South Africa forced to go cap in hand to World Rugby

The COVID-19 pandemic has hit rugby in South Africa so badly that SA Rugby was forced into knocking on World Rugby’s door to ask for financial support. According to information from the Rapport all the large unions and even some of the smaller ones were forced into requesting an advance on the annual contributions made to them by SA Rugby.

In effect, SA Rugby has gone to World Rugby and asked them for next year’s stipend now and added that to whatever savings they currently have in order to help the unions survive.

A top rugby administrator told Rapport that this is not unusual as virtually every year there are countries that request an advance.

“It’s dead normal. I think SA Rugby also did it in 2016. Some countries do it every year”

SA Rugby has been helping the unions with advances since March 2020 to ensure there are no fears about them being able to pay salaries.

Despite the advances the insecurities of when the unions will be allowed to open their gates to the paying public again are still there. Terrible pressure is still on the rugby bosses as to when they will be able to normalize their cash flow again.

Unfortunately, no rugby administrator that spoke to Rapport could give a firm date when the stadiums will be allowed to open their gates to the suite holders, season ticket holders and public again.

Rugby bosses are hoping that President Cyril Ramaphosa will provide them with this information soon however the expectation is that this won’t occur before early next year.

The income from their suites is the third-largest source of income for the larger unions.

“The larger unions have watched the income from their suites fall over the last five years and unions are losing millions of Rands” said another administrator

“They’re struggling to find companies that are prepared to rent the suites for the prices they used to get but even if it’s 100 suites at R200,000 each it’s still R20 million that’s at risk for the larger unions”

Unions can still hold their suite leaseholder to contractual terms as they have a binding agreement in place and the lessee is still bound to honour the terms of the contacts in place.

However, if they do this, they run the risk of alienating those lessee’s and losing them the following year as they simply won’t lease the suite again.

On top of the risk that the unions carry with the loss of income from the reduction in the amount of games they’ve been able to stage they also have the problem where COVID-19 has caused devastation in the economy to the point where some of the suite holders can’t even afford their current payments.

The first item on the unions budget is now entertainment in order to bring in some much-needed income.

“The only trump card the larger unions have is the upcoming B&I Lions tour where people will renew their contracts for 2021 to be able to watch this but what happens after 2021 is anybody’s guess”

Large unions are only managing to bring in about a third of what their income should be according to another administrator.

Large unions income remains critical according to a third rugby administrator. “What makes it even more difficult is that we don’t want to make empty promises regarding 2021 to our suite holders, sponsors and season ticket holders.”

“I think it’s going to take three to five years for the unions to recover from what COVID-19 has done to them this year.”

A fourth rugby administrator told Rapport that the large unions will only be able to recover from this year's financial setbacks if they’re able to open their gates immediately in March 2021 for the start of the Pro16 series.

“The next few months are going to be critical for us” he said.