The South African Rugby Union (SARU) have announced that they will appoint a financial institution to review the game’s financial ecosystem in the country.
The decision was taken by SARU’s membership at a general council meeting in Johannesburg on Thursday.
SARU‘s executive council reported back to its union presidents and chief executives at the meeting on what the council feels is the way forward regarding an equity transaction.
Ackerley Sports Group’s private equity investment proposal failed
The governing body’s members mandated the executive council and management to initiate a new process following the failure to reach the required 75% majority of a private equity investment proposal by the Ackerley Sports Group (ASG) in December.
Thirteen member unions took part in the vote on ASG’s private equity investment proposal. As it turned out seven of the unions in question opposed the deal.
The new process will start with the financial institution being appointed through an independent selection process to advise members on all aspects of rugby’s financial sustainability and the role that a potential private equity investment might play.
The first step in the new process will be to appoint the financial institution through an independent selection process to advise members on all aspects of rugby’s financial sustainability and the role that a potential private equity investment might play.
SA Rugby contemplating U-turn on private equity deal – report
“We have been given a new mandate from the general council to start a new process to review our commercial and financial prospects and define the process,” said SARU president Mark Alexander.
He added that that the financial advisors would be chosen through an independent selection process to provide full confidence in the process.
One representative each from the franchise unions and non-franchise unions as well as two independent members of SARU’s executive council will form the selection committee, supported by SA Rugby’s chief executive and chief financial officer.
‘A measured and consultative approach’ to be taken
“We will take a measured and consultative approach under the guidance of the financial advisers as we review the financial challenges and opportunities,” revealed Alexander.
The council was also advised that the highest level of financial distribution, which was previously agreed by the members (known as the gold model), was guaranteed for the three years thanks to an acceleration in commercial sales.
Alexander said although a loss would be reported for 2024 the work undertaken by SARU’s management and strong commercial sales for 2025 had secured the organisation’s financial prospects for the next three years.
Src: Planetrugby.com - https://www.planetrugby.com/news/sa-rugbys-membership-make-significant-decision-in-plotting-their-financial-future
