SA Rugby have provided further clarity on the state of negotiations with preferred equity partner Ackerley Sports Group (ASG), while addressing concerns raised by the four franchises.
In an official statement released on Wednesday afternoon, SA Rugby provided answers to some of the major questions surrounding the potential equity deal with ASG.
This comes after the four main franchises – the Vodacom Bulls, Sharks, DHL Stormers and Lions – reportedly penned a collective letter to SA Rugby expressing concern over the deal with the shelf company.
The company is an expansion of family-owned investment firm named Ackerley Partners, who have stakes in several Seattle-based sporting franchises, including MLR’s Seattle Seawolves. It recently purchased a minority stake in English football team Leeds United.
In the statement, SA Rugby confirmed that the deal cannot be signed off without the approval of the governing body’s member unions, “the sport’s shareholders”.
“Once a proposed final structure for the new company and its relationship with the existing SA Rugby structure has been finalised a series of workshops and information sessions will be undertaken to allow member unions to fully interrogate the deal,” the statement read. “That structure is still a work in progress.”
While concerns have been raised about the impact that the deal could have on the Springboks, SA Rugby assured that “all national teams will retain their existing management and ownership models”.
“As national institutions, the Springboks and SA Rugby are not transferable to private equity,” the statement said. “This strategy is about harnessing our commercial rights in partnership with an organisation, creating a separate entity dedicated to elevating our commercial profile.
“The new commercial entity will remit an annual fee to cover all current operations of SA Rugby – from paying the Boks to providing funding to the unions.”
SA Rugby were previously reported to be in talks with Luxembourg-based investment firm CVC Partners over a private equity deal, which holds a stake in the Six Nations.
In the statement, SA Rugby said that ASG was “unanimously chosen” by the member unions of SA Rugby, including the four franchises, as the preferred equity partner during a general meeting on 7 December. ASG and CVC made presentations during the meeting.
“ASG’s offer primarily focuses on immediate financial gain and guaranteed income, with lower thresholds for contingency payments, presenting a straightforward proposal for a commercial partnership, which we believe could offer comprehensive advantages to our organization,” SA Rugby said.
“The ultimate decision will hinge on balancing the immediate financial requirements with the long-term strategic objectives of our rugby organisation.”
“A private equity partnership offers not just an immediate financial boost but also crucially provides the expertise, networks, and resources necessary to enhance the commercial value of South African rugby,” SA Rugby explained, over the importance of an equity deal. “This collaboration can position SA Rugby, the Springboks and, eventually, other teams for greater global prominence.”
SA Rugby emphasised that while talks with ASG are ongoing, the deal can only be approved with the go-ahead from the 14 member unions.
“Our team was mandated to pursue further discussion. The members of SA Rugby have agreed on the primary conditions, however, substantial effort is ongoing behind the scenes to finalise the specifics. Since the finer points are critical, no final approval will be granted until our members have been thoroughly briefed and a mandate secured. This process can only be agreed upon once our 14 members have approved it.”
In terms of the next steps, SA Rugby said that once the post-deal structure nears finalisation, it will be workshopped with the member unions. A conclusive proposal will be presented to the members during the annual general meeting on 30 May, for approval or rejection.
Photo: Anne-Christine POUJOULAT / AFP
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Src: sarugbymag.co.za
