Question NW2829 to the Minister of Sport, Arts and Culture
26 October 2023 - NW2829
Joseph, Mr D to ask the Minister of Sport, Arts and Culture
(1). what (a) number of (i) unions are affiliated to the SA Rugby Union and (ii) rugby unions are under administration and (b) is the name of each union in each case. (2). whether the rugby unions that are placed under administration are updated with progress and financial statements; if not, why not; if so, (a) how regularly and (b) who are the specified persons responsible for the updates. (3). whether the financial status of the Western Province Rugby Football Union has improved since it was placed under administration; if not, why not; if so, what are the relevant details. (4). what are the latest developments with regard to hosting a rugby world cup in future? NW3244E
Reply:
1(a). The SA Rugby Union (SARU) has confirmed that they have (i)15 Rugby Unions and (ii)1 of these is under administration.(b) In the Western Cape (Western Province Rugby Football Union, Boland Rugby Union, South Western Districts Rugby Football Union; In the Eastern Cape - Border Rugby Football Union and Eastern Province Rugby Union; in KZN - KwaZulu Natal Rugby Union; Free State- Griffons Rugby Union and Free State Rugby Union; in Gauteng - Golden Lions Rugby Union, Blue Bulls Rugby Union and Valke Rugby Union; In NC Griqualand West Rugby Union; in NW The Leopards Rugby Union; in MP Mpumalanga Rugby Union and in LP Limpopo Rugby Union.
(2). Western Province Rugby Football Union is under Administration. The appointment of an administrator, in terms of Clause 29.5 of the SARU Constitution, was to stabilise the Union’s governance and operational business and was not meant to have any
direct influence on the on-field rugby affairs. The appointed administrator, reporting to the CEO of SA Rugby Union, is responsible for regular updates into the governance structures within SA Rugby Unions as well as the representatives of the Western Province rugby clubs.
The tabling and approval of annual financial statements is the competency of the Western Province Rugby Union General Council. The annual financial statements backlog that existed prior to placing Western Province rugby under administration is being addressed by the administrator and the external auditors with the ability to operate as a going concern being a significant audit technical matter to resolve before such accounts are presented to the general council.
(3). At the time that SA Rugby Union had taken over as administrator, Western Province Rugby Football Union could not fund their operations due to significant liquidity constraints. In addition to this the refinancing of existing borrowings, where fixed owned properties belonging to Western Province Rugby Football Union were provided as security, meant that any default to the bondholder would result in the available equity in such properties being at risk/lost.
Amongst the many challenges faced as administrator was renegotiating a new anchor tenant agreement for the use of the Cape Town (DHL) stadium which resulted in more favorable commercial terms being reached and contributing towards the overall goal of financial sustainability. The ability for Western Province Rugby to continue its operations and the Stormers winning the inaugural international United Rugby Championship and subsequent finalist the year thereafter, meant that whilst under administration the brand value of Western Province rugby was not only protected but also enhanced to exploit commercial opportunities into the future. The potential to realize equity from the encumbered immovable properties still exists due to ongoing negotiations with the property bondholder.
(4). Unless the costs associated with bidding and hosting of a Rugby World Cup are guaranteed by the public and/or private sector, SA Rugby Union will not have the financial resources to bid for and host such an event into the future. World Rugby has allocated the hosting of the next World Cup in 2027 to Australia and 2031 in America. The next opportunity to Bid, subject to funding and support will be once World Rugby opens the Bidding process for subsequent World Cups post 2031.
THANK YOU