The South African Rugby Union reported a small deficit of R6.8m (before taxation) in 2023 because of significant game-related expenditure in an “extraordinarily challenging” financial year, the Union’s members were told at the Annual Meeting in Cape Town on Thursday.
The result was described as a “major achievement” by Rian Oberholzer, CEO of SA Rugby, against a global rugby landscape in which many other national unions had reported significant losses.
A sizeable 38% of annual union revenue of R1.35bn was expended on the investment in participating in the Vodacom United Rugby Championship and European Professional Club Rugby (EPCR) competitions (R385m) and the ultimately successful Rugby World Cup campaign (R133m).
Other Springbok and national team activities (R326m), and securing player image rights and local insurance (R124m) accounted for 33% while the R347m distribution to member unions was 25% of income.
The escalating costs arrived in a year in which revenues traditionally decline because of a reduction in the Springbok fixture programme which resulted in a 7% decrease in group revenues from R1.54bn in 2022 to R1.44bn.
“It was an extraordinarily challenging financial year,” said Oberholzer, “and to achieve the outcomes we did, both on and off the field, was a major achievement.
“Income declines in Rugby World Cup years, while costs go up, and for the first time that challenge was compounded by the fact that we continue to invest in northern hemisphere participation.
“Those investments continue to pay off, but it makes for a very challenging balancing act on an annual basis. Those challenges will lessen once we become shareholders in the URC, but the general financial sustainability of the South African rugby ecosystem remains an ongoing concern.”
The non-participation in the traditional inbound and outbound series and a truncated Castle Lager Rugby Championship impacted on revenue while the contractual commitment towards Rugby World Cup player and management win bonuses increased team costs, although the impact was softened by securing a performance-based insurance product and a sponsorship incentive arrangement.
The absence of a Currie Cup sponsor was offset against better-than-expected revenues from merchandising royalties, and test guarantees for Rugby World Cup warm up matches against Wales and New Zealand.
The potential deficit was offset by group grant income recognised from World Rugby increasing significantly from R36.4m in 2022 to R290.6m. Grant income is not reported as revenue, but as other operating income.
“All international federations are struggling to make ends meet, if you look around the rugby world,” said Oberholzer. “We are no different to our peers in that, except for the fact that we have managed to report a far more modest operating loss than others have reported.
“Unlike many of those peers, we do not have any debt and have reported an unqualified audit once again. This is a significant position we have managed to retain, considering the legacy of the pandemic and the scale of the annual investments we make in the playing of the game. I’d like to thank all in the sport for their support and contribution in making such an outcome possible.”
The full annual report will be published at www.springboks.rugby next week.
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