SARU stands firm in financial 'dispute' with franchises
REACTION: The South African Rugby Union believes they have been ‘even-handed’ in their distribution of income from television rights and sponsorship resources.
Weekend media reports suggested there was a ‘stand-off’ between some of the big franchises and SARU over the reduction in distributions in the 2021 and 2022 seasons.
According to a report in the Afrikaans weekly newspaper, Rapport, the Bulls and Sharks are claiming ‘back pay’ of ZAR23-million.
It is claimed SARU wants to “write off” the shortfall in redistributions, but the Bulls and Sharks were dead set against it.
They were supported by the Cheetahs.
The franchises are not happy that there was a reduction in their financial allocations at a time when SARU was financially supporting the Stormers – a franchise (through its parent union, Western Province Rugby Football Union) that is currently under administration.
The matter came to a head at last week’s Annual General Meeting in Cape Town.
In the 2022 annual report, SARU confirmed there were “loans” to member unions of ZAR84.7-million.
However, it was not clear how much of that was for the cash-strapped WPRFU/Stormers – which remain under administration.
The shortfall in payments to the Bulls, Sharks and Lions for 2021 was ZAR13-million and ZAR7-million for 2022.
According to Rapport‘s article, the franchises are also claiming ZAR3-million in interest.
A spokesperson for SARU confirmed the matter is “being addressed”.
“The context for the reduction in distributions in 2021 and 2022 was the impact that the COVID pandemic had had on the income of SARU and the investment required to give our franchisees a platform on which to perform in Europe,” the spokesman told @rugby365com.
“However, in conjunction with the members we have established a clear pathway to address the question and it will be considered by the team – made up of representatives of all stakeholders – which has been set up to determine the funding model for 2024 and beyond.
“All members were treated equally in the process.”
SARU reported record broadcasting and sponsorship revenues for 2022 but still reported a minor deficit because of its considerable investment to gain entry to Northern Hemisphere competitions, member unions were told at Tuesday’s Annual General Meeting in Cape Town.
Group revenues increased significantly to ZAR1.54-billion (2021 – ZAR1.28-billion) thanks principally to increases in broadcasting (ZAR828-million from ZAR654-million) and sponsorship (ZAR396-million from ZAR222-million) income, but the Group’s pre-tax deficit of ZAR2.62-m included expenditure of ZAR330-million attributable to participation in the United Rugby Championship and European Professional Club Rugby competitions.
* To read the complete annual report, CLICK HERE!
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