SA Rugby will this year walk a tightrope as they seek to sign and seal an equity partnership agreement with CVC Capital Partners. The much mooted deal has been in the making since 2018, and while neither party has confirmed that they are in talks with each other, the agreement is said to be heading to conclusion.
When exactly that will be remains a mystery but SA Rugby no longer have the luxury of biding their time. They have put 15% of their commercial rights up for sale and are naturally treading cautiously before a deal is consummated. They want to “apply minds” and “consult far and wide” with their constituents and stakeholders before committing to an agreement.
CVC are drawing up a final offer, and when it arrives it will be workshopped among the rugby organising body’s stakeholders, including their provincial affiliates, government, the players and sponsors. This process could take up to September to run its course, if not longer.
An abundance of caution comes highly recommended when selling part of yourself but SA Rugby does not necessarily have time on their side. This year’s Rugby World Cup concludes on October 28 and they will be desperate to have other commercial agreements, if not signed and sealed, then pretty much in the final stages of negotiation. SA Rugby’s sponsorship cycle concludes at the end of the tournament and naturally they will want to usher in a new cycle without delay.
Part of the reason SA Rugby wants to hold hands with CVC is the company’s expanding footprint at the business end of the sport.
To do that they will need to present sponsors with a compelling package and they currently have limited means to do that. They are hoping CVC’s expertise in producing digital platforms that enhance fan engagement will give them the desired bargaining chips when they canvass sponsors. They recognise that names on jerseys, on the field and perimeter boards no longer hold the allure they once had with sponsors.
Sponsors aren’t just harder to come by, but to please. SA Rugby believes CVC can help them bridge that gap but there are other reasons they want to get the deal done. Part of the reason SA Rugby wants to hold hands with CVC is the company’s expanding footprint at the business end of the sport.
CVC, through its stakes in the Six Nations, European Champions Cup, the United Rugby Championship and the English Premiership are privy to the sport’s inner workings. SA Rugby seems desperate to be in the right company. Though SA Rugby are putting 15% up for sale, they are keen to stress that they are not selling the Springboks or themselves and that they are merely attempting to exploit their commercial rights.
In fact, the terminology often used is that they are placing their commercial rights in a vehicle so they can put more money in the system. There is never enough. The country’s player drain continues unabated as the rand continues to take a pounding.
Apart from the cash they will put into the local eco system, SA Rugby are desperate to tap into CVC’s intellectual property. If nothing else, a consummated equity partnership will also give them licence to appoint a full-time CEO.
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