Lions 'hopelessly insolvent'
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.