SA Rugby on Tuesday reported a minor deficit for 2022 because of its considerable investment to gain entry into the Vodacom United Rugby Championship and Champions Cup.
The South African Rugby Union reported record broadcasting and sponsorship revenues for 2022 but still reported a minor deficit because of its considerable investment to gain entry to northern hemisphere competitions, member unions were told at Tuesday’s Annual General Meeting in Cape Town.
Group revenues increased significantly to R1.54bn (2021 – R1.28bn) thanks principally to increases in broadcasting (R828m from R654m) and sponsorship (R396m from R222m) income, but the Group’s pre-tax deficit of R2.62m included expenditure of R330m attributable to participation in the Vodacom United Rugby Championship and European Professional Club Rugby (EPCR) competitions.
The increased broadcasting revenues were in part due to the higher value attributed to the 2022 Springbok calendar, featuring a home series against Wales as well as a full Castle Lager Rugby Championship programme.
However, CEO Rian Oberholzer warned that broadcast revenue would be significantly reduced in 2023, in the absence of a touring Test team from the northern hemisphere and of a truncated Rugby Championship programme.
“From being a recipient of nett income from Super Rugby as a founding member of SANZAAR, we are now a nett contributor to European club rugby as our participation costs on the way to once again becoming a nett recipient in the medium term,” said Oberholzer.
“Historically, SA Rugby might nett around R160m from SANZAAR. But we are now in a situation where we are having to pay our way into an already established entity.”
Those participation costs – plus the responsibility of carrying all the international travel and accommodation costs of the SA teams – had amounted to R330m in 2022.
Oberholzer warned that SA Rugby would have to continue with austerity measures in its other activities until the successful conversion to shareholder status at the conclusion of the 2024-2025 season.
At provincial level, distributions to SARU’s 15 members accounted for R285 million in expenditure, although the return to pre-COVID levels would only be possible in 2023.
SA Rugby president Mark Alexander said that the role of private equity investors in the sport at national and provincial level was extremely important and necessary.
“Private equity investment contributes in a significant way to our rugby ecosystem nationally,” he said. “We must ensure that everyone benefits on an equitable basis from our growth as an organisation – and that we don’t kill the golden goose within our franchises in the process.
“It stands to reason that the more we succeed in international competitions, the more marketable we become, and the more all rugby will benefit. We need to address ways to include the private equity structures in our decision-making processes, to ensure that everyone has a seat at the table, and always be mindful of how membership is constituted. I am sure we can find the model that will be to the benefit of the greater good of the game.
“Managing the sport’s finances is a daily challenge but our basic asset – the Springboks and rugby in South Africa – remains a blue-chip resource in the market.”
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