BUYING INTO THE ALL-NEW SPRINGBUCKS
Greenbacks and gold could be the next team colours — but will fans cheer?
ý If you don’t ordinarily think of New Zealand’s capital, Wellington (population: 212,000), as the epicentre of the sporting universe, think again.
As well as hosting parliament, the city is home to New Zealand Rugby (NZR). At this very moment NZR is in talks with Silver Lake, a US investment firm, for a 12.5% stake in the All Blacks, one of the most recognisable teams in the world.
The deal, worth nearly NZ$400m, has already been given the green light by the 26 provincial unions and the Maori Rugby Board, but has apparently snagged at the door of the players union.
The union and the All Black captain, Sam Cane, are wary of the crass commercialisation of the game that private capital could bring, reports The Guardian. With Silver Lake’s influence at board level, they say, they would be playing more exhibition matches and generally be more in demand for fan and public engagement.
Traditions — such as the haka — would be besmirched. They would find themselves dancing to the tune of a company that already has a stake in Manchester City and the New York Knicks basketball team. Do a bunch of US investment bankers really understand the emotional charge that comes from pulling on the revered black jersey? Contrast this with the view inside NZR, where
Brent Impey, NZR’s head, says simply: “The game has to change.”
The way he sees it, fewer young fans are taking up the game, and last year the union posted a significant loss due to the pandemic and associated factors.
What Impey doesn’t mention is that the New Zealand broadcast rights landscape is limited and SA Rugby, which generated the majority of broadcast revenue for the Sanzaar southern hemisphere rugby alliance, is no longer a partner. The All Blacks might be beyond repute as a brand, but that doesn’t mean Kiwi tills are running over with the clink of green.
This might seem to be a parochial issue unfolding in a Wellington boardroom. But the outcome has ramifications not only for New
Zealand rugby and rugby generally, but for a number of sports across the world.
The core question is whether a sporting federation (or club) is a public entity or a private
one that can be sold, traded or split up as any buyer sees fit.
Gold in those silver ferns
NZR appears to be treating its custodianship of the national game as a private matter — but others would argue that a national sporting federation is a form of community. They’d say it’s a manifestation of all their fans’ needs.
It’s a debate that SA sport is tentatively becoming alert to.
As a nonprofit company, Cricket SA (CSA), for example, is explicitly an organisation that runs the sport for the public good. This was certainly the view held by Zak Yacoob, the former chair of CSA’s interim board.
This is why cricket’s rolling crisis provoked such widespread public outrage. Cricket is for everyone — not just the few. Following from this, officials need to be accountable to their major constituency — the local public — for what they do and how they do it.
But is this an old-fashioned, even complacent, view?
In January, the Sharks clinched a high-profile private equity deal whereby New Yorkbased MVM Holdings bought 51%. The other 49% remains with the KwaZulu-Natal Rugby Union and SuperSport International.
Eduard Coetzee, CEO of the Sharks, tells the FM that Covid has been an impetus for change. “Decisions that might have been five, even 10 years off, have been brought closer,” he says. “At the Sharks we’ve seen our commercial revenue increase even during the pandemic, but that doesn’t mean we aren’t grateful for new investment.”
Far from being a soft investment with easy returns, Coetzee says “the sporting environment is uniquely challenging because it’s so atypical”.
For one thing there are many variables, such as injuries to key players and losses of form.
Coetzee points out that the outcome of a season can hinge on the bounce of a ball or a referee blowing (or failing to blow) for a penalty. Though he doesn’t mention it, fans can be notoriously fickle — and as we’ve seen during the past year, there’s nothing worse than an empty stadium.
But the key to keeping fans happy when a club or franchise is the subject of a takeover is ensuring a supply of high-profile players. In the case of the Sharks, Siya Kolisi, the World Cupwinning Springbok captain, joined the franchise in March — and on Saturday, Sharks fans were thrilled to see him play a role in the narrow 3330 victory over his old team, the Stormers.
Kolisi is a client of the Roc Nation Sports management group, founded by US rapper JayZ, which referred to him as “a son of the soil and an icon of substance”.
This is another new complication: the emergence of management groups such as Roc Nation Sports, whose other clients include Belgian footballers Kevin de Bruyne and Romelu Lukaku.
Coetzee is well aware of the emotional dimensions of being a fan. As a former professional player himself, he understands that private investment should never happen in a way that alienates fans from the club they care about.
It’s such a simple rule — but one that was forgotten recently, with the swift rise and even speedier fall of the European Super League in football. It crashed and burnt partly because the fans saw it as a betrayal
of their love and support.
But finding that balance is critical. While sport is not sport without the passion of the fans, sport also isn’t sport without money to grease the wheels of an increasingly sophisticated system.
In SA, local sport is a closed environment financially, with a limited range of sponsors and precious few broadcasters to play off against each other when rights renewals come up for discussion.
SuperSport, which dominates the local broadcasting world, apparently campaigned behind the scenes recently for fewer (and not more) independent directors on the new CSA board, well-placed sources say. Independent directors would be more difficult for SuperSport to influence, cynics might say.
The company had not responded to questions about this from the FM at the time of going to press.
In fairness, it was SuperSport that diluted its shares in the Sharks to make way for MVM’s 51% holding, a stake that makes increasing sense as local rugby starts to face north rather than east.
The Pro14 Rainbow
Cup started on the weekend and will continue with local derbies for the Sharks, Bulls, Stormers and Lions over the next two weeks. After that, the four franchises will campaign in the Guinness Pro14 in Britain before the final on June 19.
For SA rugby, aligning itself with European rugby makes financial and emotional sense. Unlike playing in
Australasia and Argentina, travel across time zones is minimal, and financial muscle in the world game is increasingly concentrated in the UK and Europe. MVM’s stake in the Sharks, with poster boy Kolisi in their midst, may in future look like local rugby’s eureka moment.
Scoring with a local investor
Rugby isn’t the only sport where the times are achangin’.
The ascent of Patrice Motsepe, the owner of Mamelodi Sundowns, to the presidency of the Confederation of African Football is seen by many to signal Motsepe’s intent to start an African Super League. Such a competition would need external investment, which Motsepe, and others, could provide.
The FM understands that through his proxies, Motsepe is also sniffing around some domestic cricket franchises. This suggests he is getting increasingly tired of the stagnation that seems implicit in SA’s cricket business.
SA sport has coped better than might have been expected with the challenges of lockdowns and staging matches in empty stadiums. The British and Irish Lions tour in July will take place in SA after all, and the men’s 4X100m relay team’s win in the World Relay Championship in Poland over the weekend augurs well for their Olympic campaign.
But the fact remains, SA sport desperately needs an infusion of capital and the know-how that goes with it.
Speculation among those in the know is that the kind of discussions happening in Wellington right now are also taking place at SA Rugby’s headquarters in Cape Town.
Insiders says these talks are not far down the road, and might come to nothing, but in such a straitened economic environment, now would be the time to exploit the
Springboks’ status as world champions.
How SA Rugby handles the ownership debate will determine whether there’s public pushback, as there was in the European Super League fiasco, or whether matters proceed with the crispness of a Faf de Klerk pass.