Lions Pride

In an interview with Darren Scott on Ballz (http://www.ballz.co.za/sport/louis-luyt-talks-about-the-state-of-the-lions-rugby-union/627) former GLRU president Louis Luyt claims that when he left about 12 years ago the GLRU had R85,000,000 in the bank and no debts (according to Wikipedia Louis Luyt left in 1998). Today the union is virtually bankrupt and some estimates put the current debt as high as R140,000,000.

What happened in the 10 years or so that the union went from R85,000,000 in the black to R140,000,000 in the red, a swing of R225,000,000 in a matter of 10 to 12 years? The actual amounts may be different but that is irrelevant, the fact is that, not so long ago, the Lions had a lot of money and  now they are deep in debt.

Note 1: It is mentioned on LionsWorld that the a major part of the R85 million was invested overseas and that when the Rand Dollar exchange rate went from about R13 to the Dollar to about R7 in early 2003 the investment’s value was halved. This accounts for about R40 million but still doesn’t explain the rest.

Note 2: In GumaTac’s application to liquidate the Lions they claimed that the Lions’ total liabilities exceeded its total assets by R48.6-million in 2007, which ballooned to R73.9-million by December 31 2010. So, by 2007 the R85 million was already gone.

Where did all this money go? What did the union management during that time do to waste what is not a small fortune?

A lot of blame for the position the Lions find themselves in at the moment is laid at the door of Kevin de Klerk and the current Lions management, which is a bit myopic considering that de Klerk only stepped towards the end of 2009 and Ruben Moggee was only appointed as acting CEO in 2012.

When Kevin de Klerk was asked to step in in 2009 the union was in turmoil and saddled with these massive debts, unpaid franchise partners and unenforceable player contracts. His tenure as president has been marked by a struggle to keep the union afloat financially, with threats of liquidation and lawsuits for unpaid partner fees.

Not being in the Lions inner circle I can only go on what appears in the news and from comments on Lions forums by people who are closer to the action, considering that not all information is shared on public forums.

Some of the steps taken to try and turn the union around was

- to take in an equity partner in the union’s professional arm, Lions Rugby (Pty) Ltd, previously fully owned by the GLRU.

- to drastically reduced their contract player numbers, many who haven’t played for the province in years but who were still being paid, in order to reduce a massive salary bill.

- to stop attempts to recruit additional high profile players and work on bringing players through the ranks.

- to boost the Lions profile and brand, especially to supporters both past and present, through TV programmes such as Lions4Life

- to attract more people and families to the stadium with pre-game activities and entertainment, although poor performances in Super Rugby didn’t help.

Unfortunately three years haven’t been enough as some chickens took a bit longer to come to roost. Eventually the years of mismanagement, player discontent and desertion and poor performances on the field has caught up with the Lions and they face a bleak future with limited funds and no top class competition.

The task of the Lions management now turns to damage control and rebuilding of a union, not merely winning a competition or two.

Edit: I changed the title to reflect the magnitude of the problem and to prevent one getting stuck on the R85 million