SA Rugby’s bid for foreign investment in the organisation was stymied by discontented member unions in December but all is not lost because the warring parties have agreed to a way forward.
On Thursday, the governing body met with representatives from the country’s 14 rugby unions at the neutral territory of OR Tambo Airport.
It was agreed that if equity investment from a third party is to take off, it would be after a consultative process that would include independent input. SA Rugby will not be alone in the cockpit.
In fact, an olive branch to the disaffected unions came from SA Rugby in the form of a proposal that an independent advisor be appointed to guide any new private equity investment proposals.
This follows the failed bid by America’s Ackerley Sports Group (ASG) to invest $75 million in the commercial arm of SA Rugby (mostly the Springboks) in exchange for a 20 percent stake in the national body.
For this to have been green-lighted, SA Rugby (and ASG) had to enjoy 75 percent of the votes when they met with the unions but this failed.
The “party-poopers” were the Bulls, Stormers, Sharks, South Western Districts, Griquas, Boland, and Free State.
They were unhappy with the deal and it was scuppered.
Still, 50 percent of the unions voted for the Ackerley deal to be accepted, so there were grounds to plot a better way forward.
The disaffected unions clubbed together and came up with a suggestion.
In a signed letter that was acknowledged by SA Rugby last Monday, SA Rugby was asked to set up a Transaction Committee of six people to manage any future equity proposals.
The six must consist of two SA Rugby executives appointed by SA Rugby, two executives from SA Rugby's members and/or its commercial affiliates, and two independent persons “with the necessary expertise in managing transactions of this nature, with a good understanding of the appropriate process and governance requirements (appointed by the other four members of the committee).”
It would seem that this is roughly what SA Rugby put on the table at OR Tambo and, with the disaffected unions assuaged, the motion was passed to start afresh with any proposed equity acquisition.
“The first step in the new process would 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 stated after the OR Tambo meeting.
SA Rugby president, Mark Alexander, said: “We have been given a mandate from the General Council to start a new process to review our commercial and financial prospects and define the process.”
The financial advisors will be elected through an independent selection process while one representative each from the franchise unions and non-franchise unions, as well as two independent members of the Executive Council, would form the selection committee, supported by the SA Rugby CEO and CFO.
“We will take a measured and consultative approach under the guidance of the financial advisers as we review the financial challenges and opportunities,” Alexander added.