Border’s financial woes prove new system is due in SA rugby

2018-04-22 08:45
Simnikiwe Xabanisa

Johannesburg - If the Border Bulldogs’ near liquidation this week achieved anything, it is that it still managed to prove beyond a doubt that the business model by which the provincial unions are run has outlived its usefulness.

In the time-honoured South African tradition of papering over cracks, Border’s last-minute rescue will probably be seen as a victory of sorts. But it is this kind of flying by the seat of their pants that has seen the EP Kings and Western Province liquidated, and the Bulls dangerously flirting with bankruptcy in the last couple of years.

The situation is said to be so dire that only about four of the 14 unions can be said to have cash in the bank, and that list is dominated by minnows such as Boland, the Griffons and SWD Eagles.

To gain a sense of how the unions sail too close to the sun on a monthly basis, consider that Border nearly got liquidated for owing their players a rumoured R250 000 in medical aid and pension fund contributions.

Forget that it is a criminal offence to deduct pension fund contributions and not bank them in a fund, the amount that almost sunk Border says more about their financial state than any accountant can.

Some of the stories emerging from the mess - like the fact that the union has more contracted staff (25) than players (24) - paint a picture of a place being run with the lack of accountability that comes with elected officials playing monopoly with the broadcast rights money.

A source claimed this week that big business would like to be involved with Border, but are reluctant because they don’t have a chief executive to look after their money, especially when the president, Phumlani Mkolo, is out on bail pending a trial for fraud.

As an aside Mkolo’s day job is politics as the suspended secretary of the ANC’s WB Rubusana region, which ironically makes him fit right in with the politicians masquerading as administrators wheeling and dealing in rugby on a daily basis.

Accountability to their players and stakeholders has come a distant second for years on the priority list, which is why allowing elected officials, as opposed to businessmen, run bona fide businesses has the whole system under stress.

Curiously, the Bulls are said to have tabled a motion to 100% privatise the unions and turn them into clubs with owners, instead of the current proposal on the table of going 74% private.

There have been no takers for the latter module, the best example being that investment company Remgro - which already had a 24.9% stake in Western Province - pulled out of adding 50% to its ownership after a feasibility study.

The main complaint was how little control they would get with even a 74% stake due to the many restrictions imposed by SA Rugby on the would-be owners. It turns that out real business has an issue with footing all the bills and having the 'Brannas en Coke' brigade make all the decisions on how to run the business (think Robert Gumede at the Lions a few years back).

As Remgro showed with its interest, the likes of Johann Rupert, Patrice Motsepe and Gumede are said to be keen to involve themselves with rugby, but they want full responsibility so that they can be accountable when it all thrives or goes pear-shaped.

The good thing about if it goes belly up is that the next businessman to buy the club as a vanity project gets to inherit the debt of the concern, instead of the current situation that sees SA Rugby frittering money that should be going into their reserves away by bailing out their affiliates.

There is a legitimate fear that, if the unions were to go fully private, it would create a French club-like atmosphere where the owners can be a law unto themselves, the South African context being that it would be tough to police such things as development and transformation.

But given that South Africa is a country that insists on corporate companies being BEE compliant, is it really that huge an obstacle? Also, as a company, why would you not want to create black role models to give you exposure to the vast majority of the country?

Follow me on Twitter @Simxabanisa

Read more on:    border  |  simnikiwe xabanisa  |  east london  |  rugby


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