CEO’S REPORT

CEO’S

REPORT

EUGENE HENNING

ON 28TH FEBRUARY 2020, MYPLAYERS SENT ITS FIRST OFFICIAL COMMUNICATION TO PLAYERS ABOUT COVID-19. AT THE TIME, THE CORONA VIRUS HAD BEEN DETECTED IN 30 COUNTRIES, PRO14 FIXTURES IN ITALY HAD BEEN JEOPARDISED, AND THE SUPER RUGBY MATCH BETWEEN THE SUNWOLVES AND BRUMBIES HAD BEEN CALLED OFF BY THE JAPANESE GOVERNMENT.

While we monitored what was happening in other parts of the world, this outbreak emanating from China still felt like a distant reality. A week later, South Africa confirmed its first case. Fast forward 12 months, and we find ourselves in the grips of the worst and most disruptive pandemic the world has experienced since the Spanish flu of 1918. By November 2020, only nine of the world’s 195 countries had not yet reported a single case.

The reality, one we are all too familiar with by now, didn’t pass anyone over. I remember being on a telephone call with our player representative colleagues in New Zealand and Australia in March. We were planning on co-producing a video featuring many of the Southern hemisphere’s most prominent players encouraging people to adhere to Covid-19 health and safety protocols. It was supposed to be a light-hearted clip that had the potential to go viral. News platforms were publishing video clips explaining how one should actually be washing your hands – such a rudimentary task.

While we were drafting the script for our own video, the virus clawed its way into more countries, provinces and individual lives. By the time we would have been ready to click “Publish”, our video would have been outdated, and honestly, our light-hearted approach felt almost insensitive. People were dying, families were losing loved ones, vaccines were only expected to be ready within 12 to 18 months, and across the globe, countries adopted different strategies to counter the spread of Covid-19. Eventually, many of the most touted grant strategies failed miserably. Washing our hands seemed like the only thing we really could do. The only thing we knew how to. Could we have been better prepared for an eventuality such as Covid-19? I’m no doctor, but I doubt it. In the end, every person, business and industry could only do what they felt were the best things to do at the time. Rugby was no different, and as an industry – as with all others – we had to make tough and unpopular decisions based on the facts and forecast we had at our disposal.

Undoubtedly, the most impactful decision taken by the South African rugby industry as a whole was to reduce the salaries of all players and permanent employees working in rugby. The decision wasn’t an easy one to take, accepting it was even harder, and living with the consequences felt unbearable at times. Besides not receiving our full salaries and being unable to play rugby, we were confined to our homes, we missed birthdays and family get-togethers, weddings had to be called off, and young parents feared bringing a child into this strange world for which most postWW II generations had no prior reference or coping mechanisms. Financial and mental hardship and an increased sense of uncertainty about the future entered our homes, and for months, we could only wonder when normality would again reflect in our lives and bank balances.

However, amidst all the uncertainty, the South African rugby industry pulled together in a remarkable and unprecedented collective effort to safeguard the industry against complete ruin. Politics and individual interests were set aside for the sake of getting South African rugby through lockdown and the consequent restrictions put on training, playing and earning revenue.

In many parts of the rugby-playing world, players had to shoulder the heaviest burden when unions announced their cost-saving strategies. Not in South Africa; everyone, from the CEO of SA Rugby, to the players and groundkeepers, made exactly the same sacrifices, while those who could least afford a reduction in income were indemnified against any such losses. The alternative of having every person fend for themselves would likely have ended in large-scale retrenchment, legal cases and all sorts of unpleasantness that would have brought the industry to its knees and ultimate demise.

To survive the pandemic, rugby had to act proactively, and while we acknowledge the disruptive impact this has had on many players, staff and their families, I still believe the best decision was taken and that we will be able to play rugby in 2021 and beyond because of some tough yet vital decisions we had made in 2020. And the South African rugby industry deserves credit for the thoroughness, sensitivity and again, its collective effort, in keeping heads above water in a storm we could not have predicted.

LIQUIDATION OF THE VALKE AND KINGS

However, not everyone was as ‘fortunate’. The Valke company and the Southern Kings filed for liquidation in 2020. While we believe there were other contributing factors sealing these entities’ fate, we cannot deny the detrimental impact Covid-19 had on both companies’ financial position.

Still, the decision to liquidate a company is preceded by events and/or managerial behaviours that also result in an entity’s inability to meet its financial obligations. Covid-19 might have been the final straw that broke the camel’s back, but without wanting to sound overly harsh, we have experienced several liquidations of the professional entities of members of SARU in recent years. Liquidations are not new to the South African rugby landscape.

