Bailout deal for EP hinges on Saru move
SA RUGBY bosses must agree to raise the stake for private ownership to 74% today to keep hopes of a proposed partnership deal between the cash- strapped EP Rugby Union and Pro Rugby North America alive.
Private ownership is one of several issues that will be thrashed out when representatives of South Africa’s 14 rugby unions gather for a general council meeting in Cape Town.
If the EP deal is to materialise, SA Rugby must change its constitution to allow for up to 74% private ownership of the six Super Rugby franchises and 14 commercial entities of each of the unions.
Last month, SA Rugby president Mark Alexander met Pro Rugby North America chief executive Douglas Schoninger in London, about a deal.
The pair met at the World Rugby conference after Schoninger expressed interest in acquiring the commercial rights of EP Rugby’s U19, U21 and senior Currie Cup teams, as well as the Super Rugby pro team.
At present, investors are limited to 49% ownership, which could put investors off when considering entering professional commercial rugby.
Tony McKeever, architect of the London meeting, cautioned: “People must be aware of the present restrictive situation in South African rugby, as per the Saru constitution and the restrictive Clause 22.3.”
With that clause out of the way, he said, a deal could be structured to grow the game in Nelson Mandela Bay and around the country.
McKeever was chief executive of the Southern Spears Eastern Cape franchise and founder of Mandela Bay Rugby, established specifically to bring about a remedy and a long-term solution to rugby in the region.
Alexander has made it clear that he wants change to boost the South African professional game and make it more attractive to investors and sponsors.
McKeever said Alexander had shown refreshing and innovative leadership and was already assembling support from around the country for the proposal, which would be a gamechanger for Saru, bringing in new investment.
“From what I understand, Mark Alexander is assembling support from the Saru unions that will unlock the residual assets of the six Super Rugby franchises by having an amendment to Saru’s Clause 22.3.
“This limits ownership in the commercial company to 49%.
“To be truly professional, as in France, the UK and New Zealand, Mark and his team are proposing that this ownership [portion] be increased to 74%, so the respective rugby unions still [have] a major 26% shareholding.
“This business model and structure will then attract investors like Pro Rugby and others, who will then have proper ownership and investment structures that replicate those successful businesses.
“Such a move would enable South African rugby, within weeks, to catch up with its counterparts in other parts of the world.
“The fast pace at which the administration and management of commercial rugby is moving in the northern hemisphere, has overtaken South African rugby, so rugby in South Africa – and especially in Mandela Bay – needs to recalibrate itself commercially,” McKeever said.
Another key item on today’s agenda is a restructuring of the Currie Cup, which could see the EP Kings lose their prized Premier Division status.
A strength versus strength league, featuring the teams which occupied the top six places last season, would be a crippling blow for EP.