Bloodbath.

This was the word a sports marketer uttered when I asked him how the wobbly South African economy would affect sport.

It’s history now that the Rand nosedived in the wake of recent political shenanigans. In Dollar terms, South Africans are 25 percent poorer than they were a year ago. That’s catastrophic.

Already major sponsors have begun to squirm and re-evaluate their positions. Some cricket franchises remain unsponsored and the effects of Absa’s withdrawal from rugby are likely to be volcanic.

Any local sport that includes foreign participation will be hurt by the crumbling Rand.

Golf is one such sport.

Think of the aspirant golfer who earns his European tour card. Unless he’s a ready-to-go superstar, he’ll live on the margins – if he can afford to hit the overseas road at all.

European so-sanctioned events like the Joburg Open and Tshwane Open will be particularly hard hit. Already expensive to host (at around R50-R60-million a time), the Rand cost of prizemoney will hit the roof. Not forgetting that appearance fees are also paid from time to time, always in foreign currency.

Some sponsors, like Nedbank, buy forward, but not all currency appreciations can be factored in. Everyone feels it.

Not forgetting, it works in reverse, too. Ernie Els is the all-time top earner in European golf with tour earnings of over €30-million. That’s a staggering R490-million.

The effect of the Rand’s pummelling will be no less painful for rugby. SA teams that travel for Super Rugby will have to pay more to do so. The money must come from somewhere, so the pressure will run through the entire sport, especially with the bulk of local unions struggling to make ends meet.

The annual costs of running a Super Rugby franchise are staggering, which partly explains why the Kings are struggling to keep the lights on.

Teams like the Sharks used to periodically employ marquee players like Frederic Michalak and Olivier Roumat. They spiced up the local scene but came at a cost. Don’t hold your breath on any of the local franchises doing much overseas shopping now, not with the Rand bleeding.

Cricket will start to feel the pain too. Securing Kevin Pietersen for a couple of local games recently was a coup, but he wants his pay in Pounds. Sponsors have to break the bank to meet the demands. Not many will.

Local tennis has already hit the wall. Our first-class tour events were sold off long ago and local tournaments are bread-and-butter affairs with few frills. The idea of flying in a star or two is fanciful. Local prospects will have to satisfy themselves watching their heroes on television.

Boxing is another sport that gets blown out of the water by heavy currency fluctuations. Top-level imports from the UK or the US dried up over 10 years ago, although officials (referees, judges and supervisors) from these countries must still be hosted for local tournaments.

Promoters also pay sanctioning fees in Dollars to the likes of the WBC, WBA and IBO, which they do through clenched teeth.

Top local promoter Rodney Berman says he won’t compromise on the standard of fights he puts together, but said he would probably seek to put together more appealing local matches where the fighters are paid in Rands.

Another local promoter was recently bemoaning how a single return ticket for a Colombian boxer cost R37 000. And he flies with a manager and trainer.

Major TV rights are purchased in Dollars, so the pressure extends to broadcasters here too; they can do far less with their Rands than a year ago.

Local sports research expert James Monteith predicts that we’ll start seeing budgets decrease over the next 18 months. He explained that many companies like Barclays (Absa) already have budgetary pressures. Typically, marketing and research budget gets cut first.

Sponsors can’t immediately cut contractual spend, but they can cut their leveraging budgets. This means that while they sponsor an event, the advertising, campaigning and activations around the events will be cut.

Without the ability to extract full value, will they stick around when contract renewal becomes an option?

Times are tough. Powerless, all we can do is suck it up. – © Sunday Tribune