Boxing SA on governance & promoters’ association disputes in Eastern Cape

Sports, Arts and Culture

13 September 2016
Chairperson: Ms B Dlulane (ANC)
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Meeting Summary

The Committee received a briefing from Boxing South Africa (BSA) on their governance and financial performance for the 2015/16 financial year, and a progress report regarding the Boxing Promoters’ Association (BPA) disputes in the Eastern Cape.

Highlights of the programmes undertaken in the 2015/16 financial year were the “Boxing is Back” programme; the ‘women in boxing’ programme; more than 1 000 licensees during the year; and more than 80 tournaments sanctioned. The board of BSA had been encouraged that it had increased the number of women licensees, in line with transformation.

BSA had budgeted that they would generate R1.8 million, but had achieved only R623 000. Challenges were that BSA did not have the tools to force promoters to declare how much money was being made. Sanctioning fees meant that the more tournaments they sanctioned, the more revenue BSA could gain. Licence fees were fees paid by licensees, depending on the category of their licence, and in recent years, the fee had remained the same, as increasing the tariff would have meant that most of the licencees would not have been able afford the fee. BSA was heavily dependent on Department of Sport and Recreation (SRSA) grants. Grants made up the majority of BSA’s funds. For the 2025/16 financial year, it had received R15 million from SRSA.

BSA was commended for its ‘women in boxing’ programme, which had received R7.9 million from the National Lottery Board. This had been directed at the participation of women in tournaments and capacity-building workshops. Only female promoters, boxers and officials were allowed to participate in tournaments.

Members asked about the role of promoters, and how BSA could ensure that they paid the boxers on time. What sort of relationship did it enjoy with the SA Broadcasting Corporation? What was the status of the disciplinary proceedings against the suspended top management of the Association? Members said they were pleased that the dispute in the Eastern Cape had been resolved, and indicated they were generally satisfied with the BSA’s performance.

 

Meeting report

Boxing SA 2015/16 performance
Mr T Leiaka, Chief Executive Officer (CEO), Boxing South Africa (BSA) said that the financial year of 2015/16 had the objective of placing boxing at the heart of nation building and social cohesion. There had been an increase in the number of licensees, from 901 to 1 085, during the year. There had been a return of boxing to the screens of the public broadcaster, and a roll out of women in boxing development programmes supported by the National Lotteries Commission.

The seven-member board appointed by the Minister of Sports and Recreation on 18 May 2014 continued to function in a coherent and optimal manner, as articulated by the mandate.

BSA’s situational analysis indicated a need for BSA to reposition its resource allocation more towards its core business than support services. It needed to strengthen its legal capacity to enable better responses to legal challenges. Reinstating boxing to its former glory as the people's sport was BSA’s key priority. It was working to strengthen its training and capacity building. It needed to develop the boxing sector’s long-term participants’ development plan, as outlined in the introduction of the national plan of the Department of Sport and Recreation (SRSA).

In the service delivery environment, BSA had prioritised building the capacity of the organisation, increasing the awareness of promoters about compliance requirements, reviewing and developing policies, developing internal systems for enhanced operations, and aligning the organisational structures with the strategic plan, and maximising efficiencies.

Highlights of the programmes undertaken in the 2015/16 financial year were the “Boxing is Back” programme; the women in boxing programme; more than 1 000 licensees during the year; and more than 80 tournaments sanctioned. The board of BSA had been encouraged that it had increased the number of women licensees, in line with transformation.

The women in boxing programme had received R7.9 million from the National Lottery Board (NLB) and two-thirds of the allocation had been used to deliver the first and second phases of the programme in Gauteng and KwaZulu-Natal. Only female promoters, boxers and officials were allowed to participate in the tournaments.

BSA had three programme areas. These were governance and administration, boxing development and boxing promotion.

Programme one, dealing with governance and administration, had the strategic objectives of strengthening governance and oversight, improving administrative capacity and promoting stakeholder engagement. It had been designed to provide leadership for BSA and provide general and normal administrative functions that were necessary in modern organisations.

