SA Rugby report their Covid-19 inspired austerity measures have paid off
SA Rugby on Tuesday reported their Covid-19 inspired austerity measures have paid off but that they are by no means out of the woods.
While their revenues declined by R580 million‚ they were able to mitigate their losses largely through cutting expenditure by 45 percent. They have contained their 2020 losses to R7.9m.
SA Rugby chief executive Jurie Roux cautioned however that the worst was not over.
Group revenues declined to R710 million (compared to the R1.29 billion of the previous year) in a year in which only South Africa and Japan (of Tier One rugby nations) did not play a match.
SA Rugby attributed the fall to cuts in broadcast and sponsorship income‚ while the cancellation of the Test programme and the Cape Town Sevens – among other things – meant no income was realised from major events.
SA Rugby said in a statement: “The eventual 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 Covid Industry Mitigation Plan focused on a worst-case scenario of cutting up to R1.2bn from rugby’s ‘global’ budget by reducing expenditure (49.7 percent of savings)‚ cuts in other operational budgets (37.3 percent) and in salary reductions (13 percent). The plan led to cuts amounting to 25 percent of total remuneration across the industry.
“The Annual Financial Statements were approved at the Union’s AGM – by teleconference – on Tuesday with the meeting hearing that the careful financial management allowed the SA Rugby group to report a R1.5m profit‚ benefitting from income realised from subsidiary SA Rugby Travel.”
Despite the stringent austerity measures‚ SA Rugby was cutting it fine. “By the end of the year it was a triumph to still be in business‚” said Roux.
“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 on-going austerity and extreme financial vigilance to maintain what is a precarious position‚” said Roux.
He added that the extraordinary times called for extraordinary measures‚ without which SA Rugby 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.”
The austerity measures will have to persist. SA Rugby won’t nearly make the windfall from the upcoming tour of the British & Irish Lions that they had originally anticipated. With no‚ or reduced crowds they will have to make modest projections for the tour that had been earmarked as a significant windfall this year.
“Unfortunately‚ the austerity measures will have to continue‚” said Roux. “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.”
Roux said that he expected the Springboks to play a schedule of 14 Tests in 2021 (two more than usual).
Source: ARENA Holdings.