The gnashing of teeth over South Africa’s participation in European competition may soon subside, if not grind to a halt.
South African teams have felt the pinch and handicapped playing in the Champions Cup and Challenge Cup (EPCR competitions) and, to a lesser extent, United Rugby Championship (URC) due to monetary constraints and excessive travel.
However, the pay-to-play process SA Rugby has been subjected to since joining the URC in the 2021/22 season draws to a close in June, and negotiations about the 25% stake they will take in that competition will wrap up at the end of next month.
It should herald a much rosier outlook for the governing body’s coffers and its teams in European competition. And that moment cannot come soon enough.
Though SA Rugby contributes 60% to the URC’s revenue, it has been stumping up vast amounts to play in that competition. It had little choice but to find viable and vibrant competitions after they were, as one elected official put it, “unceremoniously dumped from Super Rugby”.
Share of profits
“We are paying our way into the competition. When we convert we become shareholders and we will share in the profits from broadcast rights and sponsorships. That is a massive benefit,” said SA Rugby CEO Rian Oberholzer.
Apart from sharing in future profits of the URC and the EPCR competitions, SA Rugby will also make significant savings.
When South African teams travel abroad, it comes at back-breaking cost. “It costs between R3m and R5m per trip per team,” said Oberholzer.
In fact, the South African Rugby Union’s 2023 (latest) annual report states “expenditure of R385m attributable to URC and EPCR participation and team travel, R347m funding to member unions, player image rights and insurance of R124m and direct management and team Rugby World Cup costs of R133m.”
Oberholzer could not put a figure to how much SA Rugby would benefit annually from becoming full members of the URC, and by extension the EPCR, as that is still under negotiation. “We are still debating and arguing the numbers our conversion will cost.”
When we convert, we become shareholders, and we will share in the profits from broadcast rights and sponsorships. That is a massive benefit
— Rian Oberholzer, SA Rugby CEO
Huge savings
What is clear, though, SA Rugby will make significant savings in its running costs, especially its travel bill for those tournaments.
Exorbitant travel costs partly explain the lack of alacrity with which some of the local franchises approached their away knockout matches in the less prestigious Challenge Cup.
Winning the Challenge Cup is one way of smoothing your path into the Champions Cup but that can also be achieved by qualifying in the top eight of the URC. South Africa’s teams have largely opted to place their eggs in that basket.
Having more cash to distribute among their participating teams isn’t the only benefit for SA Rugby. Though the Champions Cup has a predetermined destination final, South Africa will become eligible once their full membership is consummated. South Africa were precluded from hosting semifinals under the initial pay-to-play agreement.
Hosting a Champions Cup final holds significant economic benefit to the host city. In a letter drafted to sponsors SA Rugby explained becoming full members will “level the playing field as more resources will be channelled to the EPCR competitions”.
At a time when South African teams’ participation in the EPCR competitions were questioned the letter served to put minds at rest. In the pay-to-play phase SA Rugby prioritised the URC.
Transition period
“This strategic emphasis has naturally impacted our ability to fully prioritise the EPCR competitions during this critical growth phase. This strategic emphasis has naturally impacted our ability to fully prioritise the EPCR competitions during this critical growth phase,” the letter stated.
“Fortunately, by June 2025, we will transition into full shareholders of the URC. This milestone will allow us to enjoy the same benefits as our opposition, levelling the playing field and enabling us to channel additional focus and resources into our EPCR campaigns.
“We remain committed to growing and improving our performance in the years to come, as we continue to integrate into the European rugby landscape and build a foundation for long-term success.” the letter stated.
Having more cash doesn’t mean the Bulls, Sharks, Stormers and Lions can break the bank in the way they recruit. They will still have to adhere to a player salary cap and they will still be required to box clever in the way deploy their resources across different competitions.
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