administrator

Willem Steenkamp
Cape Town

South African Rugby Union chief Oregan Hoskins has ordered rugby unions to curb "reckless spending" or face closure.

His no-nonsense warning comes after the union's annual meeting in Cape Town on Friday, where its latest financial statements were disclosed.

Saru showed a small profit of around R2 million compared to the Australian and New Zealand Rugby unions, which made healthy profits of more than R100m each.

Hoskins told Weekend Argus yesterday the poor financial discipline displayed by some of the smaller unions had to stop.

"We cannot have some of these unions spending money they simply do not have. As the mother union we will not continue to prop up these unions if they do not apply strict and sound financial discipline," he said.

The 14 unions receive around R5m in grants each year from Saru. "If they continue to spend more money than they have, they will face the same consequences any business or organisation would face when it runs out of money - they will be declared bankrupt and face closure."

Hoskins said this was an outcome that had to be avoided.

"Some of the unions have turned around their financial situation by applying strict financial discipline. Some do not have one contracted professional rugby player, and only pay their players match fees. These are steps that some of the other struggling unions will have to take to survive.

"Once such unions have shown the required financial discipline we have no doubt that business will regain confidence in them and will then support them."

Hoskins said the financial failure or even closure of some of the smaller unions was "simply too ghastly to contemplate".

"That is why we have stepped in and given this warning. The reckless spending of money they do not have has got to stop.

"Rugby is a proud sport and we cannot allow it to fail. But as long as we have maladministration, corruption and bad financial management we will not solve the problem.

"The stand that I am taking today may not be a popular one. It might not be politically correct and some may feel we should simply have plastered over the cracks.

"But I say no. We have to take a stand. We cannot keep going down a road that will lead to disaster. We cannot continue keeping everyone happy by using up all our cash reserves and end up the laughing stock of the rugby world because we cannot run our finances."