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SA Rugby open letter: 'The Springboks are not being sold'
By Ian Cameron
SA Rugby have penned an open letter following speculation over the a highly publicised multi-millon dollar investment being made into the union.
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Last we week it was revealed that South African Rugby Union (SARU) is on the verge of completing a multi-million dollar investment with American sports company Ackerley Partners. Ackerley Sports Group (ASG) are currently negotiating a partnership agreement to invest in South African rugby in a bid they claim will see growth for revenue base of the Springboks and SARU’s commercial activities.
The potential deal, still under negotiation and requiring approval from the 14 member unions, aims to create a Commercial Rights Company (CRC) where the private entity would hold a minority share, leaving SA Rugby as the majority shareholder.
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Now SA Rugby CEO Rian Oberholzer has issued an open letter to the nation no less. The letter reads: “As some of you may have read or heard, SA Rugby is engaged in conversations with a private equity company, which wishes to invest in the future commercial growth of our sport.
“That conversation is incomplete, and any agreement that may ultimately be reached, requires the approval of the 14 member unions of SA Rugby before it could be signed.
“But there has been much speculation, misdirection and misunderstanding of what the purpose and practicalities of such an agreement involve. Let me put the record straight.
“If you take only one thing from this letter, let it be this: The Springboks are not being sold – not now and not ever.
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“If the private equity deal is approved, it will entail a company investing in a minority shareholding in the commercial rights to SA Rugby’s activities in a newly created Commercial Rights Company (CRC). SA Rugby will remain the majority shareholder.
“The CRC will not be responsible for the management or selection of any national teams nor for the management of competitions. It will be based in South Africa and have an operational staff transferred from the existing structures, augmented by international expertise and consultants. It will be SA Rugby’s commercial arm, a subsidiary to the mother body.
“What it means in short is that SA Rugby’s commercial activities of selling broadcast and sponsorship rights and running events will continue as before, only in partnership with a company with international experience who believe that our revenues are capable of meaningful increase. This is a good thing.
“That is the “what” is happening, but just as important in answering the question, “why are we doing it”?
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“It’s simple: the Springboks are back-to-back world champions, but off the field the financial sustainability of rugby is far from world class.
The sport took extreme measures to survive the COVID pandemic, but we have zero reserves, and a similarly cataclysmic financial disaster would wipe out the sport as we know it in this country.
Similarly, our peers at international level outperform us in the global commercial markets and we have long needed a step change in our business to generate the income to keep the Springboks on top and, among many other things, help our women one day win their World Cup.
“We can’t produce that step change alone and from the foot of Africa, so we have actively sought a partnership with an organisation possessing the platforms, networks, and relationships to enhance our commercial value.
“We believe we have found potential partners with those attributes who will join us in the CRC, which will be dedicated only to organically elevating our commercial presence.
“I hope I have made it clear that this process is not about a quick cash injection; it is about securing the long-term financial sustainability of the sport of rugby in South Africa so that our international teams can compete on a level playing field.
“It will provide us with reserves to weather future storms and the capital to invest in strategies to put us on a par with international best practice on and off the field.
“We are not selling the Springboks; we are not ceding away any rights; we are building a new company with a minority shareholder to give the Boks (and the rest of rugby) the commercial resources to ensure that the idea of a Three-peat is not just a pipe dream.
“Together with the right commercial partners we will be Stronger.”
I hope it goes well and can help develop the pipeline and the women’s game. I hope it is not just Americans taking advantage of us…
Yes. So calm down everyone.
The boks are not being sold like the ABs.
A foreign company is running the part of the SA structure responsible for revenue. What could possibly go wrong….How much profit are they allowed? What is the constitution of the new company? How easy is it to get them out? If it’s de facto impossible to get them out, they have you.
Read what that SAFU representative has NOT said.
It’s a slippery slope and SA are stepping onto it. I understand the Boks may need cash and I would understand their case more than NZ. But care needed.
“It will be based in South Africa and have an operational staff transferred from the existing structures, augmented by international expertise and consultants. It will be SA Rugby’s commercial arm, a subsidiary to the mother body.”
This ^^^ above for example is high grade BS. Reading between the lines the US experts and consultants will run this entity and the US company hold massive leverage. They don’t need a controlling stake to call the shots.
“Sale of stake in All Blacks to US private equity firm approved” From 2021. Anyone like NZ anymore? Thought so.
Corporations are soulless. Boks fans must draw the line now.