SA Rugby has announced plans to reduce its budget ©Getty Images

South Africa Rugby has approved a plan aimed at reducing the sport's budget by R1.2 billion (£53 million/$65 million/€60 million) by the end of the year.

SA Rugby said the plan was designed and concluded by organisations representing the governing body, provincial unions, players and rugby industry employees.

The budget cuts are largely expected to be achieved by reduced expenditure due to the cancellation of competitions caused by the coronavirus pandemic.

This is expected to amount to 49.7 per cent of the budget reduction identified.

SA Rugby say cuts in other operational budgets will count for 37.3 per cent, while the remaining 13 per cent will be achieved through salary reductions.

The organisation said the salary cuts amounted to 25 per cent of total remuneration across the industry, including all employees, players and officials.

People earning below R20,000 (£900/$1,100/€1,000) per month have been exempted from any cuts.

High earners have agreed to cuts on a sliding scale of up to 43 per cent.

The plan was agreed by bodies representing SA Rugby, the players' representative organisation MyPlayers, the employees' trade union Sport Employees Unite and the South African Rugby Employers' Organisation, who represented the provincial unions.

"It was a complex process to find alignment with a number of entities representing 1,396 people in the South African rugby industry but throughout everyone collaborated fully," said Jurie Roux, SA Rugby chief executive.

"The group identified our collective areas of financial risk and what savings had to be made and then identified a plan to mitigate those risks.

"It has meant salary cuts for many, but we have put together a plan that will ensure the industry will be positioned and resourced to get straight back to action just as soon as we are permitted."

The saving plan came into effect on May 1, with May 14 the cut-off date for individuals to cancel their contracts.

The plan is expected to continue until the end of December in the first instance.

South Africa are yet to play a home match since winning the Rugby World Cup in Japan last year ©Getty Images
South Africa are yet to play a home match since winning the Rugby World Cup in Japan last year ©Getty Images

New Zealand Rugby and Rugby Australia are among other organisations within the sport which have already been forced to cut back due to the coronavirus pandemic.

The latter received AUD14.2 million (£7.5 million/$9.2 million/€8.5 million) in funding from World Rugby last week.

It received the money from World Rugby's £80 million ($103 million/€95 million) coronavirus relief fund, which is being allocated to unions on an application and evaluation basis.

Earlier this year, Rugby Australia announced a preliminary AUD9.4 million (£4.6 million/$5.7 million/€5.2 million) loss for 2019, with its situation worsened by the pandemic and suspension of Super Rugby.

Players agreed to a 60 per cent reduction in wages, with the governing body also standing down 75 per cent of its workforce, leading to an 80 per cent overall reduction in costs across the organisation.

The Rugby Football Union in England has also introduced a series of pay cuts, with the organisation forecasting revenue losses of up to £50 million ($61 million/€55 million).

SA Rugby, who celebrated winning the World Cup in Japan last year, has said its focus has now shifted to returning to play plans.

"From the moment we went into lockdown we have been preparing and work-shopping internal guidelines and protocols for return to play and return to work," said Roux.

"Those are complete and are ready to be actioned as soon as we get the Government's go-ahead.

"We have presented our case to the Minister of Sports, Arts and Culture and believe we have a strong case.

"We do not run hospitals or build ventilators and we are not an industry that is critical to the South African economy; but we do believe that we add huge value to national life in other ways.

"The sight of the Springboks running out for the first time since winning the Rugby World Cup would be a powerful milestone on the nation's journey to the other side of this crisis as well as being a boost for national morale.

"While the return to play of our provincial teams – even if it is behind closed doors – would similarly be hugely beneficial to a nation in lockdown.

"We understand that there are bigger agendas at play but believe the risk of transmission could be well managed by our protocols. 

"We trust the Minister and Government will view our case seriously."