The impact on professional rugby is severely debilitating. It creates various forms of extreme hardship for individuals/employees and the people closest to them. It may take the employee years to recover from the negative financial and career impact they experienced as a result of the liquidation, and the immediate legal and financial support provided by MyPlayers can only bring temporary relief to those players and families. Furthermore, a professional rugby team that has been developed over time with significant financial and human investment is basically dissolved overnight. This means all such investment efforts were meaningless and that the industry’s ability to provide a rugby product is diluted. The list goes on.

The members of SARU (the amateur rugby unions) are by default responsible for the management of amateur and professional rugby in the region and may decide to establish a separate professional entity to oversee its professional rugby functions. However, whenever professional rugby entities get liquidated, the founding shareholders in those companies – the amateur unions – face no consequences for doing so, and they are not held to account for the failings of their commercial arm.

In light of the Valke and Kings liquidations, but also in the context of the long and all too common occurrence of such liquidations in South Africa, MyPlayers appealed to SARU to urgently make the necessary amendments to its constitution to ensure that its members take full responsibility for their professional entity, with significant penalties to be imposed on them if and when those entities fail commercially. It is in the interest of the industry as a whole that the systemic health of rugby in South Africa be improved to rid the professional game of this easy way out of financial distress.

NATIONAL MEN’S SEVENS COMMERCIAL PAYMENTS

South Africa’s professional rugby players have an annual claim on payments for the use of their collective commercial rights. These payments are derived from a number of events, such as games or tournaments played, sustained inclusion in national squads, and commercial appearances as requested by their employers and their commercial partners. The national men’s sevens side was one of the first teams to feel the effect of Covid-19 restrictions on their income. One manifestation was reduced commercial rights payments, which they received in July 2020. A number of factors contributed to these reductions, including tournaments being cancelled. During the year, MyPlayers made significant operational and

salary cuts and other savings that made it possible to reimburse those sevens players with top-up payments in January 2021. In total, distributions of just more than R4,3 million were paid to the national men’s sevens players for the use of their commercial rights in 2020.

COMMERCIAL PAYMENTS 2020

The savings incurred by the Players’ Organisation also meant that national and provincial players could receive their full commercial distributions for 2020. While it would have been reasonable to expect reduced commercial payments in line with other industry-wide cost saving strategies enforced by the Covid-19 pandemic, diligent operational management negated that possibility.

While no test matches were played in 2020, other streams of commercial revenue enabled an allocation of R8,2 million to the Springboks. The total commercial distribution allocated to provincial players was for R14,2 million. The MyPlayers Board and Players’ Trust also agreed to allocate approximately R4,5 million to the reserves of the Players’ Organisation.

At the time of writing, MyPlayers is also in the final stages of securing a new commercial rights deal with SARU, and this deal – valid for the next three to five years – will be concluded in early 2021.

INDUSTRY COLLECTIVE AGREEMENT

Also, the new Collective Bargaining Agreement (CBA) is to be ratified by the industry in January 2021. The CBA traditionally regulates the terms and conditions of employment applicable to provincial rugby players and the relationship between the members of SAREO and SARPA. We are extremely happy about the new direction being taken with the 2021 CBA in that national and provincial conditions of employment will not be dealt with separately as in the past, but as a whole. While provincial and national employers might have experienced their worlds as being apart from one other, players view their provincial and national duties as overlapping and complementary. They might be playing provincial rugby in one week and find themselves in a national environment the following week. In order to align the reality of the interconnectedness of both worlds, the new CBA will mirror the ways in which these complement each other, and stakeholders will also get a holistic view of the total industry and how its different parts fit together to collectively produce world class performances at provincial and national level.

IMPROVED INJURY BENEFITS AND LIFE COVER

In 2020, MyPlayers improved the general injury benefit available to players who are unable to play due to an injury, illness or accident. In the past, the injury benefit provided salary continuation for 12 to 24 months while injured, from the date of the incident. From 1 January 2021, the minimum coverage period has been increased from 12 to 18 months. As an illustration, if a player got injured during the final month of his existing contract, he would have been covered financially for at least 12 months. The minimum threshold is now 18 months, allowing the player greater peace of mind during a prolonged rehabilitation period or in the event of unemployment. The maximum injury cover available to players has also been increased from R4 million to R5 million per annum.

