‘Money alone won’t bring Springboks back to South Africa’

SA Rugby is on the verge of completing a private equity partnership with American company Ackerley Sports Group (ASG) that will apparently result in a reported R1.42 billion ($75 million) investment.

ALSO READ | Springboks in line for cash injection as American investors eye SA Rugby

However, some aspects of the negotiations have been met with questions and resistance from local franchises, and a big question has revolved around how it will impact the local game, and whether it would all be positive.

Bulls boss Jake White, for one, has questioned whether it would really help to bring overseas-based Springboks and other top players back to South Africa.

“I’m not sure that, even if we have all the money in the world, it’s going to mean the top players come back in droves,” the Bulls director of rugby said ahead of Saturday’s URC derby with the Lions at Ellis Park. 

“It has to be a policy. It’s been broadcasted quite widely by Rassie Erasmus that having overseas-based players coached by overseas coaches, and having those rich foreign clubs pay their salaries, is a model that works for us. “Money [locally] isn’t going to change that.”

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SA RUGBY RELEASED AN OPEN LETTER ON FRIDAY ABOUT THE INVESTMENT OPPORTUNITY THAT WOULD IMPACT THE SPRINGBOKS

By Rian Oberholzer, CEO, SA Rugby

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.

But there has been much speculation, misdirection and misunderstanding of what the purpose and practicalities of such an agreement involve. Let me put the record straight.

If you take only one thing from this letter, let it be this: The Springboks are not being sold – not now and not ever.

If the private equity deal is approved, it will 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). SA Rugby will 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.

What it means in short is that SA Rugby’s commercial activities of selling broadcast and sponsorship rights and running events will continue as before, only in partnership with a company with international experience who believe that our revenues are capable of meaningful increase. This is a good thing.

That is the “what” is happening, but just as important in answering the question, “why are we doing it”?

It’s simple: the Springboks are back-to-back world champions, but off 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.

Similarly, our peers at international level outperform us in the global commercial markets 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.

HELP NEEDED

We can’t produce that step change alone and from the foot of Africa, so we have actively sought a partnership with an organisation possessing the platforms, networks, and relationships to enhance our commercial value.

We believe we have found potential partners with those attributes who will join us in the CRC, which will be dedicated only to organically elevating our commercial presence.

I hope I have made it clear that this process is not about a quick cash injection; it is about securing the long-term financial sustainability of the sport of rugby in South Africa so that our international teams can compete on a level playing field.

It will provide us with reserves to weather future storms and the capital to invest in strategies to put us on a par with international best practice on and off the field.

We are not selling the Springboks; we are not ceding away any rights; we are building a new company with a minority shareholder to give the Boks (and the rest of rugby) the commercial resources to ensure that the idea of a Three-peat is not just a pipe dream.

Together with the right commercial partners we will be Stronger.

CONFIRMED: Rassie Erasmus NO LONGER director of rugby