Springboks owners tell lawmakers private equity deal is key to survival
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South Africa's fly-half Jordan Hendrikse diving to score a try during the Autumn Nations Series International rugby union Test match between Wales and South Africa on Nov 23.
PHOTO: AFP
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CAPE TOWN – The body that oversees the reigning rugby union world champions, South Africa’s Springboks, told lawmakers on Dec 4 it faces the risk of collapse if it does not boost revenue.
“We don’t have a reserve fund, we’re a break-even organisation,” South Africa Rugby Union (SA Rugby) president Mark Alexander said in defence of a proposal to loosen control of its commercial rights through a deal with Seattle-based Ackerley Sports Group.
If the organisation has to endure another crisis similar to that experienced during the coronavirus pandemic then “we’ll have to close our doors”, he said in a presentation to parliament’s sports committee in Cape Town.
The proposed deal with Ackerley, which will be voted on this week, has caused a storm of controversy and a string of front-page headlines. The loosening of local control over a team whose success and multiracial make up has made the one-time icon of white supremacy under apartheid into a symbol of transformation has stoked concern.
The country’s sports minister and the unions that run some of its biggest rugby teams, which are linked to some of the country’s richest men, queried the benefits of the deal and the lack of South African participation.
SA Rugby, which has barely turned a profit for over a decade despite revenue climbing threefold, plans to sell a 20 per cent stake in a newly created commercial rights company for US$75 million (S$100.5 million).
Ackerley would take three of the seven voting board seats in the company as well as have the right to appoint a chairman, effectively controlling the Springbok Rugby brand’s rights, SA Rugby has said previously.
That would follow a trend among national federations of successful rugby teams, most notably New Zealand’s All Blacks, to raise funds from private equity. Other national rugby bodies are also struggling with their finances, with The Telegraph reporting in November that England’s organisation is set to post a record annual loss of about £40 million (S$68.2 million).
The vote was postponed from October after a request from Sports Minister Gayton McKenzie that the government be briefed.
Rugby unions that run clubs linked to South Africa’s richest man, Johann Rupert; Patrice Motsepe, the country’s only black billionaire; and pharmaceutical tycoon Stephen Saad are among seven of SA Rugby’s 14 member associations that signed a letter in October opposing the deal.
The unions raised concerns about the fee structure and governance aspects of the deal, as well as potential changes to SA Rugby’s commercialisation and revenue mechanisms.
Meanwhile, France have declined overtures from New Zealand to play a Test in the United States in the summer of 2025, the French Rugby Federation president Florian Grill told AFP, confirming a report in the newspaper L’Equipe.
France are due to play a three-Test Series against New Zealand but resisted a request to play the last of those matches in the United States.
“We considered that there was a double time difference to manage and a double change of season,” Grill told AFP.
“We consulted with our medical committee and it was not reasonable for the health of the players, as it could have caused injuries, and our priority is the health of the players.” BLOOMBERG, AFP
