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Saturday, February 04, 2006

 

General discussions: Rugby tickets, why you pay more than soccer fans.


It is interesting to note that whilst Springbok fans were forking out about R350 per ticket for the Bloemfontein test against Ireland in June 2004, Bafana Bafana fans paid R20 to watch their heroes in the same stadium a week earlier.

Perhaps it is also instructive that whilst the Boks stand at number 2 in the world, Bafana are slip sliding away down the hill.

Is it possible to reconcile the imperative of taking the game to the masses whilst remaining commercially successful?

Is it possible to remain a world class team in the face of crippling financial losses?

I know what my opinion is but I can't claim to know the answers for a fact.

It is interesting to compare the contrasting approaches between South African soccer and rugby.

It cost the Cheetah Company R4 million to host that test, additionally they had to pay VAT of 14% on the sale of tickets, amounting to approximately R800 000. The cost of putting on the event in terms of marketing, security and personnel was a further R800 000.

Therefore the Cheetahs had to fork out R5.6 million rand for the pleasure of hosting a test match.

As Harold Verster told News 24's Schalk Jonker at the time, "This means that if you charge a standard R200 per person, you would need 28 000 people through the gate. That's just for us to break even."

So why does it cost a host union so much money to put on a test?

Well, they have to guarantee SARU a fee, the fee depends on the opposition and, thus, a team like Ireland attracts a guarantee fee of around R4 million whilst the All Blacks, England, France or Ireland would cost between R5.5 million and R6 million.

What this means is that when SARU take the game outside the traditional powerhouses they cannot expect the host union to pay these enormous sums and therefore have to make up the budget shortfall elsewhere.

SA Rugby's commercial manager Kyle Nel said at the time that the same model is used in Australia and England.

"We don't take that money and put it in our back pockets," Nel told News24. "There are a lot of expenses attached to a tour like this and SA Rugby has to cover all those costs.

"We're hosting the Irish for three weeks and we basically have to pay for everything. We even pay for the water they drink.

"Last year we took the Argentina Test to Port Elizabeth, as part of Sarfu's policy to take the game to the people. It would be unreasonable to expect a small union like that to come up with millions of rands for a guarantee, so we said they could pay less. But, now we have to get that money from the other bigger provinces."

News24 asked Nel why money from sponsors and TV rights could not be used to cover these costs, Nel said it was too complicated to explain.

By contrast, soccer's approach is the complete opposite.

Clive Mtshiselwa, the South African Football Association's marketing manager, told News24, "We have to keep in mind that the most of our supporters fall in the lower income market and a lot of them are unemployed.

"It would be inhumane to ask high prices for these people to see their heroes. It is our mission to take soccer to the people and you can't do that if you pricing structure is at a premium," said Mtshiselwa.

"It would cost us about R3m to host England for example. Safa and our sponsors pick up that tab. We only use gate money to cover minor expenses like security, cleaners and things like that.

"Usually the municipality says 'Okay, we'll cover the costs of getting the stadium in order'."

"But we never charge them a lump sum to host internationals. In fact, all the international matches we stage, we stage at a loss."

Now whilst I am full of admiration for the approach of SAFA, I just can't get rid of the image of Bafana Bafana sliding away into footballing obscurity whilst the Springboks challenge the All Blacks for number one spot in the world.

It also begs the question, with South African soccer in the red to the tune of tens of millions of rands, are they spending more money than SARU in creating jobs, infrastructure and opportunities for the disadvantaged in society? Somehow I doubt it. Luckily for SAFA and South African soccer, they have the money spinning 2010 World Cup to look forward to.

That will be the fresh start they need, time will tell if it is used as a clean slate or a fresh start to begin the plunder all over again.

In the interim, is it possible to charge R20 for international rugby tickets and remain at the top of the tree? I don't think so.

Information source: News24.com
Comments:
hell...

very interesting and there is so much i want to respond too.

ras i do not fully agree with you.

my first question is, if soccer also has to pay for england to come here and pick up the tab of R3 mil, why is rugby more expensive in the first place than soccer being the no.1 sport in the world?

who determines these "capped" figures as kyle nel explained ireland costs them R4 mil which the union must gaurrantee?

fair enough if we host a country we must pay for quite a lot. but surely we do not pay for EVRYTHING?

if we take the ireland tests as mentioned, you had bloem and CPT, thus those unions had to pay SARU R 8 mil.

now it seems a bit odd that even if we host 30 guys for 3 weeks that it would amount to R 8 Mil? surely it wont ever be that much?

even if we have to pay for their water...

lets look at accommodation.

30 guys staying in a hotel that costs, lets say R800 per person per night sharing...

