News24

Lions 'hopelessly insolvent'

2012-02-13 13:32

Johannesburg - Golden Lions rugby is hopelessly insolvent, this despite on Thursday announcing a three-year multimillion-Rand sponsorship deal from property firm Redefine.

A 140-page forensic report compiled by accounting firm KPMG last year, and other documents in the possession of City Press, paint a dismal picture of the Golden Lions and its marketing and managing company, Ellis Park Stadium (Pty) Ltd (EPS).

The report shows that Golden Lions rugby nearly lost its most prized asset - Ellis Park - and the company managing Ellis Park was so mismanaged that it had exposed its directors to possible criminal prosecution.

The last financial report (2010) shows that its total liabilities exceeded its assets by R73 million.

According to the documents and a reliable source close to the developments, Golden Lions rugby owes different parties about R90 million.

This is far less than their total income of around R44 million from the SARU-SuperSport television rights and stadium naming rights from Coca-Cola.

The money is shared with Ellis Park World of Sport (Epwos), the Ellis Park stadium management joint venture that also incorporates Johannesburg Stadium and the Standard Bank Arena.

The union reportedly makes about R400 000 per home game (13 games per season) on gate takings. This depends on Super Rugby/Currie Cup match attendances, which average about 15 000 before match expenses, including Epwos’ share.

All suites income goes to Epwos.

There is a huge shortfall to cover players salaries and the operations budget of about R90 million per annum.

Another disturbing revelation was the disparity between the salaries of players in the Golden Lions.

Springbok Butch James earned over R3 million for the 2011 season in contrast to flyhalf and Currie Cup final man of the match Elton Jantjies’ less than R500 000.

Sport24

Comments
  • Morne - 2012-02-13 13:38

    How much was the prize money for winning the currie cup? Also R10 mil like the psl??? That could ease the financial difficulties somewhat.

  • daniersa - 2012-02-13 13:38

    Same article as over the weekend. Shame on you Media 24. First article was bad, repeating it is even worse. http://www.sport24.co.za/Rugby/Super15/Lions-are-insolvent-reports-20120212

  • Koos - 2012-02-13 13:39

    eish manne......... wat is die violgende stap....... stel die regte mense aan om die regte werk te doen! kom oop daarmee em se wats fout!

  • Hendrik - 2012-02-13 13:43

    How can something like that happen? If I recall, in the days of Louis Luyt, the same "organisation" under another name was claimed to have been the richest of its kind in the world. Where did it go wrong? Who lined their pockets and stripped the coffers?

  • Lionel - 2012-02-13 13:47

    Butch James earned last year 3 mil,how much rugby did he play!!!!!

      ivan.coetzee2 - 2012-02-13 13:51

      Geez talk about an over-rated, over-paid and under-performing player!

      Deon - 2012-02-13 16:00

      He played 1 "good" game for the Lions against the Sharks but gave it all away with a yellow card. He should not get more than Elton.

  • Saffa - 2012-02-13 13:48

    Surely by now heads at the GLRFU should be rolling? Or have all the twats who mismanaged the union for a decade already been fired/removed etc? Another case of SARU failing one of it's unions imho. Where were they? Why were they not assisting the Lions in terms of expertise, business guidance etc years back already? Sad as it is, I reckon the limp wristed SARU bandits are "satisfied" with this state of affairs as it allows them to deny the Lions a franschise licence at the end of 2012.

      PieterJ100 - 2012-02-13 14:01

      I wonder why all is so quiet about the dealings of Manie Reyneke, the previous CEO, surely most of these problems happened while he was the helm of things? Why was he let go? Why not a whisper from anyone relating to his tennure? Im sure a few sceletons will come out of the closet if Manie's wealing and dealings are opened for public scrutiny?

      Koos - 2012-02-13 14:32

      i aggree.... he stuffed up Alberton Rugby and now the Lions/Tvl rugby!!!

  • greg.vangoeverden - 2012-02-13 13:49

    Cool - bring on the KINGS

      Deon - 2012-02-13 16:03

      The Pumas, Griquas, Leopards and Boland are all more deserving for a place in Super Rugby than the Kings.

      Ruan - 2012-02-13 19:38

      Deon, you are short sighted. you try and figure out how the logistics of a combination of any of those teams will work? Movement for growth is what should be looked at and the eastern cape has the biggest chance at that. If you say anything else you just prove the point further that you know very little of future planning!

      Marius - 2012-02-14 09:08

      @ Deon. And where are they going to play their games, in their high school size stadiums? None of those provinces you have mentioned have the infrastructure to support a Super Rugby team. And as Ruan have said.None of those provinces can do it on their own and the logistics to combine them will be impossible. The Kings are the only logical sollution. You have 3 provinces very close together and a world class stadium right in the middle of the three. Furthermore the Eastern Cape currently has the fastest growing economy in the country that could support such a team financially.

