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Transformation in South African Rugby: Ensuring Financial Sustainability

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Transformation in South African Rugby: Ensuring Financial Sustainability Transformation in South African Rugby: ensuring financial sustainability Dissertation by Eduard Coetzee (CTZEDU001) Submitted in fulfilment of the requirements for the degree MPhil Inclusive Innovation Graduate School of Business University of Cape Town Supervisor: Prof Martin Hall December 2016 University of Cape Town The copyright of this thesis vests in the author. No quotation from it or information derived from it is to be published without full acknowledgement of the source. The thesis is to be used for private study or non- commercial research purposes only. Published by the University of Cape Town (UCT) in terms of the non-exclusive license granted to UCT by the author. University of Cape Town UNIVERSITY OF CAPE TOWN GRADUATE SCHOOL OF BUSINESS DECLARATION v I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend that it is your own. v I have used the APA referencing convention for citation and referencing. Each significant contribution and quotation from the works of other people has been attributed, cited and referenced. v I certify that this submission is all my own work. v I have not allowed and will not allow anyone to copy this essay with the intention of passing it off as his or her own work. v I have run my paper through a plagiarism check. v Signature Date: 10 December 2016 8 November 2016 i TABLE OF CONTENTS Declaration ........................................................................................................................ i ABSTRACT ......................................................................................................................... v GLOSSARY OF TERMS AND ABBREVIATIONS ...................................................................... vii TABLE OF FIGURES ........................................................................................................... ix LIST OF TABLES ................................................................................................................ ix RACE TERMINOLOGY ........................................................................................................ x Acknowledgement ........................................................................................................... xi Chapter 1: Introduction ................................................................................................... 1 1.2. Chronological timeline of important events in the history of South African rugby ........ 3 1.2.1 Broad history of rugby in South Africa from 1823 through until 1990 ..................... 5 1.2.2 Rugby in Coloured communities ................................................................................... 6 1.2.3 Rugby in Black communities ......................................................................................... 8 1.3 Rugby in contemporary South Africa ............................................................................. 9 1.4 Professionalism: after 1996 ........................................................................................... 13 1.4.1 ‘Shamateurism’ .................................................................................................................. 13 1.5 Problem statement ......................................................................................................... 15 1.5.1. Rugby as a business ........................................................................................................... 17 1.5.2. Transformation in rugby ............................................................................................. 18 1.5.3. Players leaving South Africa to play overseas ............................................................ 21 1.5.4 Celebrity management in rugby .................................................................................. 22 CHAPTER 2: LITERATURE REVIEW ....................................................................... 25 2.1. Introduction ...................................................................................................................... 25 2.2. Transformation ................................................................................................................. 29 2.3. Rugby player exodus ......................................................................................................... 31 2.4. Rugby as a business ........................................................................................................... 32 2.5. Overview ........................................................................................................................... 33 CHAPTER 3: METHODOLOGY ................................................................................. 35 3.1. Introduction .................................................................................................................. 35 3.2. Research section one: The current situation ..................................................................... 36 3.3. Theoretical framework .................................................................................................. 37 3.4 Research second section: the business plan ................................................................... 38 3.5. Data Analysis ................................................................................................................. 39 CHAPTER 4: THE SHARKS ........................................................................................ 41 4.1 Introduction to The Sharks ........................................................................................... 41 4.1.1 Shareholders ................................................................................................................ 42 4.1.2 Sponsors .............................................................................................................................. 44 4.1.3 Employees ........................................................................................................................... 45 ii 4.1.4 Players ................................................................................................................................. 46 4.1.5 Inter Companies ................................................................................................................. 47 4.1.6 Season ticket-holders ......................................................................................................... 48 4.1.7 Suite-holders ....................................................................................................................... 48 4.1.8 Supporters .......................................................................................................................... 49 CHAPTER 5: BUSINESS PLAN ................................................................................... 52 5.1. Introduction ...................................................................................................................... 52 5.2. Elements of the business plan ............................................................................................ 55 5.2.1. Revenue streams ................................................................................................................ 56 5.2.1.2 Suites ................................................................................................................................. 57 5.2.1.3 Test Match ........................................................................................................................ 58 5.2.2 Three-year plan ............................................................................................................ 60 5.2.2.1 Risk and Compliance ................................................................................................ 60 5.2.2.2. Stadium Eventing ....................................................................................................... 62 5.2.2.3. Monetizing social media and fan engagement .......................................................... 63 5.2.2.5. Development and transformation .............................................................................. 65 Development funding ............................................................................................................... 67 Multi-tiered asset based development program ...................................................................... 69 5.2.2.6 Financial Plan ............................................................................................................ 70 5.2.2.7 Revenue projection model .......................................................................................... 73 International content ............................................................................................................... 74 Team performance .................................................................................................................. 75 Brand Loyalty .......................................................................................................................... 79 Determining the budget for 2017 using the projection model ................................................. 80 5.2.2.8 Current reality business plan .................................................................................... 83 5.2.3. Financial Plan .................................................................................................................... 84 5.2.4. Balance Sheet Recapitalization .......................................................................................
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