Cycling South Africa Announcements – 09 February 2012

[Matt]

Cycling South Africa Announcements – 09 February 2012

 

1. Cycling South Africa hereby announces the resignation of David Bellairs who served on the Board as Director Recreation. The Board would like to thank David for his service and wish him well.

 

2. The recent media article announcing the disaffiliation of Pedal Power Association from Cycling South Africa does come as a shock as it precedes the constitution-discussion meeting scheduled for 18 February 2012 where all affiliates will have an opportunity to raise any concerns. Like any other affiliate, PPA no doubt is an important entity and has done a significant amount of work to the benefit of not only those involved in cycling, but to the broader public. We sincerely appreciate the work being done by PPA.

 

3. As mentioned with the cancellation announcement of the 2012 Tour of South Africa, the financial issues pertaining to the Tour were to be resolved after meetings with the joint Board comprising Cycling SA and Primedia. Primedia have in the meantime issued a letter requesting payment of outstanding finances. Cycling SA will be engaging with Primedia to resolve this matter.

 

Click here to view the article

[Gerhardc]

Charles Dickens quote......it was the best of times, it was the worst of times....(Greg Till favourite)

[Heckflosse]

For whatever it worth, I'm sticking to PPA, they continue to help me at my level.

[Tiny K]

For whatever it worth, I'm sticking to PPA, they continue to help me at my level.

 

+1

 

Edit: PPA is like the CSA of the Western Cape.

Edited February 9, 2012 by Tiny K

[fandacious]

Wait - does this mean we need CSA licenses for all road races?

 

currently if you were a PPA member you didnt need a day license. Does this change now?

[johannrissik]

May I respectfully suggest that if CSA can find it's own R-sole, that they then disappear up it?

[kosmonooit]

No mention of the Lotto funding issue ... ?

[GrumpyOldGuy]

How come they owe Primedia money.?

[Kranswurm]

How come they owe Primedia money.?

Tour of South Africa

 

And Lotto has not paid CSA

 

 

And they are in the financial dwang to put it mildly.

 

There is no way they could go ahead with the event this year with a negative bank balance

Edited February 9, 2012 by Kranswurm

[kosmonooit]

Something to do with Tour of SA

[GrumpyOldGuy]

Tour of South Africa

 

And Lotto has not paid CSA

 

Oh, okay.

 

............but then I dont understand, did Lotto promise the money on a certain date and then didnt pay up, or was there a technical issue and now Lotto do's not have to pay up - there's a difference.

[Kranswurm]

Oh, okay.

 

............but then I dont understand, did Lotto promise the money on a certain date and then didnt pay up, or was there a technical issue and now Lotto do's not have to pay up - there's a difference.

 

Google it.The article is there.Lotto have requested or demanded some kind of audit.

As far as I can see getting money out of Lotto if you dont fall into the "other" category inigh impossible.Even if promised.They must take some blame in all this

[GrumpyOldGuy]

Google it.The article is there.Lotto have requested or demanded some kind of audit.

As far as I can see getting money out of Lotto if you dont fall into the "other" category inigh impossible.Even if promised.They must take some blame in all this

 

You mean Lotto must take some blame or Primedia or CSA?

 

I am with the latter, who go's ahead and borrows money against funding which may or may not be forthcoming, surely in this day and age its prudent to make sure your ducks are legal and in a row before you start spending money you effectively dont have?.

[kosmonooit]

This is from their Dec newsletter:

 

 

In the on-going media enquiry into the affairs of Cycling South Africa, the following questions have been posed to Cycling SA and may find their way into the media. We feel it pertinent to advise you, the cyclist and a valued member of Cycling SA first hand, to ensure that you are assured of the good intentions of Cycling SA at all times.

 

1. Accelerate announced in May 2010 that they have been appointed as the commercial agent of Cycling SA. Why did Cycling SA choose Accelerate?

The choice of Accelerate Sport came down to sound business principles and the meeting of the requirements set out by Cycling South Africa. Cycling SA had approached various sporting agencies, similar to Accelerate Sport, with a requirement specification. Accelerate Sport responded with a very good proposal and assisted in developing Cycling SA’s 2020 vision statement.

