“A $1.3 Billion Profit”: SA Rugby Bosses Issue Massive Reality Check Over McKenzie’s World Cup Dream

Following comments from South African Minister of Sport Gayton McKenzie declaring that he “will not rest” until the Rugby World Cup returns to South Africa, SA Rugby president Mark Alexander and CEO Rian Oberholzer have responded cautiously, highlighting the enormous financial and infrastructural demands involved in hosting the global showpiece.

Alexander, whose final four-year term as SA Rugby president was confirmed unopposed at the organisation’s AGM at the Southern Sun Cape Sun on Thursday, acknowledged McKenzie’s enthusiasm but said SA Rugby has not yet considered entering a future hosting race.

South Africa’s Springboks, four-time Rugby World Cup champions, have hosted the tournament only once before — in 1995 — when they famously lifted the trophy on home soil during their debut appearance.

Since then, South Africa has launched several unsuccessful bids to host the tournament again, most notably for the 2023 Rugby World Cup, which was ultimately awarded to France despite South Africa initially being identified as the preferred candidate.

McKenzie recently revealed that discussions with potential sponsors had already begun in an effort to raise approximately R3 billion towards hosting costs.

However, both Alexander and Oberholzer stressed that the financial requirements extend far beyond that figure when measured against international expectations and World Rugby’s commercial demands.

“He is the Minister of Sport. He is entitled to say whatever he wants to say,” Alexander said.

“As SA Rugby, we need to sit down and determine whether we have the appetite to host a World Cup. Considering all the implications and the financial resources required, we have not yet had those discussions.”

He added that South Africa had previously decided against pursuing another bid because the earliest realistic opportunity would likely only arise in 2035.

“The stadiums will need upgrading. There is a lot of other work that needs to be done before hosting an event like that,” Alexander said.

“We hear what the minister is saying, and he has every right to say it, but as an organisation we have not yet seriously considered it.”

Oberholzer echoed those sentiments, emphasising that hosting a Rugby World Cup differs significantly from staging other international sporting events because of the financial model controlled by World Rugby.

“The minister feels strongly about bringing major international events to South Africa, and rightly so,” Oberholzer said.

“We just need to understand the reality of what it takes to host a World Cup in South Africa. It is very different from other sporting codes.”

A major concern raised by the SA Rugby CEO was the current condition of the country’s stadium infrastructure. According to Oberholzer, substantial investment would be needed to bring venues up to world-class standards.

“In South Africa, preventative maintenance at the majority of stadiums is not where it needs to be,” he explained.

“A significant amount would need to be invested to elevate the stadiums to a world-class level — and we must also remember that the broader infrastructure would need attention too.”

Oberholzer also pointed out that SA Rugby does not own the tournament’s commercial rights, limiting the union’s ability to offset costs through sponsorship agreements.

“We do not own the commercial rights, so we cannot simply bring sponsors to the table to reduce the cost of the event,” he said.

“As SA Rugby, the only revenue stream we receive from a World Cup is ticket sales. Meanwhile, the majority of the tournament costs still need to be covered.”

The financial realities become even more challenging when compared with the revenue potential of hosting the event in Europe or emerging markets such as the United States.

“You also have to compare the revenue World Rugby can generate in South Africa with what they can generate in Europe,” Oberholzer added.

“These are decisions made by World Rugby because the tournament is its primary source of income. That revenue supports all 90 member unions.”

According to Oberholzer, any future South African bid would need to guarantee substantial profits for World Rugby before it could realistically be considered.

“If we can secure the necessary government support to guarantee a $700 million profit for World Rugby, then we can start talking — and remember, those are profits they need to make.”

He further revealed that the 2031 Rugby World Cup in the United States is projected to generate approximately $1 billion in profit for World Rugby.

“We would need to prove to World Rugby at that stage that they could make a $1.3 billion profit that we could underwrite in South Africa,” he said.

“Only then can we decide whether it would be worthwhile for us.”

Alexander concluded by stressing that hosting an event of this magnitude requires coordination and funding across multiple government departments, not just the sports ministry.

“Hosting an event like this affects departments such as security and home affairs, and they would all require budgets for it, so it is not simply a matter of putting on rugby matches,” he said.

Despite the logistical and financial challenges, both SA Rugby leaders welcomed McKenzie’s passion for bringing elite international sport back to South Africa.

“We know the minister is enthusiastic, and we appreciate what he is saying,” Alexander added.

“We would welcome the opportunity to engage with him.”