Sharks converge

It probably wasn’t his doing, but John Smit’s tenure as Sharks CEO will live in memory as the picture of SA’s 20-year struggle to come to terms with professionalism, both in how he got to the hot seat and what transpired thereafter.

Smit was plucked from the Saracens changing room and sent straight to the Sharks boardroom in the middle of 2013. And by the time he landed back in the country he had already given then head coach John Plumtree the “DCM” — Don’t Come Monday.

Smit is one of SA rugby’s most celebrated figures and the 2007 World Cup-winning captain’s achievements on the field would be hard to match. The board’s plan in 2013 was to mould him into a latter-day Brian van Zyl: both are Pretoria Boys’ High School alumni, both are adopted sons of Durban. They were cut from the same cloth, apparently.

Van Zyl was CEO between 1994, three years before professionalism officially began, and 2013. He turned the former Banana Boys into a R14m annual profit entity and the sport’s biggest brand. They had the coolest gadgets and the hottest babes too. They reached Superbrand status twice and innovation was the daily modus operandi. It helped that they got into the Super Rugby playoffs often and won the Currie Cup four times.

One day, without warning, Van Zyl was told by the board to make way for Smit. It was a classic amateur-era move and the implications weren’t well thought out.

After the early euphoria of winning the Currie Cup that year, the Sharks struggled on and off the field. The Kings Park crowd dwindled and so did profits. But Sharks chairman Stephen Saad says the downward trajectory in revenue was endemic in all Super Rugby teams and that Smit rescued them from incurring substantial losses.

“John brought a freshness and energy to the brand, and he brought sponsors. He drove the revenue and was successful at it,” says Saad.

“He brought Growthpoint and Cell C. When he came we didn’t have a title sponsor because Mr Price had pulled out and we were in a panic. We thought we had another cellphone company but it didn’t happen.”

In the months before Smit handed over the reins to another former Sharks captain, Gary Teichmann, who started last week, a public spat played out in the Durban press between Smit and Van Zyl. Van Zyl said the franchise, which has been struggling to break even in the past two financial years, would not be in a seemingly perilous position if he was still at the helm. We’ll never know for sure, but the claim irked Smit. When Smit brought Cell C as a title sponsor in 2013, it was the biggest in Super Rugby in the country, valued at R28m.

“I was there for 20 years but I could sense that it was going to get tougher,” said Van Zyl.

“The Sharks we now know came into existence in 2000 and in the time I had the executive responsibility of running the place I never made a loss. I would have cut my cloth accordingly. I think the Sharks have lost R40m between 2013 and 2014. I would have cut player costs and wouldn’t have paid out settlements to get rid of coaches.”

But Smit was fighting a battle bigger than himself and the franchise. Around 2006 something happened which later changed the face of SA and world rugby. A French comic tycoon named Mourad Boudjellal bought Top 14 club Toulon when France opened clubs up to private ownership.

Since then, he has increased Toulon’s turnover by 500% and signed a galaxy of world stars like Bryan Habana, Matt Giteau, George Gregan, Jonny Wilkinson, Bakkies Botha, Sonny Bill Williams and Juan Smith. South Africans rushed north to cash in on the euro and countries like Japan and the UK saw what kind of pull superior currency had.

SA rugby was left behind and is now paying the price because SA Rugby’s constitution won’t allow more than 49% franchise ownership to private entities. No fewer than 40 players have left the country this year, including some greats like Schalk Burger and JP Pietersen, and some like Marcel Coetzee will leave a gaping hole in the Springboks. More than 300 ply their trade outside SA.

“My personal view is that it cannot carry on like it is,” says Saad. “You should not have a top brand like the Stormers or the Sharks or the Blue Bulls not making money. It’s a crazy situation. You’ve got to say there’s something wrong with the business model. This is an inherited problem from the amateur game.”

Smit discovered while in charge that a second division French club had a bigger budget than an SA franchise.

Before he left, Smit cushioned the blow on Teichmann by getting the Cell C sponsorship renewed and sold 9% of KZNRU’s shares to the other shareholder, SuperSport, for R40m, funds that were used to service debt.

Smit, however, says full privatisation needs to be well thought out before SA Rugby relaxes its laws.

“As much as there are benefits of privatising franchises like they’ve done in the UK and France, we need the economics to be able to facilitate that,” he says. “Privatisation would help but there’s a huge amount of change that must take place, starting with the SA Rugby constitution, which doesn’t allow it at the moment.”

Rugby’s money problems extend further to the Southern Kings and Eastern Province Rugby Union (EPRU). About a year ago, when the Cheeky Watson-led EPRU was heading for ruin, Boudjellal sent an expression of interest to buy a stake in its Super Rugby franchise. Noone followed up the call.

Thus, the EPRU, which has been provisionally liquidated after failing to pay salaries since September 2015, is facing a painful death.