'A triumph to still be in business': SA Rugby reports just a £400,000 loss despite 45 per cent drop in revenue

South Africa Rugby have hailed their strict austerity measures which ensured they only posted a modest loss of only R7.9million in 2020 (£400,000) - despite enduring a 45 per cent decline in revenues caused by the global pandemic.

Group revenues declined to R710million (compared to R1.29billion the previous year) in a year in which the 2019 World Cup-winning Springboks didn't play a match. The fall was caused by broadcast and sponsorship income cuts, the cancellation of the Test programme and the HSBC Cape Town Sevens.

This decline in revenue was matched by reductions in expenditure achieved through rugby-wide collaboration between SA Rugby, the South African Rugby Employers’ Organisation (SAREO – representing the provincial unions), MyPlayers (the players’ representative organisation) and Sport Employees’ Unite (employees’ trade union).

The SA Rugby industry mitigation plan had focused on a worst-case scenario of cutting up to R1.2bn from rugby’s global budget by reducing expenditure (49.7 per cent of savings), cuts in other operational budgets (37.3 per cent) and in salary reductions (13 per cent). 

The plan led to cuts amounting to 25 per cent of total remuneration across the industry and annual financial statements were approved at Tuesday's SA Rugby AGM. “By the end of the year it was a triumph to still be in business,” said Jurie Roux, SA Rugby CEO.

“SA Rugby did not have the reserves to ride out the storm without any impact, nor were government bailouts available. It took a unique collaboration across the industry to arrive at a drastic cost-cutting plan to keep the sport afloat. We have managed to avoid widespread job losses or racking up the losses of some of our international peers, but it requires ongoing austerity and extreme financial vigilance to maintain what is a precarious position.

“I’d like to thank all the stakeholders for their collaboration in 2020 once again. It has been said many times but extraordinary times called for extraordinary measures, without which we could not have survived the year. We were able to collaborate with our broadcasters and sponsors on finding mitigation strategies and equitable reductions, while we were also very grateful to be able to access World Rugby loans to support our member unions and ensure that we still have 14 unions in 2021.

“Unfortunately, the austerity measures will have to continue. The unforgiving truth at the elite end of the sport is that we are in the entertainment business and our product is rugby matches and the 365-day-year story that surrounds them. Without matches and an audience we have little or no income and until we return to a situation where venues are allowed 100 per cent capacity we will remain under extreme financial pressure.

"We have weathered Covid's first storm and the return of our national teams and the arrival of the British and Irish Lions will be a great psychological boost. However, I cannot stress enough, we remain on a financial tightrope which will require careful management and financial restraint to survive.”