A number of BSA senior managers were on suspension during the 2015/16 financial year, and this had restricted the organisation from carrying out its mandate optimally. The reigning leadership of the organisation had worked tirelessly to resolve the suspension issues involving managers and to expedite disciplinary proceedings where applicable. The position of the CEO and CFO had been filled, recruitment plans for the director of operations were been finalized, and middle management and lower positions had been filled by September 2015.

Programme two dealt with boxing development. Its purpose was to ensure compliance with the key aspects of the Boxing Act and its rules and regulations, and to enforce their application where non-compliance was observed. Sub-programmes included licensing, sanctioning and ratings, licensees’ training and development, and regulations compliance and enforcement.

A strategic objective had been to achieve 250 licensees trained and developed, but they were able to achieve only 160 licensees due to limited resources and the non-attendance of licensees. The second objective was to enforce compliance, where they had planned to conduct 90 inspections, but had been able to achieve only 75. The third objective was women in boxing, where the target was to achieve 60 women licensed to operate in various aspects of boxing. BSA had achieved more than 60 women being licensed. The fourth objective had been to conduct 12 ratings, and this had been achieved. The fifth objective was to achieve national coverage of boxing matches, where the target was 900 licences to be issued, and BSA had managed to achieve 1 054 licences issued. The final objective was increasing the number of associations assisted, and although the target was 20 new associations and they had not succeeded in assisting any associations.

Programme three dealt with boxing promotion. The purpose was to promote and market boxing to improve its public profile, to increase its brand value, as well as to coordinate premium BSA events across the country. Sub-programmes were marketing and branding, communication, events coordination, and revenue generation.

On the financial performance of BSA, Mr Thabang Moses, Chief Financial Officer (CFO), said that the Auditor General (AG) had raised an issue in 2015 with regard to issues not included in their books. With regard to sanctioning fees, these had been levied seven days after the execution of a tournament, and the only way BSA could confirm the sanctioning fees was to have an affidavit to force promoters to declare how much money was made on a fight.

BSA had budgeted that they would generate R1.8 million, but had achieved only R623 000. Challenges were that BSA did not have the tools to force promoters to declare how much money was being made. Sanctioning fees meant that the more tournaments they sanctioned, the more revenue BSA could gain. Licence fees were fees paid by licensees, depending on the category of their licence, and in recent years, the fee had remained the same, as increasing the tariff would have meant that most of the licensees would not have been able afford the fee. Interest received on investments was not a priority source of revenue. BSA was heavily dependent on SRSA grants. Grants made up the majority of BSA’s funds. For the 2025/16 financial year, it had received R15 million from SRSA.

Expenditure incurred by BSA for personnel, administration, depreciation and amortisation, impairment losses, financial costs, leases, vehicle and general expenses had amounted to R21.1 million.

Dispute resolution in Eastern Cape

Mr Leiaka said that BSA had assisted the Boxing Promoters’ Association (BPA) in the Eastern Cape to hold its annual general meeting (AGM) in June 2016. A major breakthrough of the AGM was that it had been attended by members who had previously positioned themselves with a parallel structure, thereby bringing an end to the issues of parallel structures of promoters’ associations. At issue had been the funding allocation for promoters from the government. BSA had felt the need to be involved in the grading of promoters, and promoters in the Eastern Cape needed to be allocated funding according to their development level. The AGM had elected a new executive committee, which included members from the previous parallel structure.

The way forward from the AGM was that all disputes in the BPA in the Eastern Cape had been resolved. The challenge now was to work with the newly elected leadership to attend to the administrative issues raised at the AGM. Another challenge was to proceed according to the BSA annual performance plan, to assist with the establishment of an association of other licencees, officials, boxers, trainers and managers.

For this financial year, BSA had adopted a turnaround strategy termed ‘Business Unusual.’ The key pillars were to develop a business model for BSA; setting principles to drive the development of a new organisational architecture for BSA; and dealing with the inherited crises which presented themselves at three levels -- strategic, operational and financial. The board had conduct a draft budget to ensure the alignment of the strategy to resources, as well as the alignment of activities to strategic objectives.

Discussion
Mr D Bergman (DA) commended BSA for being honest with their presentation. He asked how the bouts were televised, and if each province was allocated a match, or some sort of system to that end. In most cases, promoters were the players and boxers were the pawns, and that BSA needed to stipulate what the role of the promoters and boxers were to the relevant parties. He asked how promoters were appointed for an SABC bout, and what the criteria were.

