Sport

No guaranteed windfall for SA Rugby after Boks’ World Cup triumph

2019-11-17 14:26

Squad members set to coin it, but sponsors could be reluctant to pay more

When MTN SA chief executive Godfrey Motsa chose the Springboks’ visit to the cellular network giant’s headquarters during their Rugby World Cup trophy tour to announce that his company would renew its sponsorship of the team, many took that to mean SA Rugby would be in the pound seats.

But if the noises coming out of the cash-strapped organisation’s offices are anything to go by, SA Rugby is not exactly anticipating the Boks’ World Cup triumph to translate into a windfall.

There is a cautious optimism, though, that the feel-good factor could lead to would-be backers being willing to pay more to be associated with the world champions.

Long story short, the truth about whether it’ll be business as usual or if SA Rugby will be in possession of a pot of gold, is somewhere in the middle.

The only people guaranteed a windfall are the 31 Springbok squad members, who will each earn about R1.5 million in incentives after winning the World Cup.

Perhaps to outline why the predicted riches for SA Rugby are not a foregone conclusion, one has to consider the fact that there is no prize money for winning the World Cup.

Because the members of World Rugby agreed on it, there’s no winner’s cheque for becoming the best team in the world.

The said cheque is replaced by payments over the cycle between World Cups, and the winners get no more than they would have had they been eliminated in the group stages of the tournament itself.

While the loot for winning the World Cup would have come in handy for a company that has struggled financially for the past five years, an insider explained that SA Rugby took the pragmatic view that, given the fact that the Boks have won their three World Cups 12 years apart, they’d rather earn consistent stipends than gamble on a windfall from regularly winning the tournament.

But if the MTN example is anything to go by, there should be more purchase for SA Rugby among their sponsors.

The cellular network giant, which is said to pay R50 million for the right to have its name on the front of the Bok jersey, has denied this.

But it was rumoured to be keen to terminate the deal, having supposedly not got as much out of it as it had hoped.

Its about-turn suggests that there’s still something in being associated with winners.

The question is, how much more will the association cost them?

While the SA Rugby official believed that the sentiment around the Boks at the moment could mean a warm feeling towards rugby when they go to market, another source familiar with the workings of sponsorships wasn’t convinced that would necessarily make a big difference in how much they got.

“Brands are no longer about having their name on the jersey,” he explained. “Ultimately, it’s all about what the buyer is willing to pay for [it]. You still have to justify why you want a significant increase.”

The catch is that, even if SA Rugby’s partners were to pay significantly more than they currently do (FNB pays R20 million a year and Samsung pays R10 million, but Asics’ numbers have proven tricky to verify), it would still only take them back to what they were paid four years ago.

An example of that is Absa. It used to pay R90 million for the space on the front of the Bok jersey, while MTN is paying R50 million.

Even on the broadcast rights front, it appears that negotiating will also be tough, according to our sponsorship source: “They could argue that more people are watching the world champions, but the broadcasters could counter that they were paying a premium when the team wasn’t doing well.”

Where SA Rugby will definitely make more money is during the 2021 British and Irish Lions tour. SA Rugby, in partnership with the British and Irish Lions Company, have recruited UK-based sponsorship agency CSM Sports and Entertainment to jointly manage their sponsorship rights for the tour.

Apart from the possibility of engaging partners from outside South Africa, SA Rugby’s ace up the sleeve is that it has also managed to unbundle the current sponsorships from that money-spinning tour.

“The British and Irish Lions tour has been sold as a separate entity, which means the existing partners would be having a new conversation with SA Rugby. Even if they were to be retained as partners, it would be a stand-alone deal,” the source said.


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December 15 2019