Ken Borland

Watching South African rugby on television at the moment may be a bit like being in a canoe stuck in a stagnant backwater – the still water means not much is happening – but there is a deadly waterfall up ahead if the Independent Communications Authority (Icasa) get their way.

Icasa, which regulates broadcasting in this country, are concerned that subscription TV, i.e. Multichoice, have a monopoly on showing live sport in this country and they want to make the market more competitive. To do this, they propose that broadcast rights can only be bought for a maximum three-year period, there are to be no exclusive deals and rugby’s properties must be split and dispersed between as many broadcasters as possible.

But as SA Rugby so ably illustrated in their presentation to Icasa during public hearings this week, these so-called remedies will have the exact opposite effect. Because they will have such a drastic economic impact on the sport, for whom the sale of television rights makes up 58% of their income (sponsorship, which largely depends on TV exposure, makes up another 26%), the market won’t be competitive at all because professional rugby, already brought to its knees by the Covid-19 pandemic, will all but cease to exist.

Spreading the rights around may sound like a lovely socialist plan in an ideal world, but in the real world of free market economies, and the absence of any other broadcaster remotely capable of doing and paying what SuperSport does, rugby is in the canoe going over the Victoria Falls if they can no longer sell their rights as a single package, in long-term, exclusive contracts.

Given the abysmal record of almost all parastatals in this country, I have a healthy scepticism when it comes to them poking their noses around wherever they sniff money or gravy. But I was squirming with discomfort when, following SA Rugby’s presentation, one of the Icasa councillors asked if the federation would consider producing movies, documentaries or news if they could no longer do rugby.

I was so shocked by the sheer idiocy of the question, coming from someone who is no doubt earning a healthy slab of taxpayers’ money and is in a position to draft laws for the people of this country, that I fired off a derogatory tweet. Shortly thereafter, after a rant by the Chairperson about people disrespecting authority on social media, I was removed from the virtual meeting.

It’s a bit like asking a company that specialises in making hand sanitizers if they wouldn’t mind switching to car manufacturing because the government wants to fiddle with the market.

As SA Rugby CEO Jurie Roux pointed out, it costs millions of rand to build a competitive rugby system that will find a player with talent in the grassroots pipeline, take them through the youth age-levels, through provincial and franchise rugby and hopefully then to the Springboks. That money largely comes from the sale of television broadcast rights and sponsors who are willing to pay for the exposure they get on TV.

Apart from their clearly undemocratic and anti freedom of speech tendencies, Icasa also failed to do a Regulatory Impact Assessment before drafting their findings, according to SA Rugby’s legal counsel, Ngwako Maenetje SC. He also accused Icasa of paying scant regard to a written submission SA Rugby had previously made, which gave a thorough indication of the dire financial impact the proposed regulations would have on rugby.

A court date undoubtedly beckons for Icasa if they continue with this idiocy.

Roux also mentioned SA Rugby’s mandate is to produce compelling content and the current standard of the Currie Cup has been a subject of much discussion recently. It certainly has not been a top-class spectacle, but there have been mitigating factors for that such as the heat, humidity and rain at this time of year and the disruptions caused by Covid outbreaks.

But a look at the laws of the game could help. I like a suggestion made by coaching gurus Nick Mallett and Swys de Bruin that being able to mark a kick anywhere in the field should be considered, scrum infringements should initially just be free kicks and the attacking side should not be held to the same offsides lines as the defence.

SA Rugby on Thursday submitted to the Independent Communications Authority of South Africa (Icasa) that their remedies proposed in their draft findings into the broadcasting of sport by subscription television will lead to a severe reduction in the investment by these broadcasters in professional sport and will ultimately cost the Springboks the chance of adding to their 2019 World Cup victory.

Icasa have proposed that broadcast rights should not last longer than three years, that there should be no exclusive deals and that the rights should be split between multiple packages and broadcasters.

But in public hearings held virtually on Thursday, SA Rugby CEO Jurie Roux said the ‘remedies’ would be an unreasonable burden on the federation and would mean they are likely to lose their fight for survival in these times of Covid uncertainty, while Senior Counsel Ngwako Maenetje said Icasa would be acting “irrationally” and ultra vires (beyond their powers) if they enforced the changes.

“If the regulations go through in their current format then we may never see a day like the 2019 World Cup win again. SA Rugby needs to produce compelling content that is commercially viable so we can develop the game from grassroots level to winning national teams. We are 99.7% self-funded, we only get 0.3% of our income from government, and broadcast rights bring in R752 million,” Roux explained on Thursday.

According to the SA Rugby presentation, broadcast rights make up 58% of their income, and sponsorships, which are largely dependent on TV exposure, make up another 26%.

“We are in a daily fight for survival, we are in financial difficulty having made losses between 2016 and 2018. We recovered a little profit in 2019 on the back of the World Cup and we looked forward to capitalising on that but no-one could have predicted what happened in 2020. Covid has pushed us into survival mode and had a massive detrimental effect. We’ve had to cut our budget by R1.2 billion.

“It has made insolvency a real and present danger, we’re on the brink, and if we had not been able to capitalise on broadcast rights, we would have been bankrupt by now. Exclusivity is the main source of our revenue and with less money it means there will be less rugby until we have to close our doors and only have club rugby. And then nobody will be interested in the game,” Roux said.

Judging by the presentation of Maenetje SC, Icasa would probably face court action if they enforce the regulations.

“No Regulatory Impact Assessment was conducted by Icasa, which makes the proposals irrational, they did not inform themselves of the adverse effect of these remedies. These effects are not proportional because they place such a burden on the rights holder, rather than broadcasters, such that they will not be able to sustain themselves. Icasa have paid scant regard to the dire impact we explained in our written submissions.

“By weakening one side of the equation you do not grow competitiveness in the market, SA Rugby will no longer be in a position to provide premium content and there will be an adverse impact on public interest. These remedies are irrational, not lawful and unconstitutional. They do not encourage investment so they undermine the Icasa mandate and exceed the statutory powers of Icasa,” Maenetje said.

Icasa launched their inquiry into subscription television services to ensure the broadcast market is sufficiently competitive, but Roux says “these remedies will have the completely opposite effect to their noble intentions”.

“The obligation is on the broadcasters and not on the rights-holders, which is where Icasa are acting ultra vires. There was no discussion of the economic impact in their draft findings,” Maenetje says.