Saru orders another review after equity deal saga

The fallout from their failed bid to secure an equity partner has brought more soul searching for SA Rugby.

That episode was marked by much division but the organisation is now on a mission to get its members on the same page in understanding its financial position and what they need to do to improve it.

The South African Rugby Union (Saru) will appoint a financial institution to review rugby’s financial ecosystem, the union’s membership decided at a general council meeting in Johannesburg on Thursday.

Members mandated the executive council and management to initiate a new process after the failure to reach the required 75% majority support for a private equity investment proposal by the Ackerley Sports Group in December.

SA Rugby said the first step in the new process would be to appoint the financial institution through an independent selection process to advise members on all aspects of rugby’s financial sustainability and the role a potential private equity investment might play.

“We have been given a new mandate from the general council to start a new process to review our commercial and financial prospects and define the process,” said Mark Alexander, president of Saru.

To ensure full confidence in the process, the financial advisers would be chosen through an independent selection process.

One representative each from the franchise unions and non-franchise unions as well as two independent members of the executive council would form the selection committee, supported by the SA Rugby CEO and CFO.

“We will take a measured and consultative approach under the guidance of the financial advisers as we review the financial challenges and opportunities,” said Alexander.

The council was also advised that the highest level of financial distribution previously agreed by the members (known as the gold model) was guaranteed for three years thanks to an acceleration in commercial sales.

Alexander said though a loss would be reported for 2024, the work undertaken by management and strong commercial sales for 2025 had secured the organisation’s financial prospects for the next three years.