Players 'slam' amateurs ruining professional rugby
REACTION: South Africa’s players, through their trade union My Players, had a go at ‘amateurs’ ruining the professional game in South Africa.
In a statement, in reaction to the weekend’s announcement that the Southern Kings have been placed into voluntary liquidation for a second time, MyPlayers voiced its concern on the “regularity and manner in which commercial entities of amateur unions are being liquidated” within our professional environment.
MyPlayers pointed out to the rash of unions in South Africa that have filed for liquidation of its professional entities, only to continue benefitting from participating in professional competitions.
The Falcons (In July) filed for the provisional liquidation of their commercial entity.
At the weekend SA Rugby and the EP Rugby Union, as shareholders of the Southern Kings, announced the Kings’ second liquidation in less than five years.
In recent years, WP Rugby and Border’s commercial entities met a similar fate.
Several other unions are on the brink of financial ruin.
“On all occasions, the Players’ Organisation has been in the trenches of this seemingly normal occurrence in our domestic game,” Eugene Henning, CEO of MyPlayers, said in a statement.
“We have seen and experienced the human impact this has on players who lost their livelihoods as a direct result of the mismanagement of the professional game.”
In South Africa, the amateur union is entitled to solely decide whether it wishes to set-up a separate commercial entity to manage its commercial affairs.
The union drives such process, identifies the equity partners, performs the necessary due diligence and then co-manages such commercial entity with these partners.
In most industries, the liquidation of such a commercial entity is the last resort taken when it can no longer honour its commitments to its creditors.
At the point of liquidation, a company is permanently shut down and it loses all intellectual property rights, assets and other means that enabled it to operate a business.
The MyPlayers statement points out that the approach to liquidation in the game in South Africa is different.
This has led to a lack of accountability and consequences for the amateur unions, who often voluntary liquidate their entities when they can no longer meet their obligations to their creditors, including professional contracted players.
After liquidation, a new company is created with no assurances given that the amateur Unions will do a better job at running this new business than the one they had just run into the ground.
“It is just not good enough for a Union to shift all the financial blame to the commercial entity that was set-up and co-managed by the Union,” Henning said.
“It is an easy buck to pass when you suffer no consequences for the failings of your commercial entity.
“Come Monday, it will be life as normal for the union.
“It will still enjoy its voting rights on the SARU General Council and be allowed to make important commercial strategic decisions on the direction of the professional game even though their own commercial entity failed.
“They will still receive their normal financial distributions from the professional game from SARU and be allowed to participate on the field in the professional game although their own commercial entity was liquidated.
“However unthinkable, they will be allowed to immediately set-up a new commercial entity like the one they had just voluntarily liquidated.
“There is thus a clear incentive for Unions to liquidate commercial entities and walk away from financial obligations to get a clean second bite at the cherry while creditors and employees are left in the dust to pick up the pieces.
“Unless Unions are held accountable for the failings of their commercial entities, there is no reason for this ‘rinse and repeat’ culture to be eliminated from professional rugby in South Africa,” said Henning.
“The COVID-19 pandemic has put all industries under considerable financial stress, and as a means of reducing those pressures on their employer, the Kings players have sacrificed a substantial share of their salaries since May.
“In the current market, players are unlikely to find employment elsewhere, which makes the timing of this decision, six days before salaries were due, downright coldblooded.”
The Players’ Organisation represents a group of stakeholders in rugby who are young, have young families, and who have committed themselves to a career that seldom lasts more than 10 years before they enter the next phase of their lives.
For reasons that have nothing to do with them, they are often the biggest casualties, when they can least afford it, in an industry that fails too often without any real accountability measures in place. The consequences for them remain long after the wrongdoers have been allowed to continue business as normal.
In no true professional environment is it normal or ethically defensible to sustain a culture of poor governance and financial management to the degree that it has become standard and without penalties as is the case in South African rugby.
This sports code has been professional for 25 years, but its lack of commercial codes of conduct continue to hamper true professionalism.
Henning has called for the industry to engage in conversations about the level of governance, financial discipline and accountability prevalent in professional rugby.
“The status quo is damaging to the game,” he said.
“No further comment will be made at this time,” the MyPlayers statement concluded.
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