Johannesburg - The funding that saved the Border Rugby Union from liquidation at the 11th hour this week has been described as a “drop in the ocean” by an insider.
Having been provisionally sequestrated at the behest of the SA Rugby Players Association (SARPA) on Tuesday, Border miraculously escaped when a mystery funder - rumoured to be the Buffalo City Metropolitan Municipality - bailed them out, resulting in the association announcing that it would rescind its legal action.
While the funding was enough to convince SARPA that its members would be paid the medical aid and pension fund owed to them - which, depending on who you speak to, is either R113 000 or R250 000 - and their salaries at the end of the month, an official within the union said it wouldn’t exactly solve their financial problems.
“That money is not enough to sustain us,” said the official.
“We’re going to have to institute a turnaround strategy, starting with salary cuts and retrenchments. We’ll then go on a roadshow to get more funding because, in terms of what we need, that money was a drop in the ocean.”
The story of Border’s rescue paints a disconcerting picture of how tight its financial margins are. According to a City Press source, the expected funds had not arrived by the time the players decided to liquidate the union.
The official claimed that knowing the funds were on the way was one of the reasons they did not oppose the motion to sequestrate Border, but the irony was that the funds cleared in the bank two hours after liquidation.
There was also a concerted effort to explain how Border, which was thought to have recovered after going under administration just a few years ago, found itself in this position again.
“We renewed our player contracts last October when we cut them from 38 to 24 to accommodate the budget. But in December, (SA Rugby) cut our annual funding by about R2.5 million, and stopped funding our travel and accommodation costs for competitions like the SuperSport Rugby Challenge.
“The point is, our grant was cut after our contracts were signed, but our mistake was not cutting our contracts and retrenching.”
In his press conference to announce the funding on Friday, Border president Phumlani Mkolo claimed that SA Rugby had cut the broadcasting rights grants to the provincial unions to fund the Southern Kings’ participation in the PRO14 competition - a team they’ve had to run over in the past few years.
The immediate result of the funding cuts has been that Border has not been able to pay its monthly salary bill of R920 000, only managing R560 000 of it.
Its solution, according to SARPA, was to skimp on the players’ medical aid and pension fund contributions.
According to the collective player bargaining between SARPA and the provincial unions, players are not allowed to play without medical aid cover. A source claimed it was a criminal offence to deduct pension funds from players and not pay them into a fund.
The Border official also said one of the things that has put pressure on cash flow is an old SA Rugby debt it is still servicing from when it was bailed out - back when the union was run by the late André Kilian.
The debt is at least R8 million and SA Rugby deducts repayments from Border’s monthly grants, said the official, adding that it would be a great relief if the governing body wrote the debt off.
Ironically, it was the players who pushed for the sequestration to be reversed, supposedly because they didn’t understand the repercussions of the union being liquidated.
“They didn’t understand that, even though they were the first complainants on the liquidation, they would probably be the last to be paid. They also didn’t realise that, from here on, they would receive R1 000 vouchers for food for three months and that would be it.”