Royal AM: How Financial Woes and Tax Troubles Tore Club Apart

• Due to unpaid tax debts amounting to R40 million, SARS stepped in, effectively forcing the sale of Royal AM.
• The club's financial instability, including a FIFA-imposed transfer ban, unpaid debts, and loss of sponsorships
• The sale of Royal AM came at a fraction of its original value, representing a major financial loss for Mkhize

In the ever-evolving world of South African football, few stories have been as dramatic as the rise and sudden fall of Royal AM.

Once owned by business mogul Shauwn Mkhize, the club quickly gained prominence in the local football scene, only to crash spectacularly under a mountain of financial struggles.

Briefly News speaks to an SABC journalist, who has chosen to remain anonymous, to shed light on what led to the team's demise and its eventual sale.

Royal AM’s journey from a promising new player in the South African football scene to its eventual financial collapse was inevitable.

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Says our anonymous source, a seasoned journalist at SABC who has been following the club’s rise and fall closely.

Passion vs. Financial Planning

The club was always going to hit a financial wall. Shauwn Mkhize’s passion for football and her drive to make Royal AM a household name was clear, but passion alone doesn’t sustain a professional football club. You need sound financial management, and this is where Royal AM faltered.

According to the journalist, the club’s rapid rise was partly fuelled by Mkhize’s vast business resources, but it was always at risk of being unsustainable.

Royal AM was living in the shadow of its own ambition. There was this rush to compete in the PSL and grab attention, but the financial planning just wasn’t there. The debts, particularly to SARS, should have been a warning sign.

Living on the Edge

The journalist also points out the precarious nature of football clubs in South Africa, where many are heavily reliant on sponsorships, broadcasting deals, and wealthy owners who can afford the operational costs.

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Many of these clubs live paycheck to paycheck, hoping that the next sponsorship deal will bail them out. But when that doesn’t come through, or when there are delays in payments, like with Royal AM’s player salaries, the fallout is inevitable.

SARS as the Tipping Point

When it comes to the SARS issue, the journalist believes it was the tipping point.

You can’t ignore your tax obligations in South Africa, especially with a high-profile club like Royal AM. SARS doesn’t play around when it comes to collections. Once the debt reached R40 million, it was only a matter of time before the authorities stepped in. The club’s tax issues highlighted the broader financial mismanagement that had been building for years.

The Fire Sale

On the sale of the club, the journalist sees it as an unfortunate but necessary conclusion.

SARS stepped in and took control, pushing for the sale. It wasn’t a choice for Mkhize, but a necessity. And, unfortunately, it was a fire sale. The club is now being sold for a fraction of what it was originally valued at. This is a huge financial loss for Mkhize, and a blow to the city of Pietermaritzburg and the football community. The people who were once proud of having a PSL team in their city are now left wondering what could have been.

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Finally, the journalist believes that the collapse of Royal AM could serve as a lesson for other teams in the league.

What happened to Royal AM isn’t unique in the South African football landscape, but it’s a cautionary tale. Clubs must prioritize financial stability over quick wins or flashy investments. If they don’t, they risk the same fate—losing everything.

SARS Set to Auction Royal AM.

Briefly News previously reported that the South African Revenue Service (SARS) is set to auction Royal AM’s top-flight status for R15 million in an effort to recover approximately R40 million in tax debt linked to club president Shauwn Mkhize and her family trust.

Source: Briefly News