$1.3 Billion Windfall: SA Rugby Officials Offer Honest Insights on McKenzie’s World Cup Ambitions
Following the statements from South African Minister of Sport Gayton McKenzie, who declared he “will not rest” until the Rugby World Cup returns to South Africa, SA Rugby’s president Mark Alexander and CEO Rian Oberholzer have adopted a cautious approach, emphasizing the significant financial and infrastructural challenges that hosting this prestigious event entails.
During the organization’s AGM at the Southern Sun Cape Sun on Thursday, Alexander, who was re-elected for a final term unopposed, acknowledged McKenzie’s enthusiasm. However, he pointed out that SA Rugby has not yet begun discussions about any potential future hosting opportunities.
The Springboks, who have been crowned Rugby World Cup champions four times, last hosted the tournament in 1995 and famously won the trophy on home soil during their inaugural appearance.
Since that success, South Africa has made several attempts to host the event again, notably bidding for the 2023 Rugby World Cup, which ultimately went to France despite South Africa being a strong contender initially.
Recently, McKenzie mentioned that talks with potential sponsors have commenced to secure around R3 billion to cover hosting expenses.
Both Alexander and Oberholzer, however, underscored that the financial expectations are significantly heightened when evaluated against global standards and the commercial criteria set by World Rugby.
“He is the Minister of Sport, and it is his right to voice his opinions,” Alexander stated.
“As SA Rugby, we need to evaluate our capacity to host a World Cup. Given the various implications and required financial resources, we haven’t started those discussions yet.”
He also commented that South Africa chose not to pursue further bids, noting that the next legitimate opportunity might not present itself until 2035.
“The venues would require significant enhancements, and substantial work is necessary before we can host an event of this magnitude,” Alexander clarified.
“We appreciate the minister’s sentiments; he is free to voice them, but at this stage, we haven’t genuinely contemplated it.”
Oberholzer reinforced this stance, stating that organizing a Rugby World Cup presents unique obstacles compared to other international sports competitions, especially due to the financial structure imposed by World Rugby.
“The minister is passionate about attracting major international events to South Africa, which is commendable,” Oberholzer remarked.
“However, we must recognize the complexities involved in holding a World Cup here; it is distinctly different from other sports.”
A significant concern raised by Oberholzer is the state of the country’s stadium infrastructure. He noted that considerable investment would be necessary to upgrade venues to meet world-class standards.
“In South Africa, preventive maintenance for most stadiums is insufficient,” he pointed out.
“A considerable financial commitment would be required to elevate stadiums to international standards—and we must also address the broader infrastructure needs.”
Oberholzer further mentioned that SA Rugby does not possess the commercial rights to the tournament, which limits the union’s capacity to mitigate expenses through sponsorship deals.
“We don’t control the commercial rights, so we can’t easily secure sponsors to alleviate the costs of the event,” he explained.
“For us, the only revenue we gain from a World Cup is from ticket sales, while most of the tournament costs remain to be covered.”
The financial challenges multiply when compared to the potential earnings from hosting the event in Europe or in emerging markets like the United States.
“You must also evaluate the revenue that World Rugby can bring in from South Africa compared to what can be earned in Europe,” Oberholzer noted.
“These decisions are made by World Rugby, as the tournament is their primary source of income, which is essential for supporting all 90 member unions.”
According to Oberholzer, any future bid from South Africa must ensure substantial profits for World Rugby to be taken seriously.
“If we can secure the necessary government backing to guarantee a $700 million profit for World Rugby, we can commence discussions—keep in mind, those profits are essential for them,” he stated.
He also mentioned that the 2031 Rugby World Cup in the United States is anticipated to generate around $1 billion in profits for World Rugby.
“We would need to convince World Rugby that they could achieve a $1.3 billion profit that we could support in South Africa,” he elaborated.
“Only then could we assess whether it would be beneficial for us.”
Alexander concluded by emphasizing that hosting such a large-scale event necessitates collaboration and funding from various government departments, not merely the sports ministry.
“Organizing an event of this scale impacts departments like security and home affairs, which would each require their own budgets; it’s not just about coordinating rugby matches,” he clarified.
Despite the numerous logistical and financial obstacles, both leaders of SA Rugby acknowledged McKenzie’s enthusiasm for bringing elite international sport back to South Africa.
“We appreciate the minister’s passion and value his contributions,” Alexander noted in conclusion.
“We would be eager to work alongside him.”
