Chilli Boys burning cash
Bay soccer club battling to keep its head above water despite multimillion-rand funding deal with metro
The finances of Premier Soccer League outfit Chippa United have been laid bare, exposing how the club is battling to contain its ballooning costs.
Despite the whopping sponsorship of the club – to the tune of almost R15m a year – by the Nelson Mandela Bay municipality, Chippa had a budget shortfall of more than R6m in the year to February.
This emerged a day after the Bay franchise, known as the Chilli Boys, announced that it had signed 14 new players in a major boost for the club’s prospects in the 2018/2019 Absa Premiership, which kicks off this weekend.
Millions of rands go into paying the salaries and accommodation of Chippa’s players and staff, flights, team kits, food and even energy drinks.
But the Bay metro remains its main funder, along with the Chippa group of companies.
The rising costs are forcing the club – which has ramped up efforts to attract major corporate and government sponsorships – to cut staff and skimp on meals it provides daily to the team at training sessions.
In Chippa’s interim report for the 2017/2018 season, presented to the municipal sports, recreation, arts and culture committee meeting this week, the club states: “In an effort to cut costs, the club is undergoing a process of retrenchment in areas with a surplus of staff.”
From a staff complement of 23 full-time employees and 10 technical team members, the report said the club had cut the number of administration staff to 10 with three consultants made up of a physiotherapist, a doctor and a psychologist.
The club also plans to book its own tickets and accommodation instead of using the PSL travel agent in the hopes of saving more money.
In June 2017, the council agreed to bankroll Chippa to the tune of almost R15m a year for three years.
The money was split into R7m a year for relocation costs, R500,000 a year for marketing, R6m a year as a sponsorship in exchange for a front-of-jersey logo, and R1.2m a year for match-day costs.
The agreement meant the majority of Chippa’s PSL games had to be played in the Bay.
Some games were played in Buffalo City, but it is not clear how much that municipality paid the club as this is not reflected in its financial report.
Despite its cost-cutting efforts, the club’s report revealed the high costs involved with running a professional soccer side. These include:
About R250,000 a month for accommodation for players;
About R192,000 goes towards accommodation for some technical team members;
Travel costs for away games cost about R177,000 a match;
Playing and training kits cost about R700,000; and
Match costs to play at the Nelson Mandela Bay Stadium are about R1.2m a match.
The excessive running costs of the club raised the ire of councillors, who wanted to know why the city could not accommodate the players at some of its beach resorts.
The committee decided, on Tuesday, that Chippa representatives must appear before it to account for the money the city pumps into the club every year.
Chippa’s report states: “Accommodation remains one of the largest challenges for the club because many of the players are from other provinces.
“As is standard Premier Soccer League practice, Chippa United needs to accommodate these players as part of the contractual obligations.
“Virtually all players in the first team, barring the five promoted from our [Multichoice Diski Challenge] team, are accommodated by the team.
“Players ordinarily have plane tickets for the beginning of season, mid-season return, and off-season return to join the team.
“This is an additional expense which the club has had to incur, booking tickets for outgoing and incoming players as well as a fuel allowance for those who opted to drive.”
Providing lunches to the team, which trains twice a day during preseason, is also at the cost of the club, it emerged in the report.
This is at a cost of about R135 a person per day for the players and technical team.
“Even though the number of lunch meals provided for the team has been reduced significantly, it is still a substantial amount of money.
“The team is hoping that [as a result of] the new outsourcing policy at the NMB Stadium, as well as its drive to limit the number of meals in line with team schedules, the associated costs will be greatly reduced.”Chippa Holdings group legal head Bongani Dlodlo said it was not standard for clubs to provide meals at training sessions, but it was a decision taken by the club to enhance “[camaraderie] and harmony” among the players.
“[This is done] by allowing them to spend time together between training sessions. The meal requirement varies with training schedules and preferences of head coaches,” he said.
He said the club had recently clinched another sponsorship, with the Eastern Cape department of sports, recreation and culture, to give it a cash boost as the holder of major sporting events in the province.
“The team is aggressively marketing itself with major corporates and governmental organisations for value through partnership.
“A new team has been assembled for the 2018/2019 season whose efforts will immediately be visible from the marketing and branding initiatives at all matches,” Dlodlo said.
He said budget shortfalls – R6.1m for the financial year ending in February – were funded by the Chippa group.
At Tuesday’s portfolio committee meeting, ANC councillor Simphiwo Plaatjies said: “The expectation is that with all organisations that are being funded by the municipality, they need to come and present how they are using this money and what their shortfalls are.”
DA councillor Sebenzile Rafani asked: “Is there no space at the resorts so that we can accommodate the players there?”
But the head of sports, recreation, arts and culture, Noxolo Nqwazi, said the municipality could not interfere in how Chippa ran its affairs.
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