HomeNewsBusinessRugby UnionSouth Africa

Sponsorship downturn blamed as SA Rugby posts loss

SA Rugby, the governing body of rugby union in South Africa, has blamed a downturn in sponsorship revenue after posting a pre-tax loss of R23.3m (€1.67m/$1.79m) for the year ending December 31, 2016.

Delivery of sponsor rights costs fell 24 per cent to R125m due to a reduction in the size of the portfolio. SA Rugby maintained that implementation of cost savings meant normal operations were unaffected, adding that the figures still represented a “satisfactory” result.

SA Rugby maintained its support to the 14 member unions, which increased by 90 per cent to R336m, mainly thanks to increased broadcast income, as group revenues rose 19.9 per cent to R1.2bn.

Competition costs rose 46 per cent to R155m while fees for player image rights and insurance increased almost fourfold from R23.5m to R87.3m. A new arrangement secures the image rights of provincial players on behalf of member unions for their use in marketing and branding campaigns, having previously only related to national team players.

“In a very difficult economic environment and considering the many challenges to ensure that we deliver on rugby imperatives, we consider this a satisfactory operating result,” SA Rugby chief executive Jurie Roux said.

The financial results come after SA Rugby in December unveiled a comprehensive reform package that aims to reinvigorate the sport in the country. The General Council of SA Rugby accepted a host of constitutional changes following the worst year in the history of the national team, the Springboks. South Africa entered 2016 having reached the semi-finals of the 2015 Rugby World Cup, but proceeded to lose eight of its 12 Tests last year, including a record 57-15 home loss to New Zealand in October.

Roux warned that SA Rugby is likely to face similar financial pressure in 2017. “Securing and retaining sponsorships is now key for 2017 although we will continue to review our cost base,” he added. “It is likely to be another challenging year if we are to maintain our current level of support for our members and our other rugby activities.”