AUDIO: Professional model in South Africa is 'bankrupt'
EXCLUSIVE: The picture painted by the provisional liquidation of the Border Rugby Union is just a thumbnail of a large, dysfunctional system.
This is the gist of the reaction of Piet Heymans, the Chief Executive Officer of the trade union Sport Employees Unite.
Heymans was speaking, exclusively, to rugby365 in the wake of confirmation that the BRU was placed under provisional sequestration by the High Court of South Africa (East London Circuit Local Division).
The court ruled in the favour of the South African Rugby Players Association in its action against the BRU.
Heymans called it a 'sad day' and said it is 'confirmation of the financial stress and challenges that many provinces are facing'.
"[It is a] clear sign that the commercial model for professional rugby [in South Africa] is not working and needs to be reviewed and addressed as a matter of urgency," Heymans told rugby365.
He pointed to a number of examples where major and minor unions ran into financial trouble in recent years.
The Blue Bulls Company went through a retrenchment exercise late last year, the Leopards went through restructuring, the Eastern Province Rugby Union was liquidated in August 2016 and has still not recovered, while Western Province liquidated their commercial arm in December 2016 and is still engaged in a protracted legal battle over the liquidation.
The abominable situation does not end there.
The national body, the South African Rugby Union, has been running at a loss for years. They showed a loss of ZAR23.3-million in 2016 and reported a loss of ZAR33.3-million for the 2017 financial year.
What makes the Border situation so desperate is that the provisional liquidation will have severe consequences for players and staff.
There will be no salaries paid this month - for players or staff.
"I will have an impact on the domestic Challenge Cup, provincial competition," Heymans said, pointing out that Border is unlikely to field a team in a tournament that gets underway later this week.
"It is of the utmost importance that the liquidator is appointed so that we can - together with SARU and SARPA - engage with him.
"We must consider and discuss workable solutions. We must ensure that rugby can be played in that province.
"The financial problems of the BRU appears to have been building up over the past few months, with the BRU unable to meet its financial obligations - with its expenditure more than its income."
The lack of leadership and management of the BRU during this time have also come under scrutiny and criticism.
"We find it unacceptable that the elected leadership of the BRU did not address this developing crisis of which they were aware of.
"Furthermore, they did not communicate to the staff and did nothing to deal with this serious challenge.
"Despite verbal promises to oppose the liquidation, the elected leadership did nothing to intervene or address the situation.
"Thus, the elected leaders must take a big part of the blame for this undesirable situation that has now materialised," Heymans added.
The employment contracts of all staff and players have been suspended in the wake of the liquidation, which has resulted in uncertainty and worry.
"Our members face financial hardship come the end of the month.
"The coaching staff have been preparing the players for the first clash of the season against Boland in the Challenge competition this weekend in Port Elizabeth, but this has put this fixture in doubt."
By Jan de Koning