R1.3bn Springbok equity deal already under threat – report

This Thursday, 17 October, the SARU Council was expected to decide on a private equity investment deal that would have far-reaching ramifications for the Springboks.

A Special General Council (SGC) meeting of the 14 full member unions had been scheduled, at which a formal offer was planned to be presented for consideration.

“If the proposal receives a 75 percent majority of the voting membership, it will trigger the conclusion of an agreement for a private equity company to invest into a newly established company to hold the commercial rights of SA Rugby,” a statement read.

“The game’s rugby affairs – such as the management, coaching, contracting and selection of all national teams as well as competition management – will continue to be the responsibility of SARU.”

However, according to a report from News24, seven out of SARU’s 14 member unions have now signed a letter opposing the proposed deal.

Besides requesting Thursday’s meeting be postponed, the voting unions have raised a number of concerns.

These reportedly range from “investor transparency” to questions about the “financial capacity” of the equity group, while the overarching sentiment is that there is just too much uncertainty around the viability of how this investment would be successfully executed.

The private investors were expected take up a 20 percent stake in an SA Rugby commercial rights company, which will manage and be responsible for the sponsorship, broadcasting, eventing, branding and licensing aspects of the sport.

According to various reports, the deal – should it be finalised – would result in an investment in the region of R1.32 billion ($75 million).

However, some aspects of the negotiations have been met with questions and resistance from local franchises, and a big question has revolved around how it will impact the local game, and whether it would all be positive.

The Springboks’ brand is at the forefront of considerations when it came to this equity deal

The SGC was purported to be culmination of months of intense work behind the scenes since the Ackerley Sports Group (ASG) were chosen as the preferred bidder by SARU’s membership in December 2023.

Rian Oberholzer, the CEO of SA Rugby, clearly has been promoting the idea.

“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 SA Rugby.

“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 have already been held with members and Oberholzer said that a series of visits to member unions would be undertaken before 17 October 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.

“Our performances on the field have kept us near or at the front of the pack for several years, but we have been lagging off the field. This is our opportunity to catch up with our peers in that arena as well.”

WHAT DO YOU THINK OF THIS POTENTIAL DEAL?

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