      Alexander - 2012-02-14 09:33

      So Marius and Ruan, let’s get this straight. The criteria for whether or not you should play pro rugby is not you game standard? but the size of your stadium or how much you need to improve! Ruan, if that is what you call future planning, I truly hope you are not into stocks or investing! Marius, do you live in the Eastern Cape??? I lived there for twenty years; it can’t even support its current infrastructure, now you are raving about its financial strength??? Gents, merrit, merrit and lets hear it again. Merrit. If the kings do come in and play a deserving game, I will give it to them, but this debacle reeks of a political move and to say that it is not just so, shows zero grasp of the reality, Ruan.

      Marius - 2012-02-14 11:13

      @alexander-malan. Yes I have lived in the Eastern Cape all my life and have seen the changes over the last 10 years in the economy here. Industrial and office parks are going up all over PE, with very high occupation rates. The development along the Garden route is phenominal. Your problem is that when you think EC, you immediately think Transkei/Ciskei, not the major centres that will form the infrastructure of the franchise. Let's face it . Rugby today is all about money. He who has the most money can buy the best team. The Kings already have a 50 million sponsorship lined up on condition that they play Super Rugby. Add to that the 40 million they will receive as their share of the TV rights money and they will sit with 90 million in the bank very year. With that sort of money at their disposal they can buy a pretty decent, winning team and also develop the local talent at the same time. There are at least 10 schools in the Southern Kings geographical area that finishes in the top 30 rankings in the country in schools rugby every year. Historically the area has been bargain bin corner for the other franchises to buy some of the best rugby talent in the country. With a Superrugby franchise all that talent will stay at the Kings. Maybe that is the real issue, why all the current big unions are fighting so hard to keep them out. They will then have to develop their own talent and not just buy them cheaply from the Eastern Cape.

  • paulr.g3 - 2012-02-13 13:51

    to those commenting on the re-posting of this article by news24, i have not seen this article over the weekend so its the first time i am reading it.I believe that its important to appreciate the difference between print and electronic formats. Had this been a re-print that we had to pay for then being annoyed at a re-printing of the article is justifiable. However, being that this is a FREE electronic format, if you dont like the article, or find that its been repeated, do the next best thing, stop reading, or dont read it...

  • PieterJ100 - 2012-02-13 14:07

    I wonder why all is so quiet about the dealings of Manie Reyneke, the previous CEO, surely most of these problems happened while he was the helm of things? Why was he let go? Why not a whisper from anyone relating to his tennure? Im sure a few sceletons will come out of the closet if Manie's wealing and dealings are opened for public scrutiny?

  • John - 2012-02-13 14:08

    I wonder how much of this loss a as a result of poor attendance due to fickle supporters? Those who, like politicians.... switch allegiances according to the score sheet..

  • Robert - 2012-02-13 14:11

    shame on you news24!!!!!!!!!!!!!!!!!!!!!!!!!!

  • Gungets - 2012-02-13 14:15

    Who owns Ellis Park World of Sport. My guess is that friends of friends (nudge, nudge, wink, wink, say no more) are lining their pockets. As for just R400k per game, WTF man. You should be getting that just from Season Tickets. At this rate Cheeky Watson is going to buy the franshise for pocket change and shift you all to Port Elizabeth.

  • Eduard - 2012-02-13 14:20

    Gevoel die "cheeky's little kings" gaan by die leeus oorvat volgende jaar.

  • Andre - 2012-02-13 14:20

    i am sorry,but someone is not concentrating-how can they pay R 3 m for a player that hardly played any games and who is a total has been-i say again it again-somebody is not concentrating and perhaps the forensic survey is not forensic enough and should be looking even more indepth.Something is not good and this i can tell without looking at a forensic report

  • Francois Petzer - 2012-02-13 14:25

    again shall we comment on the weekends news,thanks to corrupt and incompitent management at epwos the union is seeing its ass,as for the kings sure introduce a bunch who couldnt even beat boland last year in currie b side final,to superrugby.Joke! Those responsible should be prosecuted

  • dean.hartley3 - 2012-02-13 15:36

    Why not start with Andy Turner who was CEO before Reyneke. they all lined their [pockets and set themselves up for easy retirement. One can feel sorry for Kevin as he is trying to save a sinking ship.

  • David - 2012-02-13 15:52

    Perfect excuse to allow the Kings to play next year. Pity though, just as Lions seemed to turning the corner. Maybe a Lions supporter will win the Powerball and bail them out, there's still hope...

  • Seja - 2012-02-13 17:05

    GOLDEN LIONS MANAGEMENT= ANC GOVERNMENT

  • james.kukard - 2012-02-14 08:13

    Okay,so the Lions rugby is insolvent, why not close them down? I'm now getting tired of reading everyday how insolvent the Lions are. This all because Gumede didn't get what he bargained for, if he knew this why did he buy into an insolvent company? This story is been running for the past three years and guess how long is cheeky and son trying to get into the S15. Lol!!!

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