STORMERS will continue to engage SA Rugby about its funding model until there is certainty around the distribution of revenue, especially when it comes to the four international franchises.
After the Stormers finally joined the three other big teams with private ownership recently, they are in a better position with a new chief executive and board to sit around a table with rugby’s national governing body to clear up the issue.
SA Rugby’s funding model has long been contentious, especially for the provinces playing international rugby and how, especially, the broadcast revenue, is funnelled down to them.
New Stormers Rugby chief executive Johan le Roux has now called for more certainty for the franchises and the need to continue engaging with SA Rugby in the future by re-looking at changing the model.
“A very big part of the broadcast revenue flows through SA Rugby in different forms. It’s not contractual and it can change, that is the uncertainty we don’t like,” Le Roux said this week.
“So, it’s very difficult to invest in a business and keep funding losses (as investors) if you’re unsure about almost half of your revenue if you add up components, including a test match, insurance, the players of national interest (Poni) payments and distribution.
“If you add all that up, it’s almost half our revenue. It is an enormous part of our business. Not having a clear line of sight on what those numbers look like going into the future is a real problem for a businessman.
“I can’t discuss the model now, but what we want to propose is for collaboration between the unions to discuss it with SA Rugby. Those discussions are ongoing.”
Le Roux, as head of Fynbos Ekwiteit, along with other role players of Red Disa Investments, recently acquired a controlling stake in the Stormers to “save” rugby in the Western Province.
Now, they are hoping to get the beleaguered team out of the financial red zone after a major investment and their goal is to have Stormers Rugby feasting at the top table of international club rugby.
South Africa’s four franchises – the Lions, Bulls, Stormers and Sharks – currently partake in the United Rugby Championship (URC) and European Professional Club Rugby (EPCR) competitions. However, the mother union is not yet a full stakeholder in the different tournaments.
Currently, the teams are competitive in the tournaments, but with a limited player base, it’s difficult for them to go all out in both these tournaments, and they have been focusing on one or the other. It happened with the Stormers last season, and now the Bulls find themselves in the same boat regarding the Champions Cup and URC.
According to Le Roux, things should change once SA Rugby concludes its own equity deal, but until then, continued dialogue should happen.
“It is a complex environment because there are many elements to it. The whole model must be discussed, you can’t argue points individually... There is a lot to be said for transparency, to understand where the medium-term and long-term funding is going.
“It is a big desire for the clubs to have a line of sight on those revenues. SA Rugby has a wide mandate. It is difficult to be at the bottom and get what’s left, rather than understand what the broadcast revenue is and the percentage we get from that. It will then be easier to invest in our businesses.”
Le Roux added that the funding model is not a fight between the bigger and smaller unions, as the picture has been painted in the past, but rather an attempt to understand the different needs of the SA rugby landscape.