Proposed SA Rugby equity deal with Americans rejected

Statement: SARU’s members on Friday rejected a proposal to accept a potential private equity investment in the sport’s commercial rights – more here: https://t.co/vZ4g6FvnWI

— Springboks (@Springboks) December 6, 2024

The other leading franchise, the Cape Town-based Stormers, could not vote as they are currently in administration.

Despite the successes of the South Africa national team, winners of a record four World Cups, including the last two, SA Rugby faces continuous financial challenges.

“In spite of what we have achieved with the Springboks over the last eight years, we are three times smaller commercially than New Zealand,” said SA Rugby chief executive Rian Oberholzer.

“Their population is about 12 times smaller than ours. Somewhere we are doing something wrong. We have to take our Springbok product abroad. We have outgrown the local market.”

SA Rugby made a profit of just 8.25 million rand ($460,000) last year after a loss of 15.28 million rand the previous year.

‘Guests at own events’

A proposal that former Formula One team owner Eddie Jordan would receive a $7.5 million commission for his role in the Ackerley bid, angered those who opposed the deal.

SA Rugby president Mark Alexander said ahead of the meeting that the commission had been “almost halved” as a result, but that did not lead to a change of heart.

Another area of concern was that a proposal by the Seattle-based company would have led to an overhaul of the way Springboks Tests are organised.

Currently, regions pay up to 15 million rand for the right to stage an international, then retain the profits, which can soar to 70 million.

Under the Ackerley plan, they and SA Rugby would take control of Springbok internationals, greatly limiting potential profits for the hosts.

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“We are guests at our own events. We have to control the whole pot ourselves,” said Oberholzer before the meeting.

Senior SA Rugby official Andy Colquhoun painted a grim picture of SA Rugby finances during a recent podcast.

“SA Rugby has zero reserves. If we have another Covid-type pandemic we would be wiped out as a sport, or we would be playing amateur rugby.

“We need an equity deal, regardless of who it would be with, to create a reserve so that SA Rugby could fund itself through times of trouble.

“Currently, we are a business that breaks even, just about, by the skin of our teeth on an annual basis, but it is always a struggle.

“We hope for a commercial company in which all the broadcast, sponsorship, licensing and eventing rights would be vested, and 80 percent of that would be retained by SA Rugby.”