‘Springboks are not for sale’
REASSURANCE: SA RUGBY CEO PENS OPEN LETTER TO FANS ON PRIVATE EQUITY AGREEMENT Oberholzer clears up ‘speculation’ and ‘misdirection’ of deal.
SA Rugby CEO Rian Oberholzer has written an open letter to South Africa detailing the ins and outs of a potential private equity deal. He deals with several issues on the matter but states: “The Springboks are not being sold – not now and not ever.”
“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,” he writes.
“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.”
He said there had been “much speculation, misdirection and misunderstanding of what the purpose and practicalities of such an agreement involve.
“If you take only one thing from this letter, let it be this: the Springboks are not being sold – not now and not ever.”
He said that if the private equity deal was approved, it would 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).
But SA Rugby would 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.”
He said the body’s commercial activities – of selling broadcast and sponsorship rights and running events – will continue, but in partnership with a company with international experience.
He said the company believed “our revenues are capable of meaningful increase. This is a good thing.”
Oberholzer said the initiative was happening because, while the Springboks are number one in the world on 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.”
Other rugby-playing nations outperform SA financially 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,” he said. –