REACTION: The South African Rugby Union remains determined to ‘forge ahead’ with negotiations for an equity deal with the Ackerley Sports Group.
The stand-off between SARU and seven unions – which include the four professional franchises – took a couple of intriguing twists on Wednesday.
Early in the day SARU postponed a planned Special General Meeting to consider a proposal to conclude a private equity investment with ASG.
The about-turn came at the request of Gayton McKenzie, the Minister of Sport, Arts and Culture.
The meeting was scheduled to take place in Cape Town on Thursday, October 17, but will now be rescheduled.
Details of the unhappiness of the seven unions – which include the professional arms of Lions, Bulls, Sharks and Stormers – became public on Tuesday.
A letter, addressed to SARU President Mark Alexander and CEO Rian Oberholzer, was leaked to the media.
Now, readily available in the public domain, it reveals the many questions being asked by the seven outlets over the ‘secretive nature’ of the negotiations.
“While we understand and support the need for SARU to explore opportunities for international brand growth, the purported contribution and involvement of ASG in these efforts remains unclear,” the letter states.
The concerns include commercial revenue growth, Test match hosting, new competitions and ASG’s track record.
Calling it a ‘flawed deal’, they claim the financial terms of the transaction and transaction structure are “troubling for several reasons”.
“The valuation metrics of the transaction compare poorly to recent transaction multiples – like the All Blacks’ Silver Lake deal,” the letter states.
“One of the most recognizable and marketable brands, the Springboks, is being traded to an outside investor at a deep discount compared to peers.”
SARU addressed the concerns of the seven during a meeting of the Presidents’ Council in Cape Town on Wednesday.
In a statement SARU said a task team was mandated, following the meeting, to provide more information on key issues for additional clarification to members.
“We remain committed to transparency and accountability,” SARU President Mark Alexander said.
“It is important to correct the misinformation and posturing that has surfaced in the media.
“We believe our organisation has a long-standing track record for good governance and responsible management, as well as nation-building representative teams.
“Throughout this process, we have diligently adhered to all protocols and followed due process.
“Our actions have consistently been guided by the principles of integrity and fairness.
“We would urge all stakeholders and the public to rely on verified, accurate information and to support our ongoing efforts to uphold the high standards of the South African game in delivering a sustainable future for the sport.
“Our commitment to the growth and success of the sport in our country remains unwavering.”
The SGM scheduled for Thursday, to consider the proposal, was postponed at the request of the Minister of Sport, Arts, and Culture Mr Gayton McKenzie, in order to provide additional information as requested.
A new date for the SGM before year-end will only be confirmed after the engagement with the Minister.
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