 

2. Please explain the nature of Accelerate's relationship with Cycling SA and their main role and function.

Accelerate is appointed exclusive commercial and strategic marketing agent iro the commercial rights to assist Cycling SA in achieving their 2020 vision. Accelerate Sport responded to a tender to be the commercial partner of Cycling SA. Accelerate Sport specialise in the procurement and design of sponsorship packages for sporting bodies in South Africa. Their role is to monitor the commercial market to find mutually compatible sponsors for all the sporting codes within cycling in South Africa, and ensure that Cycling SA can meet the market expectations of those partners. They have specialist personnel who understand both the sporting market needs and the commercial market wants.

 

3. You confirmed during our discussion that Accelerate also assists Cycling SA with its Lotto grant applications. How does their involvement in this work? Are they involved in the financial planning to determine the amount Cycling SA applies for from the NLDTF? Do they handle the documents you submit to the NLDTF? Have they ever made any kind of promise to Cycling SA on the amount you would be granted by the NLDTF? Who from Accelerate is involved in this process with Cycling SA? And, what is the amount Cycling SA applied for, how much have been allocated to Cycling SA and what is the money intended for?

a. Part of the package negotiated with Accelerate Sport is to assist Cycling SA to procure funding from any source, including but not limited to the National Lottery Development Trust Fund (NLDTF). There are many specialists in this field who design Lotto grant packages, ensure the ethical compliance with the requirements of the NLDTF, and ensure we submit all the correct documentation. Accelerate Sport is just one of these companies. In previous years, Cycling SA has handled the process themselves, but with limited resources and the specialist staff required, it was decided to outsource this highly specialised function;

b. Cycling SA determines its own needs and requirements – we present this to Accelerate and they advise in respect of how we need to package the application, what information is required to accompany the application, and by when the application has to be submitted;

c. Cycling SA applied for an initial grant of R21million with an increment per annum, resulting in R28million over 5 years. Cycling SA has only been granted around a third of this amount. The money is intended to achieve the goals set out in Cycling SA’s 2020 vision, which is available on the Cycling SA website.

 

4. What does the contract between Cycling SA and Accelerate say about the commission to be paid to Accelerate? My information is that Accelerate is entitled to 10% of your total Lotto grant. Is this correct?

a. Accelerate receive a commission for any sponsorship monies that they procure for Cycling SA, for their services rendered, as per prevailing industry standards. For the lotto grant they receive a predetermined management fee, which is funded through Cycling SA’s normal income streams. It is vitally important that we ensure that any funds from lotto are utilised for exactly what the lotto granted the funds for. Lotto funding is ring fenced, and both Cycling SA’s auditors and the lotto’s auditors keep track of the lotto funding spend.

b. In respect of the Lotto funding, a management fee was agreed upon based on increasing the grant amount received compared to prior years of R4mill. The amount is calculated based on a percentage of grant in excess of R4mill. The total that will be paid to Accelerate will equate to3.75% of the total Lotto grant. It must be noted that these management fees are not paid out of the funds received from the Lotto! They are paid from our operating budget.

 

5. You also said that should the Lotto grant Cycling SA an amount of, for example, R100, the total R100 will be spent on the specific purposes Cycling SA applied for (e.g. transformation, training, etc). But if Accelerate is entitled to a commission from your allocated grant, where does the money to pay them come from?

Accelerate Sports’ management fee is paid from the operational budget, and NOT from the funds received from Lotto. Accelerate Sports’ management fee is paid from income generated by Cycling SA’s normal course of business. Cycling SA is not entirely dependent on Lotto grants; in fact the organisation is very profitable through its current business model. We require lotto funding to fast track our ability to develop talent and achieve the country’s sporting goals. Our current profitability and cash flow is due to the sound principles established by the Board. Cycling SA has not been in this favourable position before and did not have sufficient funds to meet the demands in achieving our vision and goals of both the cycling public and the country as a whole. Achieving these goals and objectives results in a higher profile for the sport, which brings in funding from other commercial partners (rights packages, sponsorships), increases participation and drives revenue. Cycling SA is continually striving to find ways to become less dependent on grants.

