VIDEO: The 'virtuous circle' that is making SA the envy of the world

The South African Rugby Union needs victorious national teams to ensure the financial sustainability of the organisation.

That is why it spends a quarter of its total income directly on the Springboks, national women’s team, the Sevens, Baby Boks and other national teams.

This emerged from the financial statements, which were presented to member unions at last Thursday’s Annual General Meeting in Cape Town.

Mark Alexander, president of SARU, said in a subsequent media briefing that they generate their income from participation in competitions.

With new competitions, such as Rugby’s Greatest Rivalry and the Nations Championship, kicking off this year, the national body is ‘within reach’ of returning to sustainable profitability.

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At last week’s AGM, SARU approved their financial statement and discussed the budget for the forthcoming year.

“For us, it is important to understand what our business is,” SARU CEO Rian Oberholzer told Rugby365, adding: “Our business is rugby.

“We have to ensure that we have strong national teams – the Springboks, Sevens, women, as well as our Under-20 and junior teams.

“The moment that happens, the commercial value of our entity increases.

“We can create proper commercial value, to feed back into the system and bring the next tier of players through.

“It is like a virtuous circle for us.

“We must do everything we can, to keep our national teams strong, to earn money that flows back into our structures again,” he said of the self-sustaining feedback loop where one positive event triggers a chain of favourable events, ultimately reinforcing the original event and leading to continuous growth or improvement.

“That money flows back, through our members, into our elite development programmes to ensure the Springbok team stays strong.”

(WATCH as Rian Oberholzer, SARU CEO, reveals the factors behind the improved financial status of the national body……)

Oberholzer added that creating playing opportunities, especially at the schoolboy level, is making South Africa the envy of other nations.

“We have a responsibility to keep on feeding that, and we must never forget what our focus is.”

Alexander, who said SARU has demonstrated its resilience in a challenging operating financial environment for many years, has taken deliberate steps to future-proof its financial sustainability.

This includes building up a substantial ‘reserve fund’.

“It is important for when we have ‘disruptions,” the President said, using COVID as an example.

“All the new contracts [with commercial partners], since COVID, have a new clause.

“If we can’t deliver on our rights, we can’t generate money.

“If we don’t generate money, we can’t sustain the organisation.

“We must have a reserve of at least six months top a year, to keep the organisation going.

“Currently, we don’t have that.

“In 2020, we were able to sustain our unions by propping them up. We spent all the reserves we had.”

Alexander pointed out that England received handouts from their government, a luxury SARU did not have.

“They still closed clubs,” he said of Wasps, Worcester Warriors, and London Irish.

These teams ceased trading and crashed out of the Premiership during the 2022-2023 season due to crippling debts.

“The last thing we [SARU] want to do is lose jobs.

“We make our money from the Springboks and the URC teams that play internationally.

“If we can’t do that, a huge part of our revenue will dry up.

“Building up a reserve fund is of paramount importance. It is about survival.”

The SARU boss added they haven’t looked at possible ‘equity’ since the failed Ackerley bid a couple of years ago.

SARU appointed an independent auditor to investigate ‘the best way forward’ for the organisation.

SARU’s revenues increased by 29 percent from ZAR1.5bn in 2024 to ZAR2bn in 2025, with ZAR500-million spent directly on the Springboks (ZAR281-million) and the High-Performance Department (ZAR221-million) into which all other national teams fall.

Another ZAR195-million was spent on national team players (and referees) – to secure their image rights for commercial purposes – as well as to insure them against injury. Direct investment into the 15-member unions saw ZAR400-million spent on the playing of the game in the form of distributions to members.

The increased revenues were in part fuelled by record sponsorship revenues, leaping by 51 percent from ZAR488-million to ZAR739-million (following a commercial reset) to exceed broadcast revenues of ZAR678-million for the first time.

Revenues were also boosted by a change in the Test match hosting model, through which SARU took ownership and delivery of Springbok matches.

It yielded ZAR402-million in revenues with a direct match day cost of delivery of ZAR213-million.