pandemic prevented the attendance of supporters at Springbok Tests and at provincial matches means the sport remains in a precarious position.

"Last year [2021] was supposed to be the year that we built up reserves from the windfall of a British & Irish Lions tour; COVID-19 denied us that opportunity. The tour meant we were able to break-even but if we are hit by an event of a similar magnitude, we have zero reserves to weather it."

Roux thanked SA Rugby’s broadcast and commercial partners for their continued support throughout the crisis but noted the impact of COVID-19 continued to have a serious impact.

"It was gratifying to see income return to 2019 levels, but we should have been far ahead of those numbers in 2021 – both from the Lions Series and from increased values in renewals and without reductions that were amortised into existing agreements," he said.

"Our provinces were only allowed to host 2 000 spectators from October, and, like all businesses, we have had the additional cost burden of applying COVID-19 protocols. Financial sustainability remains a pressing concern for the sport."

Roux said that the prospects for 2022 remained positive although the game-changer for the industry would be the relaxation of restrictions on venue attendance.

Alexander was re-elected to the post he has held since predecessor, Oregan Hoskins, stepped down in October 2016. He was opposed by Mbulelo Gidane, the vice president of the Eastern Province Rugby Union.

In the only other election Hennie Baartman (president, SWD RU) and Randall September (president Griffons RU) were elected to the Executive Council (also for four years). They succeed Lindsay Mould and Schalk Liebenberg who were unsuccessful in a bid to be re-elected.

Alexander said: "This has been an extraordinary year due primarily to Covid, and though the threat to rugby has not diminished, we remain hopeful that the national vaccination programme will allow society and our sport to gradually return to normal.

"While we cannot yet take anything for granted, we will continue to work towards the return to vibrant grassroots activity on and off the pitches in our schools and clubs, and for the return of spectators in the professional game, which will secure the financial underpinning of rugby."