Thread by @CashNSport

Ladies and gentlemen, research took a little break but we are back. Today we look into the newly released financials of the South African Football Association (@SAFA_Net) for the year ended 30 June 2019. The standout number, a massive R75 Million rand loss!

Thread!

#SAFA

As usual, I will re post my disclaimer. I am not an auditor, accountant or statistician nor am I a sports journalist. I am merely a concerned football fan who likes to read up on the financial side of sport and this is all publicly available information. 

Let us begin

I begin with former Chairman, Mr Thamsanqa Gay Mokoena. It's clear from his remarks that SAFA expected a difficult year primarily due to loss of sponsorship revenue from the SABC. What shocked me is that sponsorship revenue from the SABC accounted for up to 35% of income.

#SAFA

More detail around financial performance can be found in the remarks of Mr Gronie Hluyo, the Chief Financial Officer. The SABC revenue constituted about 35% of income and for the '19/20 season they expect only 50% of the SABC revenue. That equates to roughly R47 million

#SAFA

I looked at the SABC’s financials for 2019 and found that they too had a difficult year, reporting a net loss of R482.4 million for 2019! However, this net loss is a 35% improvement on the restated loss in 2017/18 and should theoretically be able to honor their agreement

#SAFA

It cannot be stressed enough just how important a healthy and functional SABC is to the fortunes of @SAFA_net

With @thegaryrathbone now leading Sports Operations at the SABC, the hope is we will see the SABC broadcast rights payments begin to rise again.

Next i looked at the revenue breakdown.

Broadcast rights: N/A
Host Cities Income: R5,040,053 -> R3,148,368🔻37%
Sponsorships: R148,376,935 -> R189,035,618 🔺27%
Technical Centre Visitors: R6,579,810 -> R5,893,277 🔻10%

Net revenue R304,113,297 -> R237,375,893 🔻21%

#SAFA

According to statements from Gronie Hluyo and my own calculation, that missing SABC broadcast fee should be in the region of R47 million as I said earlier. On a positive note, sponsorships continue to grow while expenses have decreased encouragingly.

#SAFA

In addition, CAF and FIFA grants to Member Associations increased. The CAF
grant increased from $100 000 to $200 000 p.a. whilst the FIFA grant rose from $1,25m to $1,50m p.a

FIFA also announced a Covid relief grant of $1.5 million with $500k specifically for women's football

Talking about grants, the elephant in the room is always the 2010 FIFA World Cup Legacy Trust.

SAFA draws down from this trust through interest bearing grants with the likes of @Mumble_D and @gaymokoena calling for independent inquiries into the management of these funds

According to the financials, the Trust had an available balance of R115 million. The original investment was R450,762,816 and interest gained on the original investment was R153 million.

Here is the breakdown for how it has been spent.

A large portion of the allocation to SAFA was to build the National Technical Centre or Fun Valley for R82.5 million while regions, development through education and legacy bags (training kit bundles including nets, balls, cones etc) cost another R72 odd million.

#SAFA

I have tried to track where that money went exactly which has proved very difficult.

Age group teams though have done well and women's football has exploded culminating in a World Cup qualification.

Does that mean Vision 2022 will be achieved? I doubt it

Onto other expenses

Here is the operating expenses breakdown:

National Team: R84,797,659 -> R119,490,758 🔺41%
Football Development: R41,171,295 -> R21,943,902 🔻47%
Other Administration: R141,272,730 -> R114,180,470 🔻19%

#SAFA

When I reviewed the 2018 financials, I found the Other Administration Costs number seriously worrying and I am glad to see that number is decreasing along with the cost containment objectives.

You can find my 2018 financials thread here:

#SAFA

For those curious to know, the administration costs number consists of the following.

Employee costs are by far the highest contributor. A curious thing is that the NEC members DO NOT get paid a set salary so they don't form part of that employee cost number.

#SAFA

Since the NEC members are non standard employees, they receive what is called an Honoraria fee. An honorarium is a token payment made to bestow recognition to an individual for services they perform, for which payment is not required.

Essentially volunteering.

#SAFA

From what i can gather, a Remuneration Committee proposes what the NEC as the governing body of SAFA can be paid. Congress, led by the NEC then decides on the remuneration.

Essentially, the NEC decides what they get paid.

#SAFA

Further to this, there are vehicle loans not only to current but also former NEC members as well. These loans are supposedly paid back through the honoria payments that the NEC members receive.

My question is, how do you recoup a loan from a former NEC member? Very odd

#SAFA

In summary.

#SAFA needs the SABC to fix themselves ASAP
Expenses are coming down nicely
Legacy trust funds are almost finished but other sources of income like grant funds and sponsorships are rising
Internal ructions need to stop
Covid adjusted numbers will be brutal

Cheers