WP Rugby dissolves business arm
THE Western Province Rugby Football Union confirmed yesterday that it had applied for‚ and obtained‚ an order for the provisional liquidation of Western Province Rugby (Pty) Ltd‚ in which it is a 75% shareholder.
President Thelo Wakefield and chief executive Paul Zacks said the union had retained expert legal and accounting advice and had fully explored all options before applying for liquidation of its commercial trading entity. The union gave assurances: ý It would not be affected by the liquidation;
ý The union remained the custodian of both amateur and professional rugby in the province;
ý The union would ensure that the various Western Province teams continued to function as normal and that the contracts of players remained secure;
ý All sponsorship agreements would be honoured; and
ý All WP Rugby (Pty) Ltd’s liabilities as at the end of last month had been settled.
Explaining the decision‚ Wakefield said: “WP Rugby (Pty) Ltd has been forced to deal with a worsening financial position.
“A number of factors had contributed to this – a difficult economic climate resulting in a smaller sponsorship pool; increasing player wages; a changed Super Rugby format; a modified Currie Cup; an improved home-viewing experience; and declining gate and season ticket sales.
“All [these] factors have contributed to financial challenges‚ not just for WP but for other rugby franchises around the world.
“The tipping point for our finances was the persistent and complex legal disputes relating to certain commercial‚ media and Wi-Fi rights with one partner in particular‚ Aerios‚ over the last year.
“This has hampered our ability to conclude key sponsorship and suite agreements, which destabilised our relationships with key stakeholders and supporters‚ impacted materially on our cash flow and ultimately led to the business of rugby being commercially unviable.
“We believe this decision will allow us the opportunity to move forward‚ rebuild‚ create new and better governance structures‚ and to produce sustainable financial growth through the exploitation of all of our commercial rights.”