Ms B Dlomo (ANC) asked how far BSA was with aligning their legislative mandate with the requisite sources of finances. What did BSA do to recruit women into boxing, especially in rural areas, and also from which provinces?

Ms B Abrahams (ANC) asked that with some of their vacancies, they should look to include people with disabilities. She asked why it was so difficult to receive sponsorships. What criteria had been used in choosing Gauteng and KwaZulu-Natal?  Were there other methods to compel promoters to declare their funds, instead of relying only on affidavits? When BSA was referring to personnel costs, was that salaries?

Ms D Manana (ANC) asked how BSA had assisted the South African National Boxing Organisation (SANABO) when they were experiencing problems with the provinces during the staging of tournaments. Was there a strategy to reprimand promoters who did not pay boxers on time? How had BSA benefited from Floyd Mayweather’s visit to South Africa?

Mr P Moteka (EFF) asked what BSA was doing to make sure boxing was played across the whole country, and not just in select provinces. He commended it for resolving the issues in the Eastern Cape.

Mr M Malatsi (DA) asked what internal measures were in place to deal with the same problematic promoters over and over again. What was in the financial contribution to the respective provinces? He said that there was a weakness in the training of officials and asked what measures were in place to improve the situation.

Mr S Ralegoma (ANC) was concerned about BSA becoming the contractor to promoters, since it was an arrangement between SABC and the department of SRSA. BSA needed to work toward keeping this relationship with the SABC, and not to lose the contract. He was glad the issue of the Eastern Cape had been resolved. Funding had been the main issue, and an AGM alone could not have resolved the problem.

The Chairperson thanked Ms Muditambi Ravele, Chairperson, BSA, and her delegation for the thorough presentation, and for resolving the issue in the Eastern Cape. She was pleased with the performance of the BSA overall.

BSA response
Mr Moses said the total amount for personnel fees was a broad figure which covered a range of figures. These could be indicated to the Committee in a breakdown, should they be requested.

Mr Leiaka said that no disciplinary cases had been completed yet, but some were in the process of being completed.

On stake holder engagement, BSA would assist boxers, especially those who ran as individual associations.

BSA had positioned itself to engage in discussions with broadcasters so that coverage of matches was distributed nationwide.

The readiness of provinces played a role in which provinces got to host major events.

With regard to women’s recruitment, BSA had not yet developed a system that covered the whole country.

In the next two months, BSA would have filled the senior positions. The lower level positions were dependent on BSA’s needs.

Mr Leiaka said tournaments were conducted through promoters, and some of the promoters brought their own sponsors. Promoting boxing on high end initiatives was too expensive for some of the low level matches that did not even end up being televised.

Training needed to be strengthened.

The issue of payment of boxers needed to be looked at, so that boxers could be rescued.

Mr Khulile Radu, BSA board member, said that the issues dealt with at the AGM in the Eastern Cape needed to be looked at with regard to funding, so that they did not arise again. He said that BSA needed a lot of interaction with the Portfolio Committee on sport, as the Committee could assist.

Ms Ravele said BSA needed to start putting up programmes, since the Committee had expressed its willingness to assist the organisation. She said that the board of BSA was engaged in employing its own internal legal team, and that would assist in cutting costs when it came to legal fees. BSA was reviving the boxing awards at the end of the financial year, and this would encourage licencees to be compliant and have a goal to work towards.

The Chairperson said that the Committee could not assist municipalities if it did not know what the model being used there was. She requested information from BSA on the models being used. She was not satisfied with the Free State having only three promoters, but was happy that one of the three was a woman.

Consideration of Committee’s report on SRSA’s fourth quarter performance
The Committee had just received the report at the meeting, and had no prior knowledge of its contents. Members suggested that they read it at home first and consider it at the meeting on 14 September. 

Mr Malatsi proposed that they carry it over to 14 September, and Mr Bergman seconded the motion.

Consideration of minutes
The minutes of the meetings on 20 April, 23 August and 6 September were adopted.

The Committee agreed to discuss its provincial oversight visit and flight bookings on 14 September.

The Chairperson adjourned the meeting.
 

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