 

6. This leads me to the next question, how much money has Cycling SA paid over to Accelerate since the contract between the two was signed?

Cycling SA has only ever paid Accelerate the amounts agreed to in terms of the contracts. We believe these amounts are market related and in line with standard business practice.

 

7. What are the payments from Cycling SA to Accelerate reflected as in your financials?

These can be found in the Income Statement under “Advertising and Promotions – all Cycling SA’s financials and up-to-date management accounts are available on www.cyclingsa.com <http://www.cyclingsa.com>, click on the “Governance” tab.

 

8. What is Cycling SA's main source of income?

Membership fees, rider levies, calendar fees, day license fees.

 

9. You are by now obviously aware that Mr Gideon Sam, the current chairman of the NLDTF distribution agency responsible for sports, is also a director of Accelerate. Has this issue ever been raised in discussions with Accelerate around your applications for funding from the NLDTF?

Mr. Sam is the Chairman of Accelerate Sport, which is clearly stated on their website and is therefore common public knowledge. This is nothing new, nor sensational. Neither Cycling SA nor Accelerate Sport have had any reason to “hide” this fact, as we believe in good corporate governance principles as determined by the King Commission. We believe that Accelerate Sports have the same sound business principles and ethics, and have such declared any interests to whomever they may be required to do so. Mr. Sam’s position on the board of Accelerate Sport has nothing to do with our applications, as we do not deal with Mr. Sam. Accelerate Sport deal with many other companies / organisations, including, but not limited to SARU, The Nelson Mandela Metropole, FIFA, etc.

[GrumpyOldGuy]

This is from their Dec newsletter:

 

 

In the on-going media enquiry into the affairs of Cycling South Africa, the following questions have been posed to Cycling SA and may find their way into the media. We feel it pertinent to advise you, the cyclist and a valued member of Cycling SA first hand, to ensure that you are assured of the good intentions of Cycling SA at all times.

 

1. Accelerate announced in May 2010 that they have been appointed as the commercial agent of Cycling SA. Why did Cycling SA choose Accelerate?

The choice of Accelerate Sport came down to sound business principles and the meeting of the requirements set out by Cycling South Africa. Cycling SA had approached various sporting agencies, similar to Accelerate Sport, with a requirement specification. Accelerate Sport responded with a very good proposal and assisted in developing Cycling SA’s 2020 vision statement.

 

2. Please explain the nature of Accelerate's relationship with Cycling SA and their main role and function.

Accelerate is appointed exclusive commercial and strategic marketing agent iro the commercial rights to assist Cycling SA in achieving their 2020 vision. Accelerate Sport responded to a tender to be the commercial partner of Cycling SA. Accelerate Sport specialise in the procurement and design of sponsorship packages for sporting bodies in South Africa. Their role is to monitor the commercial market to find mutually compatible sponsors for all the sporting codes within cycling in South Africa, and ensure that Cycling SA can meet the market expectations of those partners. They have specialist personnel who understand both the sporting market needs and the commercial market wants.

 

3. You confirmed during our discussion that Accelerate also assists Cycling SA with its Lotto grant applications. How does their involvement in this work? Are they involved in the financial planning to determine the amount Cycling SA applies for from the NLDTF? Do they handle the documents you submit to the NLDTF? Have they ever made any kind of promise to Cycling SA on the amount you would be granted by the NLDTF? Who from Accelerate is involved in this process with Cycling SA? And, what is the amount Cycling SA applied for, how much have been allocated to Cycling SA and what is the money intended for?

a. Part of the package negotiated with Accelerate Sport is to assist Cycling SA to procure funding from any source, including but not limited to the National Lottery Development Trust Fund (NLDTF). There are many specialists in this field who design Lotto grant packages, ensure the ethical compliance with the requirements of the NLDTF, and ensure we submit all the correct documentation. Accelerate Sport is just one of these companies. In previous years, Cycling SA has handled the process themselves, but with limited resources and the specialist staff required, it was decided to outsource this highly specialised function;

b. Cycling SA determines its own needs and requirements – we present this to Accelerate and they advise in respect of how we need to package the application, what information is required to accompany the application, and by when the application has to be submitted;

c. Cycling SA applied for an initial grant of R21million with an increment per annum, resulting in R28million over 5 years. Cycling SA has only been granted around a third of this amount. The money is intended to achieve the goals set out in Cycling SA’s 2020 vision, which is available on the Cycling SA website.