In partnership with Momentum Corporate, MyPlayers introduced a completely new Life Cover benefit to our membership portfolio in 2020. A marginal premium of R18 per month was added to players’ pension fund savings for a compulsory minimum benefit of R150 000. Players may voluntarily increase their monthly premium to secure up to a maximum of R4 million in a lump sum payment to their elected beneficiaries in case of death.

COMPETITIONS

After 25 years of Super Rugby, SARU’s General Council decided to officially withdraw from Vodacom Super Rugby with immediate effect. This decision was expedited by the disruptive impact of the Covid-19 pandemic on the global game, and it would likely have been taken once existing broadcasting and competition agreements came to an end. After considering the facts and consulting with our members, we supported the decision. It is in the best interest of SA Rugby to compete in strong and commercially attractive markets in Europe. It will substantially reduce the burdensome travelling demands South African Super Rugby teams were exposed to since the inception of the tournament in 1996. While this decision will necessitate changes

within the SANZAAR environment, New Zealand and Australia have also indicated a preference for a less demanding annual traveling schedule between SANZAAR’s four member unions. The continuation of The Rugby Championship will not only be good for our rugby, but will also sustain South Africa’s relationships with New Zealand, Australia and Argentina. We are truly part of a global rugby community now.

An unfortunate by-product of SA Rugby’s decision was the uncertainty it introduced in the Cheetahs franchise. At this stage, we are aware of various options being considered to ensure that the Cheetahs will remain a franchise in future. We strongly encourage and support these initiatives as the Cheetahs have been a major contributor to professional rugby in South Africa and the world, and its importance to the elite level of the game cannot be overstated.

MENTAL HEALTH

Soon after South Africa entered its national state of disaster and the resulting Covid-19 lockdown, it became apparent that rugby players were not only taking financial strain, but increasingly felt mentally exhausted. The Player Development Department immediately created opportunities to interact with players in individual and group settings, and at the start of the Super Rugby Unlocked/Currie Cup season, introduced a longitudinal programme and study aimed at identifying and supporting players who presented with symptoms of mental health distress. Of all the decisions taken in this year of turmoil, this programme is likely the one that will continue to benefit players the longest after the “new normal” had dawned in our country and industry.

Mental health awareness and support systems are fundamental elements of the greater player welfare conversations and interventions seen locally and abroad. In 2021, we expect that player safety and specifically head injuries and concussion will continue to receive more and much needed attention. In this regard, we are enthusiastic about a partnership agreed to between MyPlayers and the world-renowned manufacturer of mouthguards, OPRO. Not only will OPRO supply all professional players with custom-made mouthguards for at least the next three years, but we will also join hands in doing research into player safety in the domestic professional rugby environment.

The priority and increased sensitivity being applied to the wellbeing of professional athletes is encouraging. Ultimately, our heroes are all just human, and MyPlayers will continue to provide support and opportunities for growth on and off the field of play.

ANNUS HORRIBILIS?

It’s fair to say that 2020 would have looked much different if we all had more control over how it ultimately unfolded. The year gave us enough professional and personal reasons to become pessimistic, but from this heap of dung some beautiful flowers might yet emerge. Some players’ careers would have been prolonged by the opportunity to adequately rest battered bodies. The South African rugby industry was nudged towards a future that will likely improve its commercial standing and earning potential in a new global landscape. We were reminded of what really matters most in life and that the game we love can be taken away from us in the blink of an eye.

So, what are those other factors that define who we are beyond rugby, and also, after rugby? What do we want our individual legacies to be during and after our playing careers? It’s seldom in life that you get the opportunity to reflect on these things. In a previous life, we lived from Saturday to Saturday and from spotlight to spotlight. That “normal” was abruptly interrupted, and as we now enter a new year with some of the same challenges still lingering in some areas of our lives, we are perhaps somewhat better prepared to navigate our way towards whatever the new normal will be. That new reality will include professional rugby. The industry as a whole ensured that. All is not lost. We are now battle hardened. May 2021 be an incredible year that will be remembered for all the right reasons.

Lastly, I would like to thank David de Villiers, Isma-eel Dollie, Hilana Claassens and Mandisi Tshonti in particular for the countless extra hours and effort they gave in service of the players in an extremely trying year. I also want to commend and thank the MyPlayers team. You made a seamless transition to working remotely, gave many more hours of yourselves, were available 24/7, and your attitude and performance outputs were as impressive as always, even if you had to work at significantly reduced salaries. It’s a pleasure and honour to work with great people like you.