SA Rugby plans for R1bn loss if 2020 season is cancelled
After two weeks of extensive negotiations and consultation, SA Rugby on Tuesday 21 April announced a massive budget cut plan and cancellations of competitions as a consequence of the coronavirus pandemic.
Nearly five weeks have passed since the last competitive professional rugby match took place in South Africa due to stringent lockdown regulations because of the impact of the coronavirus. And with no return to play dates confirmed, SA Rugby has cut some lesser tournaments from the schedule while tentatively confirming that events such as Springbok Tests will go ahead as planned.
But that is only if national government’s regulations allow for it. As it stands now, playing rugby is impossible and without a fixed set of dates for a return to “normal”, SA Rugby’s announcement is contingency planning.
Chief Executive Jurie Roux confirmed that the rugby industry as a whole, would cut between R700-million and R1-billion from the budget over the next eight months if there is no return to play in 2020. That represents 30-45% of the entire industry’s annual worth. It’s a staggering amount and will inevitably lead to job losses and player contract cuts.
Franchises and unions have been submitting and resubmitting budgets to the planning body over the past few weeks. There was a recognition from the industry for collective effort, which is why the process took several weeks before a single industry plan was finalised. The positive outcome of this plan is that it was done in a fully consultative way and that all stakeholders were included and heard.
At the moment no one is talking about job cuts in the short term, but salary reductions are inevitable. The players’ union, MyPlayers, entered into a collective bargaining agreement for its 700 members to ensure equitable terms across the board.
Sports Employees Unite (SEU), which represents rugby staff at SA Rugby and the major unions, has also been part of the consultations and has also signed off on the terms, the exact details of which have not been made public.
Daily Maverick understands that pay cuts will be on a sliding scale, with those earning the most making the biggest sacrifices to keep job losses in the industry to a minimum.
The plan has been agreed in a united strategy formulated in discussions including representatives from all stakeholders: SA Rugby; provincial unions; players and rugby industry employees. The plan incorporates the Industry Salary Plan (ISP) which will see a united and collective approach towards salary reductions.
Shaving R1-billion off the budget takes some doing. Cancellation of competitions, cuts in other operational budgets and in salary reductions are how the rugby industry will achieve the outcome. All discretionary items have been put on hold.
“Many businesses find themselves in a fight for survival and rugby is no different,” Roux said. “We face an extremely threatening crisis and we had to take united and decisive action to address it head on.
“I’d like to commend the employees, players and the unions for the collaborative and realistic way they have approached this crisis. We are all in this together and we all quickly agreed that we have to equally contribute to the solution.”
Roux said that the salary reductions had been agreed in principle by the collective and were now being communicated to those effected before final approval through the various governance channels of SA Rugby, MyPlayers, SEU and the individual unions.
“Our income is tied to the playing of professional rugby and without matches we potentially don’t have any income,” said Roux. “We don’t know when we will be able to resume the season so have had to budget against a range of scenarios.
“This Industry Financial Impact Plan has been formulated against a worst-case scenario where we are not able to resume play for the rest of the year. It means we face a major belt-tightening exercise on a sport-wide and personal level, but without these measures we wouldn’t have much of a sport to return to.”
If all rugby is cancelled for the remainder of the year then SA Rugby would inevitably be penalised by its partners – broadcaster SuperSport in particular, but also other sponsors. The broadcaster has not pulled out of its contract with SA Rugby yet, but if there is no rugby this year the game is in default to its stakeholders. This financial plan is based on that worst-case scenario.
Alternative tournament structures
Super Rugby and PRO14, the two major global tournaments in which South Africa’s six major franchises participate, are currently suspended. They have not yet been cancelled.
Officially, SA Rugby is sticking to the line that Super Rugby and PRO14 will resume in some form in the near future. But the reality is that scenario is virtually nil considering the amount of international travel involved.
SA Rugby has tentatively put in place plans for a national competition featuring the six franchises, as an alternative, although there are no details about that proposed tournament structure. The controlling body has also culled several competitions immediately.
After 55 consecutive years, the iconic Under-18 Craven Week won’t take place in 2020 as a result of no schoolboy rugby currently being played. Practically, provincial teams cannot be selected with no fixtures being fulfilled.
The tournaments which are still part of the planning for 2020, are:
- A local franchise and union competition planned for June to August as an alternative to Super Rugby and PRO14;
- Currie Cup Premier and First Divisions;
- A provincial U21 Competition;
- SuperSport Rugby Challenge;
- Women’s Inter-Provincial competition;
- International matches involving the Springboks Men’s and Women’s teams; and
- The HSBC World Rugby Sevens Series involving the Blitzboks.
Furthermore, the participation of the SA Rugby Sevens Academy and Springbok Women’s Sevens teams will be evaluated as international borders reopen and new dates are received for the World Series Qualifiers for 2020.
The following tournaments and competitions have been cancelled for 2020:
- All SA Rugby Youth Weeks;
- SA Rugby Provincial U13 and U17 Sevens;
- SA Schools U18 Competition;
- SA Rugby Provincial U19 Week;
- SA Rugby Provincial U20 Competition; and
- SA Rugby Provincial Sevens Competition.
“These are unprecedented times, not only for rugby in South Africa, but across all spheres of life all over the globe,” Roux said.
“Unfortunately, we had to make some very tough calls in terms of our local competitions, but we have the buy-in and support from the local franchises and unions, SAREO, MyPlayers and our broadcaster, SuperSport, in this regard.
“The decision to cancel certain competitions and tournaments is in line with what has been happening across various sporting codes all over the world – we are not shielded from this in South Africa.
“In terms of other teams’ participation in certain competitions, and the hosting of other tournaments, we are currently on a return to train and play readiness plan, but this is dependent on government advice and decisions as the pandemic evolves.” DM
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