The SA Rugby Union (Saru) is set to brief parliament’s portfolio committee on sport, arts & culture on Wednesday to explain the proposed deal that would see the sale of a portion of the union’s commercial rights, including those of back-to-back world champions the Springboks.
The meeting will go ahead despite Saru’s misgivings that it was premature to do so ahead of Friday’s vote by the unions on the deal, whose structure has raised eyebrows.
Committee chair Joe McGluwa said on Friday it was important for Saru to open up to the nation about the proposed deal between it and US private equity firm Ackerley Sports Group (ASG).
“We have witnessed to date there is too much speculation and misrepresentation of the facts. Saru must trust the committee and we (MPs) should not be kept in the dark even if Saru has not yet signed on the dotted line,” McGluwa said.
The meeting between Saru and parliamentarians was initially set for November 22, but the union asked for a postponement, saying it could only have the meeting after the vote by its unions on Friday.
In his letter to the committee dated November 18, Mark Alexander, president of Saru, requested postponement of the November 22 meeting, suggesting it could only take place after the December 6 vote on the equity deal.
“We are awaiting the final proposal regarding the proposed equity transaction, which will allow us to provide informed input to all stakeholders,” he wrote.
The final proposal was expected to be received after December 6, and any discussions before this date would be premature and lack the necessary details for meaningful dialogue, Alexander said.
“We have consistently kept the minister informed of our progress. We appreciate your understanding and flexibility in rescheduling the meeting to a more suitable time.”
I am glad Saru has considered and indicated its availability. This is a move in the right direction and where all stakeholders are involved, including the people of SA. Any deal can be a good deal, but it must be the right deal.
— Joe McGluwa, chair of parliament’s portfolio committee on sports, arts & culture.
McGluwa said despite Saru’s reservations, its leadership had indicated their availability to engage the legislators on the proposed deal.
“I am glad Saru has considered and indicated its availability. This is a move in the right direction and where all stakeholders are involved, including the people of SA. Any deal can be a good deal, but it must be the right deal,” he said.
The structure of the deal, first reported by Business Day, will see ASG acquire a 20% stake in the Saru Commercial Rights Company (CRC) for $75m (R1.3bn) and gain control over Springbok commercial rights.
Seven unions, including the Sharks, Blue Bulls, Lions and Stormers, poured cold water on the plan. If the opposition holds, ASG will not meet the threshold of 75% needed to seal the deal.
According to ASG’s offer, payment of the $75m will be staggered, with the first tranche of $35m set to be paid when the parties put pen to paper, and the rest over four years.
The capital must be repaid to ASG, though it will have perpetual rights to the 20% stake in CRC. ASG will have the upper hand on the CRC board, consisting of seven equal voting members (plus certain nonvoting members), including three appointed by Saru, three by ASG and an independent board chair appointed by ASG.
ASG’s entry valuation of the SA rights is significantly below the $133m (R2.4bn) US private equity firm Silver Lake paid for a 6% stake in the All Blacks’ commercial rights in 2022. New Zealand Rugby kept full control of the brand and commercial entity.
Hefty success fees are to be paid, with former Formula One boss Eddie Jordan’s company to pocket about $7.5m (R136m) for brokering the Saru-ASG deal.
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