Cash-strapped Msunduzi municipality, which signed a “sweet” R27m sponsorship deal with millionaire businesswoman Shauwn “Mamkhize” Mkhize's Royal AM soccer club in June, hasn't paid the club a cent yet.
Royal AM had been in a three-year deal worth R15.75m with eThekwini municipality to play their home games at Chatsworth Stadium, outside Durban in KwaZulu-Natal, when Msunduzi lured the team away in June with the big offer.
Mkhize, who is said to be worth and estimated R350-million, told the Sunday Times that in what was to be the final year in Chatsworth she was approached by Msunduzi — which owes more than R1bn to electricity and water providers — with an offer eThekwini could not match.
“Let me set things straight. We did not go looking for the deal, Msunduzi approached Royal AM. I then approached eThekwini municipality to inform them of the offer and asked them to match it or terminate. We gave them time but unfortunately they were unable to meet those requirements.”
Despite objections from opposition parties and ratepayers, the municipality offered to pay R27m over three years to move the team to Pietermaritzburg after its home team Maritzburg United was relegated.
Mkhize said soccer was supposed to unite people and she hoped critics would not politicise the matter.
But she confirmed the club is yet to receive any payment, the first of which was due in July.
Mkhize has in the past made headlines for the extravagant lifestyle. Her car collection has fast become her signature and is worth more than R55-million.
Premier league soccer teams also receive a R2.3-million monthly grant from the PSL.
eThekwini municipality told the Sunday Times there was no issue of a payment overlap to Royal AM, despite still having a year remaining on their contract.
“The contract was scheduled to end next year in June. However, the eThekwini municipality has not transferred funds to Royal AM for the current financial year which commenced in July 2023,” said spokesperson Lindiwe Khuzwayo.
“Royal AM sent a letter advising the city of their intention to move to Msunduzi municipality. However, they indicated their willingness to consider the city for other destination leveraging opportunities available. We have since sent this communication to our legal unit for advice.”
National Treasury has confirmed that Msunduzi owed Eskom R545m as of June. Umngeni-Uthukela Water said it was owed R613m and the city’s municipal manager has confirmed that it has 27 days’ cash on hand, instead of the stipulated minimum of 90 days.
But Msunduzi mayor Mzimkhulu Thebolla brushed off concerns, saying there were economic benefits to having a PSL team playing in the city.
“One of the objectives of the local government is to create a conducive environment for economic development. When Maritzburg United was still playing here ... you couldn’t find a bed in the city unless you had booked early, so the people of our city are benefiting from this, especially the tourism sector.”
He added that competing to have a top club playing games at the Harry Gwala Stadium was nothing new for the city.
“We did the same with Maritzburg United when Nelson Mandela Bay was approaching them to play their home games there. They offered them money so we had to make a counter-offer that was better.
Instead of the municipality spending money on MaMkhize's team, she should be the one donating that amount to the city, because she can afford it. We've all seen the lavish lifestyle that MaMkhize is living, a person who carries a bag that costs R50,000
— Mzwakhe Mpulo, EFF chair, uMgungundlovu district municipality
“What amazes me is that Kaizer Chiefs play three of their home games in Cape Town at R4m per game. They also play in Durban, Polokwane ... that is not for free.”
He didn't respond to questions about why the club hadn't been paid in July.
Msunduzi councillors have questioned why the city, which has been plagued by financial challenges for years and is under administration, is pumping public funds into the PSL.
IFP councillor and municipal public accounts committee chair Njini Magubane said: “The municipality’s financial situation is not stable. If they wanted to sponsor the team so much they should’ve waited at least until the situation improves.”
Mzwakhe Mpulo, EFF chair in uMgungundlovu district municipality, said they objected to the sponsorship of Royal AM, as they had done with Maritzburg United.
Mpulo said the municipality had too many service delivery challenges to consider spending so much on a football club.
“Places like Vulindlela don't have water. Edendale has electrical transformer burnouts left and right, and there are places that go six months without electricity.
“Instead of the municipality spending money on MaMkhize's team. She should be the one donating that amount to the city, because she can afford it. We've all seen the lavish lifestyle that MaMkhize is living, a person who carries a bag that costs R50,000.”
Meanwhile, the DA's Ross Strachan said they are taking the city to court over the matter and their papers are being finalised.
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