The silent majority has spoken.
That’s how a delegate at a meeting of the Western Province Rugby Football Union on Wednesday described proceedings at what was arguably one of the most significant gatherings in its 140-year history.
WP have to decide whether they are going to accept R148m and cede 74% of the professional arm to a consortium that includes the originators of Capitec and Irish firm Ardagh, who now own Consol Glass.
WP’s potential new funders have deep pockets, but some of the delegates SA Rugby tried to convince to take the deal have short memories.
WP’s finances has been mired in controversy. SA Rugby placed it under administration and has been running the organisation over the past few years. They cannot continue in that capacity indefinitely. It isn’t just a drain on their finances but the other provincial entities around the country might wonder “why the preferential treatment?”
WP, of course, is a potential cash cow if managed properly.
The deal is probably the best WP can hope for. It is unlikely the other South African franchises who have a 74% equity partner would have received that much.
The independently run process to source a suitable equity partner has run its course. Due diligence has been performed on the consortium.
Though neither group within the consortium are equity investors in the true sense of the word, SA Rugby appear satisfied they have the purest intentions. The consortium, they believe, are not out to make a quick buck, because they don’t need one.
Securing the future of the franchise is said to be their chief motivation and they are likely to exercise strict financial controls on the franchise.
They are unlikely to watch their investment be eroded by infighting which has characterised the WPRFU over the last few years.
Some of those dissenting voices remain. The delegates who argued that they would have tried to cut a more equally weighted “50 plus one” deal were told no-one would have negotiated with them based on the union’s reputation. It is clear some club delegates want to continue to have a say over the affairs of the professional team.
The deal is probably the best WP can hope for. It is unlikely the other South African franchises who have a 74% equity partner would have received that much.
The deal, as proposed will see the new partners recapitalise the bankrupt entity with R108m of which the WPRFU retains 26%.
The WPRFU will effectively get R40m and they will be debt free.
They would no longer have to fund professional rugby. That amount could potentially be placed in a trust, earn R4m a year and be divided annually. Whatever the clubs get would be significantly more than what they got over the last decade or so.
You could, of course, get a scenario where an aspirant president of the WPRFU makes the promise on his election ticket, to share the R40m more generously. That kind of short sightedness cannot be ruled out.
Should delegates vote against the deal on the table next Wednesday, liquidation, instead of a solid future, may very well be on WP’s horizon.
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