Mark Alexander’s re-election as SA Rugby president was met with a predictably negative social media reaction last Friday.
And in some ways the backlash is justified. This, after all, is a man who has been at the helm of the organisation during two of the Boks’ worst seasons and two years of financial losses that have amounted to nearly R60m.
But having sat through five hours of SA Rugby’s annual general meeting last week (not for the first time either), it was obvious that rugby’s problems are not the making of one man and one person won’t easily fix them either.
Around the table were representatives of 14 provincial unions, the bulk of which are financially unsustainable and all are running at a loss.
SA Rugby’s balance sheet shows revenue of R1.2bn earned for the previous tax year, yet it still lost R33m, which – weighed up against its income – is not a sustainable situation.
Most of the organisation’s money is ploughed back into the provinces (R306m) and into player contracts and other rugby expenses (R241m) as well as players’ image rights (R90m).
Not being a forensic auditor, I don’t know where and how the union can cut corners, though I’m sure there are ways. But all this serves to underline is that rugby is an expensive business, and not a very lucrative one at that.
It’s easy to say that incompetents run the unions and if ‘real business people’ ran rugby it would suddenly become a sport that thrives commercially. That’s highly unlikely.
Successful businessman Altmann Allers bankrolls the Lions. He has made a fortune in the private sector and clearly understands business, yet without his own funding, the Lions wouldn’t be a going concern.
This is not a problem unique to South Africa either. Do you think that the huge salaries paid to players at Top 14 clubs Toulon, Montpellier and Stade Francais are funded by the commercial success of those clubs, based on the professional structure of the French league?
Those clubs are the playthings of mega-rich industrialists who are dipping deep into their own pockets to draw the best players to their clubs.
English club Saracens, usually held up as the definition of professionalism and success in the modern club game, has lost over R260m in the past four seasons. Recently, South African billionaire Johann Rupert sold 50% his stake in the club to fellow investor Nigel Wray. Rupert admitted that his Remgro shareholders would no longer accept bankrolling a vanity project.
The Exeter Chiefs are the only English rugby club currently operating at a profit while the Australian Rugby Union just announced a R32m loss.
There is a trend here. Professional rugby is, for the most part, not a profitable business.
The only people making any money out of the game are the players and broadcasters. Owners, clubs and rugby unions are bleeding funds; that’s the reality.
Alexander may not be the best president or person to lead SA Rugby into the 21st century, but rugby’s problems are not going away regardless of who is running the show.
At least Alexander appears to have identified one of the key stumbling blocks to rugby in SA, which is that the country has far too many ‘professional’ players. He cited 750 pro players and he wants to see that number cut in half.
That would be a huge step forward, but having listened to the pettiness of representatives of rugby unions around the country, making that change is going to be almost impossible.
As a consequence rugby will continue to meander to commercial failure because it’s still bogged down in its bloated amateur structure.