NEWS: SA Rugby is currently dancing like a cat on a hot plate as it seems the equite deal with Ackerley Sports group (ASG) is in jeopardy and not supported by all the union members as previously reported by the mother body.
The R1.3 billion private equity deal with ASG seem to be in jeopardy after some of the country’s rugby unions and franchises voiced their concerns in a letter to SA Rugby.
Top unions, such as the Lions, Blue Bulls, Sharks and Western Province, have asked Saru president Mark Alexander and CEO Rian Oberholzer to postpone the General Council meeting scheduled for Thursday, October 17.
The deal meant SARU would sell 20% of it’s stake in its commercial arm to ASG, but it looks unlikely to proceed when the council meets to vote on Thursday.
According to News24 seven of Saru’s 14 member unions had signed a letter opposing the deal. The unions are pushing for a postponement of the vote and are calling for an alternative proposal to be presented in three months.
For the ASG deal to go through, 75% of the unions would need to back the plan. However, with the opposition mounting, the deal appears to be on the verge of collapse.
Saru conducted a roadshow to rally support for the proposal, and even sent out a release last week thanking their union membes for support the proposed deal.
But serious concerns about the deal’s transparency and long-term impact have surfaced.
Top of their opposition to the deal is the lack of clarity about ASG’s consortium members and the sources of their funding. The unions argue that there’s insufficient transparency and question whether ASG has the financial capacity to execute the transaction fully.
The financial independence of SA Rugby has also been called into question with the unions warning that the deal risks permanent changes to SA Rugby’s commercial structure, including the Springbok brand.
The unions are of the opinion that investor involvement will hamper the growth and development of the sport and they question why Saru is turning to a private equity partner rather than relying on its own commercial expertise.
Earlier in the month Oberholzer stated: “We are very pleased to have arrived at this point and believe we will be able to table an offer to our members that makes commercial and business sense,” said Rian Oberholzer, the CEO of SARU.
“This is a watershed moment for rugby in South Africa as we attempt to ‘globalise’ the Springbok brand in the way that our peers in New Zealand have.
“Private investment will bring financial security as well as the capital investment and global experience and networks to enhance how we communicate, how we do things and how we interact with our stakeholders.”
A series of information sessions had been held with members and Oberholzer said that a series of visits to member unions would be undertaken before October 17 to further explain any areas of uncertainty.
“Private investment has taken place in several of our member unions and is commonplace in global sport,” said Oberholzer.