30 x 21 (3weeks) x 800 = R 504 000

half a mil.

plane tickets

30 x 2000 (ticket from bloem to CPT) = R 60 000

okay now lets give them another half a mil as an entertainment allowance and for food for game drives, excursions, etc. (btw i am sure they bring their own dieticians and shit that works out menu's for them, like our guys take their own powerade where ever they go)

shit lets budget another R300k for booze and entertainment.

shit we can even pay for their tickets home too.

30 x 4000 = R120 000

now we got half a mil for accommodation

half a mil for entertainment

R60K for domestic flights

R300K for this and that (you know the water)

R120K for their ticket home, shit lets double it and pay for the trip here too so make it R240K

thus

R500K + R500K + R60K + R300K + R240K = R 1.6 mil....

R8 Mil - R 1.6 mil = R 6.4 Mil

sure there may be things i could have missed, but what the hell else can we pay for when touring teams come over??????

i am positive certain costs are covered by the team themselves....????

the hotel JW wanted to stay in when we toured France last year, surely if the bill is high, the frenchies will turn around and say pay your own freakin bill????

"we dont put the money in our back pockets...." pull the other one.

and on the question about not explaining why tv rights money cant be used sighting it is too complicated....what are you pulling a mallet kyle? are we too stupid to understand just exactly what the f@#k we are paying for?

at the end of the day, the R350 that we pay, we surely have a righ to know what SARU does with our money? other than buying water that is......

too complicated my ass.

so ras,

although i agree that we need to make sure that everything is taken care of and that we produce events of the highest quality, i still believe we are paying too much. R20 is a bit ambitious even for em i agree, but just making quick calculations we can still stage world class events and only pay R200 a test ticket.

why dont the kyle nel's of this world for a change explain exactly how our money is used????

or will we find out about bonusses we are not supposed to know about
 
"Usually the municipality says 'Okay, we'll cover the costs of getting the stadium in order'."

Is it fair to say Ras, that in actual fact we as taxpayers are subsidising these matches? Then why can't self the same Munsipality then pay for rugby or soccer development in the townships? Then we are growing the game and i wont mind if tax money is allocated for such purposes.
 
another question that springs to mind here is how the leopards will then afford the AB test allocated to them??????

how much is SARU contributing?????

wont it then run at a loss?????

how much will the ticket prices be????

because surely, if you want to 'take the game to the people' as they put it, playing big matches in 'rural' or smaller areas of SA is not going to help if the people they want to attract still cannot afford the tickets?????

as the guy mentioned RE the soccer, the majority of their supporters are the mid to lower to no income group.

and lets not mince our words here, the aim is to increase the number of black and coloured supporters isnt it?

now what will happen with the rustenburg test is simply, all the white folk from JHB and PTA will make the trip up to rustenburg to go watch the match. the number of black supporters will NOT increase if they cannot afford to pay for the tickets.

so what exactly is the point of taking the game to the people then?????
 
And to think they fired a very successful coach due to his questioning of ticket prices.  
As far as I know, SARU have to pick up all the costs of an incoming tour. Including flights in and out.

Obviously when we travel the host union does likewise.

On average you can probably say that SARU get a guaranteed payment of R5m per test. So, 6 home tests will guarantee SARU R30m per annum.

Now, as Nel says, even though he used unfortunate terminology, it doesn't go into SARU's back pocket.

It has to pay for all the incoming teams costs and whatever is left over goes to SARU's general budget.

Rustenburg is a 30 000 seater so, using Verster's analysis, once they sell 20 000 tickets at R200, they break even on the SARU guarantee. If they sell the other 10 000 tickets they have R2m to cover costs like VAT (R840k), security etc.

If they are clever and creative, using volunteers as much as possible, they can still get a nice little windfall and SARU lose nothing either.

So, the Leopards should gain, SARU lose nothing. It's the bigger host union with a 50 000 seater or 60 000 seater that loses out.

In fact, think about it - the taxpayer subsidises soccer to put on international matches.

By a huge contrast, rugby pays at least R840 000 INTO the tax coffers for every match staged.

That's before VAT on food, drinks and merchandise is calculated - which will be absolutely minimum at soccer and very large at rugby.

So, in effect rugby pays the government over a million rand each time a test is played in SA in direct match day VAT takings.

But the government pay soccer to stage matches.

Is that fair? Is it counted when the government tell soccer it is not okay to lose whilst telling rugby it is okay to lose?

Is it counted when SARU are accused of not doing enough to spread the game?

It is high time that rugby stopped cowering behind the bushes and got an actuarial team in to quantify exactly what rugby's contribution to the nations coffers is. You'd be bowled over.

It's BIG business - that's why it shouldn't be left in the hands of amateurs.
 
Great argument Ras!!!  
Not even a whisper.....  
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