 

4. What does the contract between Cycling SA and Accelerate say about the commission to be paid to Accelerate? My information is that Accelerate is entitled to 10% of your total Lotto grant. Is this correct?

a. Accelerate receive a commission for any sponsorship monies that they procure for Cycling SA, for their services rendered, as per prevailing industry standards. For the lotto grant they receive a predetermined management fee, which is funded through Cycling SA’s normal income streams. It is vitally important that we ensure that any funds from lotto are utilised for exactly what the lotto granted the funds for. Lotto funding is ring fenced, and both Cycling SA’s auditors and the lotto’s auditors keep track of the lotto funding spend.

b. In respect of the Lotto funding, a management fee was agreed upon based on increasing the grant amount received compared to prior years of R4mill. The amount is calculated based on a percentage of grant in excess of R4mill. The total that will be paid to Accelerate will equate to3.75% of the total Lotto grant. It must be noted that these management fees are not paid out of the funds received from the Lotto! They are paid from our operating budget.

 

5. You also said that should the Lotto grant Cycling SA an amount of, for example, R100, the total R100 will be spent on the specific purposes Cycling SA applied for (e.g. transformation, training, etc). But if Accelerate is entitled to a commission from your allocated grant, where does the money to pay them come from?

Accelerate Sports’ management fee is paid from the operational budget, and NOT from the funds received from Lotto. Accelerate Sports’ management fee is paid from income generated by Cycling SA’s normal course of business. Cycling SA is not entirely dependent on Lotto grants; in fact the organisation is very profitable through its current business model. We require lotto funding to fast track our ability to develop talent and achieve the country’s sporting goals. Our current profitability and cash flow is due to the sound principles established by the Board. Cycling SA has not been in this favourable position before and did not have sufficient funds to meet the demands in achieving our vision and goals of both the cycling public and the country as a whole. Achieving these goals and objectives results in a higher profile for the sport, which brings in funding from other commercial partners (rights packages, sponsorships), increases participation and drives revenue. Cycling SA is continually striving to find ways to become less dependent on grants.

 

6. This leads me to the next question, how much money has Cycling SA paid over to Accelerate since the contract between the two was signed?

Cycling SA has only ever paid Accelerate the amounts agreed to in terms of the contracts. We believe these amounts are market related and in line with standard business practice.

 

7. What are the payments from Cycling SA to Accelerate reflected as in your financials?

These can be found in the Income Statement under “Advertising and Promotions – all Cycling SA’s financials and up-to-date management accounts are available on www.cyclingsa.com <http://www.cyclingsa.com>, click on the “Governance” tab.

 

8. What is Cycling SA's main source of income?

Membership fees, rider levies, calendar fees, day license fees.

 

9. You are by now obviously aware that Mr Gideon Sam, the current chairman of the NLDTF distribution agency responsible for sports, is also a director of Accelerate. Has this issue ever been raised in discussions with Accelerate around your applications for funding from the NLDTF?

Mr. Sam is the Chairman of Accelerate Sport, which is clearly stated on their website and is therefore common public knowledge. This is nothing new, nor sensational. Neither Cycling SA nor Accelerate Sport have had any reason to “hide” this fact, as we believe in good corporate governance principles as determined by the King Commission. We believe that Accelerate Sports have the same sound business principles and ethics, and have such declared any interests to whomever they may be required to do so. Mr. Sam’s position on the board of Accelerate Sport has nothing to do with our applications, as we do not deal with Mr. Sam. Accelerate Sport deal with many other companies / organisations, including, but not limited to SARU, The Nelson Mandela Metropole, FIFA, etc.

 

......ummmm, do you maybe have the Readers digest version.? ......a bit long for me.

Edited February 9, 2012 by GrumpyOldGuy

[johannrissik]

Die hele blerrie ding stink.