The South African Rugby Union (SARU) reported a pre-tax profit of R24m in 2011 – a year during which participation at the IRB Rugby World Cup traditionally increases costs, while depressing the earning capacity of international rugby federations.
SA Rugby
The result was due to an 18% increase in earnings, allied to cost containments in operating expenditure, excluding allocations to provinces.
“It was a year of severe cost cutting, during which we restructured the operational side of SARU to be more streamlined and efficient,” said SARU CEO, Jurie Roux.
“We converted 16 different divisions into seven new departments, more effectively aligned to deliver on our mission to provide outstanding strategic leadership for the business of rugby. That we were able to do it while containing costs was doubly pleasing.”
Total operating expenditure increased by 12%, largely due to a 76% increase in broadcasting rights allocations to provinces. The increase in operating expenditure however, excluding broadcasting rights allocations to provinces, was contained to only 2%, well below the prevailing inflation rate.
Group revenue grew to R597m (from R505m in 2010) due mainly to a significant increase in revenue from broadcasting rights at the start of a new five-year contract. Sponsorship income grew by 11% as a number of contract renewals were confirmed and new sponsors became involved or others increased their rugby portfolio.
The jump in pre-tax profit from an operating loss before taxation of R5.4m, 12 months ago, was in line with SARU expectations.
“We had forecast a reasonable profit for 2011 and the eventual outcome was ahead of our expectations,” said Basil Haddad, SARU’s chief financial officer. “Given that the new broadcasting agreements and a number of new sponsorship agreements, which commenced in 2011, are essentially fixed until 2015, and that operating cost containment continues to be an operational priority, it is likely that that a reasonable profit will be achieved in 2012.
“We have set ourselves an annual profit target of not less than 5% of annual operating costs, excluding rights allocations to provinces,” said Haddad. “The aim is to build up sufficient cash reserves in order to weather unforeseen growth in expenses beyond inflation.”
SARU’s full financial statements will be presented to the Annual General Meeting in Cape Town on 30 March.
So SARU’s profits are up.
My question is this, in my time as an administrator at a community based developing club in a “coloured” area, the club never received a cent in development funding either from SARU or the local Union under whom we fell, so when is REAL GRASS ROOTS DEVELOPMENT GOING TO START?
And by that I don’t mean a group of Rugby Legends giving a clinic at some deprived school in the middle of nowhere that don’t have a coach to carry on any interest because there’s been squat development in the past!
Come on Messrs Roux, Hoskins and Haddad. Tell us when you intend INVESTING IN FUTURE SPRINGBOKS by using some of OUR profits in Rugby development.