Analysing the Premier Soccer League’s Monthly R2.3 Million Grant and How It Affects Moroka Swallows

• Moroka Swallows management claims that the club is in dire financial straits
• Premier Soccer League clubs receive R2.3 million monthly from the league
• The PSL does not have caps on spending creating a large financial disparity

Football coaches drum in the idea of discipline but the message seldom filters to the boardroom.

Financial flagrancy is rife in the South African game as clubs transcend community assets to become status symbols with shaky sustainability.

Between the big-spending billionaires and the frugal basement dwellers is a class of mavericks that bet big, forgetting that the house always wins.

Moroka Swallows management and players are at financial loggerheads, with drastic outcomes likely, after both the club's internal disciplinary hearing and the Premier Soccer League (PSL) charge facing the club.

To support clubs financially, the South African league grants each of the 16 members a pre-tax amount of R2.3 million per month. Sports Brief attempts to unpack where that grant money goes and if it is enough.

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What would R24 million get in one year?

After tax, the PSL grant equates to roughly R24 million a year, which is a base payment that allows clubs to cover all operating expenses. As with all businesses, keeping those costs to a minimum is the path to success.

Travel and accommodation

Moroka Swallows have the fortune of being in the same province as four other PSL rivals, a flight-equivalent drive to three other opponents and eight away trips that require airports.

Chippa United, based in Nelson Mandela Bay, are the least fortunate as their nearest opponent is at least 800km in either direction up or down the coast.

To get the travel and accommodation costs to under R3 milllion a year, it would take travelling as light as possible. For a single-night away day, a club needs no more than 18 players and seven staff, including the head coach, assistants, team manager, and medics.

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Using commercial airfare prices, a club can spend roughly R125,000 per away game. For Chippa's 15 away days, that would cost R1.9 million per year, the most a club could spend transporting essential members.

One night at a four-star hotel seldom breaches R2,000, including breakfast. Again, for Chippa, accommodation should not come to roughly R750,00 per year.

15 home games and a training venue

Stadium and training venue rental is another cost that would vary from city to city. All PSL venues are owned by the various municipalities that charge their tenants according to city structures.

Stadium Management South Africa (SMSA) operates the FNB Stadium, Orlando Stadium, and Dobsonville Stadium tenanted by the three Soweto clubs. When asked what the cost were to the clubs, SMSA CEO, Bertie Grobbelaar, told Sports Brief exclusively:

"The information you are requesting is unfortunately governed by a confidentiality clause in our agreements with the respective clubs. I am therefore not in a position to disclose the information requested."

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Equipment and kit

Equipment and kit should be negligible costs at professional level, which is sponsored in most cases. Even the travel and accommodation can be greatly discounted should the clubs or league be able to negotiate a preferential supplier agreement with media exposure on the sponsor broadcaster.

R400,000 is a figure quoted by FARPost to host a home game, adding up to R6 million per year. Together with the above costs, the total is R9 million, leaving R15 million for player payments.

Salaries

The greatest cost then is paying the stars. Mogashoa claimed via iDiskiTimes that their wage bill is R4.2 million a month. For a 30-player squad, that would be an average of R140,000 per month per player.

Football may be a business unlike any other, but staff salaries are among the first cost-benefit factors considered. The monthly PSL grant is meant to cover the bases, while outside funds from sponsors are the source of salary clout.

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PSL owners are wealthy but none are like Mamelodi Sundowns, who have the financial backing of African Rainbow Minerals, the source of Dr Patrice Motsepe's all-conquering power.

PSL Sponsorships

The improved sustainability for smaller clubs depends on sponsors. In Swallows' case, they have been unable to secure a sponsor in a market where only a few industries have the means or motivation.

The Dube Birds had two deals blocked, one from a telecommunications company and another with a sports betting company. The value of either deal would have been close to the annual value of the PSL grant, putting Swallows, Mogashoa, and the players in a far less stressful situation.

Several betting companies have their claws in PSL teams even though online gambling is still illegal in South Africa. However, sports betting has protected status as per the National Gambling Board.

There could be another method, as in the case of Royal AM, where owner Shauwn Mkhize secured government sponsorship with a controversial payment from the Msunduzi Municipality to the value of R27 million, as reported by News24.

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Sports Brief did send questions to PSL Media Liaison, Fhatuwani Mpfuni, asking what level of financial oversight the PSL took with clubs but no response had been received at the time of publication.

The risk takers may argue that to win big, you need to bet big but when the gamble does not pay off, not everyone has the means to roll the dice again.

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Moroka Swallows players in disciplinary hearing

Sports Brief previously reported on the disciplinary measures facing Swallows and their players.

The PSL have charged the club for misconduct and the club has in turn charged their own squad.

The dispute stems from the club's finances, which saw them fail to play in two league matches.