Privatising the game may not be the best route

Privatising rugby in South Africa has the potential to bring in a fresh wave of professionalism into the game, but it also poses a danger to the spine of the game.

This week, Bulls (Pty) Ltd part owner, Remgro’s CEO Jannie Durand, said the privatisation of rugby was the only way to make the sport fully professional and sustainable.

It’s no secret that South Africa is losing players to cash-flush clubs in the UK, Ireland, France as well as Japan, as the domestic franchises and unions battle to keep up with wage inflation and a weak rand.

Most of the current administrators are amateur era gurus, who’ve been elected to their positions by the club structures that form part of the amateur wing, which guards the old status quo jealously.

While there are merits for Durand’s argument, you cannot put lipstick on a pig. Rugby is in a deeply fractured state at the moment, especially at boardroom level.

The South African Rugby Union (SA Rugby) opened up the possibility of majority private ownership a few years ago when they allowed the purchase of up to 76 percent of a stake in the country’s franchises.

Private companies were already knocking on the door, with Remgro owning a stake in the Bulls and SuperSport having a share of the Sharks franchise, while Glasfit chairman Altmann Allers has steadily invested in the Lions.

We must be wary of those that campaign strongly for the sport’s privatisation. The Danger-Gevaar signs are everywhere.

The biggest threat is to transformation interests. With privatisation, I fear there will be a lot of backward steps once rugby is fully in the hands of private enterprises. Those who pump in millions will want to sign off on the team sheets. He who pays the piper decides the tune.

At the moment we are struggling to get black coaches into the upper echelons of the coaching ladder – especially black African coaches.

On the pitch, although there have been many gains, Rassie Erasmus’ Springboks fell short of their 2018 transformation target of an average of 45% black representation, managing 38%.

Rugby is also for sale on the cheap, and this is where the Remgros of this world really want to take advantage. Most unions are in debt, with some having filed for liquidation.

Even the consortium that bought a 74% stake at the Southern Kings scored a bargain you wouldn’t find at Oriental Plaza. They took over the franchise’s R45m debt, paying R5m a year to SA Rugby over four years. Moreover, they will use sponsorship money, broadcast rights funds and municipal allowances (estimated at R6m p.a.) to service the R25m balance of the debt.

The consortium didn’t bring in any hard capital. But when they sell their stake, they will make a killing.

My view is that we need to invest more into the actual growth of the game in black areas. Black audiences is where rugby’s growth lies.

Black people, who were kept out of the game for a century, are rugby hungry. Corporates – at least the smart ones – are quickly realising that their growth lies within the mass market, where black people make up the majority.

Take former Bok sponsors, Absa. They cut their sponsorship of the national rugby team but they were smart enough to retain their Premier Soccer League sponsorship because they value black people’s economic might.

While rugby is losing sponsors in droves, corporates are tripping over themselves to get onto the soccer gravy train. Even Outsurance, who for a long time were associated with rugby referees, have now thrown their lot in with the South African Football Association and are supporting soccer referees.

Once we have tapped into a new audience we will attract new sponsors, and the market value of rugby, as a whole, will rise. Only then will private ownership bring in the millions everyone is dreaming about.