The South African Rugby Union (SARU) reported a pre-tax profit of R24m in 2011 – a year during which participation at the IRB Rugby World Cup traditionally increases costs, while depressing the earning capacity of international rugby federations.
“It was a year of severe cost cutting, during which we restructured the operational side of SARU to be more streamlined and efficient,” said SARU CEO, Jurie Roux.
“We converted 16 different divisions into seven new departments, more effectively aligned to deliver on our mission to provide outstanding strategic leadership for the business of rugby. That we were able to do it while containing costs was doubly pleasing.”
Total operating expenditure increased by 12%, largely due to a 76% increase in broadcasting rights allocations to provinces. The increase in operating expenditure however, excluding broadcasting rights allocations to provinces, was contained to only 2%, well below the prevailing inflation rate.
Group revenue grew to R597m (from R505m in 2010) due mainly to a significant increase in revenue from broadcasting rights at the start of a new five-year contract. Sponsorship income grew by 11% as a number of contract renewals were confirmed and new sponsors became involved or others increased their rugby portfolio.
The jump in pre-tax profit from an operating loss before taxation of R5.4m, 12 months ago, was in line with SARU expectations.
“We had forecast a reasonable profit for 2011 and the eventual outcome was ahead of our expectations,” said Basil Haddad, SARU’s chief financial officer. “Given that the new broadcasting agreements and a number of new sponsorship agreements, which commenced in 2011, are essentially fixed until 2015, and that operating cost containment continues to be an operational priority, it is likely that that a reasonable profit will be achieved in 2012.
“We have set ourselves an annual profit target of not less than 5% of annual operating costs, excluding rights allocations to provinces,” said Haddad. “The aim is to build up sufficient cash reserves in order to weather unforeseen growth in expenses beyond inflation.”
SARU’s full financial statements will be presented to the Annual General Meeting in Cape Town on March 30.
February 14, 2012
So, what’s new? One year, they are complaining that the tournament scheduling is unfair because, they argue, it favours the Australian and New Zealand teams. The next, they are moaning about wanting to head to Europe because they play in the same time zone.
Now they are complaining they don’t have enough teams in the tournament – and that if the tournament is not expanded from a Super 15 to Super 16, they will boycott the event.
Forget about it. It’s not going to happen. It is just the latest in a long line of the type of political bluster of which South African rugby officials are the masters. The Super Rugby ranks were all a tizz yesterday when a South African newspaper claimed the five local teams had threatened to boycott next year’s tournament if any of them were excluded at the expense of the Southern Kings.
The Rapport newspaper said the Stormers, Bulls, Lions, Cheetahs and Sharks had sent a letter detailing their demands to the South African Rugby Union, including that none of them would be eliminated from the tournament next year, when the Kings are added to the Super Rugby ranks. The Kings hail from the Eastern Cape, the South African province that boasts the most black players.
The concern of the South African Super Rugby teams is that unless there are six South African teams in next year’s tournament, which will mean expanding to a 16-team competition, one of them will have to be cut to make way for the Kings.
The two provinces most under threat hail from the highveld – the Lions and the Cheetahs. Adding to the pressure is that the South African authorities have already said a merger of those two is not on the table.
Instead, a relegation system has been proposed, causing concern among all the South African provinces. So the boycott threat is all about survival and putting pressure on the local authorities not to give the Kings an easy leg-up.
Not surprisingly, South African officials yesterday tried to play down the boycott threat, but did acknowledge there was friction among the five existing Super Rugby teams over the Kings’ inclusion. To try to keep all their constituents happy, the SARU will continue lobbying their Australian and New Zealand partners to get an extra team. But they have no hope of success.
As Australian Rugby Union chief executive and SANZAR board member John O’Neill told the Herald last week: ”We’re in the second year of a five-year deal where we sold to the broadcasters a 15-team competition. Changing that midstream is not really on.”
The Super 15 will remain the Super 15 until at least 2016 – and one South African province will have to go to allow the Kings to come in. End of story.