In South Africa, the ‘Big Three’ – rugby, cricket and soccer – face plummeting revenues in the wake of no live sport, while minor codes are under even greater threat as crucial sponsorship money dries up.
South African sport faces a crisis the likes of which has never been seen before and one that has the potential to change the game forever as the Covid-19 pandemic threatens the brittle fabric that has kept professionalism alive in the country.
Rugby, cricket and soccer all face plummeting revenues in the wake of no live sport, while minor codes are under even greater threat as crucial sponsorship money dries up.
The ‘Big Three’ all rely heavily on broadcast revenue, and for rugby and soccer, the inability to stage live sport in the first few months of the lockdown has put that relationship under threat. As has the worsening economic crisis in the country, which could see millions more people out of jobs and cancelling their subscriptions to pay channel SuperSport in what will be the longer-term effect of the pandemic.
Tough economic times do not bode well for sports, with the corporate paymasters loathe to be seen to be pumping money into sponsorship while at the same time laying off workers.
The immediate threat to all sports is to keep paying the players and staff, and across the board, there have been salary cuts that suggest the days of largesse are over, for now, and possibly, the foreseeable future.
South Africa’s Premier Soccer League (PSL) faces the potential for collapse as we know it, with clubs already cutting player salaries, laying off non-playing staff and facing a burst to the bubble of what is seen by many as the richest and best-equipped league in Africa.
Absa announced a premature end to their lucrative deal as headline sponsors of the league, worth some R140 million ($8.3 million) per season, while stalwart clubs such as Bidvest Wits, with a rich 99-year history, have been sold as owners reconsider their appetitive for the sport.
“Football all over the world is a business like any other,” Cape Town City owner John Comitis tells FORBES AFRICA. “It has to be treated as such and that means in tough economic times, you have to look at ways of cutting costs.
“But as a club, we will do everything possible to limit the damage. A lot of that will be dependent on how quickly we can re-start the season, because we need to fulfil our contractual obligations to our sponsors and the broadcaster.
“That is the major source of income and without that, it is inevitable that the effect will trickle down to staff and the players.
“But even if you cut player salaries, the cost of running a club remains high. It is a very difficult situation and some [clubs] will handle it better than others.”
Fellow top-flight side AmaZulu confirmed they could not pay full salaries as early as the end of April, though they were guarded on the size of the cuts, saying in a letter to players and staff, “even though the club receives the [R2 million] PSL grant and has Spar as a sponsor, it still relies on other income streams and significant contribution from the owners of the club whose businesses have been severely affected by Covid-19”.
In rugby, some of the country’s top players will lose up to 43% of their monthly earnings up to the end of 2020 after South African Rugby announced plans to cut its budget by R1.2 billion ($71.5 million) for the year.
This would be achieved through a mixture of interventions, including cancelling junior competitions, and limiting other operations such as training camps, coaching courses and non-essential work.
But players will also feel the brunt, with a sliding scale used to determine how much they will lose on their monthly wage, which according to reports, is on average around R50,000 ($2,980) per month across the board, though higher earners can collect five times that amount.
The cuts, which amount to 25% of total remuneration across the industry, are not just for players, but coaching staff, administrators and office workers as well. Those earning less than R20,000 ($1,192) per month will not be affected.
“It was a complex process to find alignment with a number of entities representing 1,396 people in the South African rugby industry,” SA Rugby CEO Jurie Roux says.
“The group identified our collective areas of financial risk and what savings had to be made and then identified a plan to mitigate those risks.
“It has meant salary cuts for many, but we have put together a plan that will ensure the industry will be positioned and resourced to get straight back to action just as soon as we are permitted.”
Cricket has largely been shielded from the financial fallout due to the fact that the season was coming to an end just as lockdown was implemented.
It means the industry would have been dormant for a few months in any case, and the national team players mostly idle, though a limited overs tour to Sri Lanka in June was called off.
South Africa’s home summer really kicks into gear in December, by which time authorities are hopeful they will at least be able to stage matches and fulfil their contractual obligations, though a poorly-performing economy may have longer-lasting effects.
“We have budgeted for the amount [of salaries for the season],” Cricket South Africa Acting CEO Jacques Faul says. “It’s a centralized system and both the national team and [domestic] franchise players are budgeted for. At this stage, we will have enough capacity to see us through the [2020/21] season.
“But in the long term, even if we cover this season, we will have to look at what the situation is going to be after that and the financial impact it has. In our situation, I cannot see any player getting less money this season, but going forward, I can see a situation where players might have to receive less.”
The great uncertainty for everyone is the difficulty in predicting how the Covid-19 pandemic will play out in South Africa.
But what is clear is if salaries and jobs are to be saved, the games need to start sooner rather than later, or the money will simply dry up, and in a worst-case scenario, the likes of rugby and cricket could return to the amateur era.
– By Nick Said