Owners at South Africa's top franchises are moving behind the scenes to present SA Rugby with a counter equity deal to the controversial one now under the spotlight.
SA Rugby's proposed deal with the American consortium the Ackerley Sports Group (ASG), worth $75m (R1.32bn) for a 20% stake in their commercial rights, has come under heavy criticism and franchise owners are in the throes of producing an alternative.
They are opposed to the proposed arrangement with ASG and have posed questions among others about the terms of the deal, how voting rights would be split and how the commission or finder's fee was determined. They have questioned ASG's credibility as an entity that can positively affect South African rugby.
An SA Rugby spokesperson has questioned the motives of the franchise owners and labelled it the first step to them attempting to take over control of the sport in this country.
All, however, are in agreement that the game's governing body is in need of a shot in the arm, but who and how it is administered has proved a bone of contention.
That SA Rugby, which has little to no cash reserves, needs money urgently is not in doubt. One franchise owner presented a scenario where that can be achieved before they are rushed into an equity partnership.
He explained SA Rugby, with the help of the franchises, could access bridging finance that can be leveraged off income-generating instruments already at the game's governing body's disposal.
“When you go to a Springbok Test you see they are so filled you just need one or two of them to backstop the kind of loan that might be required and then it is straight-up financing,” said a franchise owner who wanted to remain anonymous.
“In the context of a loan you just need collateral, not rights. This has to be in conjunction with the franchises. We need certainty so we can plan our budgets, it can't just be discretionary.”
He explained franchise owners accept they must collaborate rather than compete if they are to serve the interest of South African rugby. “It has been really positive. Everyone brings something different to the table. These are proper business people who are committed to rugby. We want to try to help these guys.”
He and another franchise owner have indicated to this writer SA Rugby's proposed deal with ASG must be stopped at all cost.
“I have a problem with the terms of the deal. It is effectively a win, win, win for Ackerley and they get to control the commercial business. When you see this big commission is being paid, then you go, 'no, no, no' there is something more to it.
The Ackerley Group will also be available to address them. That will happen before December 6 before we finally take the deal to the executive committee to get a decision about the road ahead.
— SA Rugby spokesperson
“We've got to find a replacement plan. We have to find a real business person who runs SA Rugby with integrity and in the best interest of the game. That way we move the Springboks forward.”
That will likely drive the wedge deeper between the franchise owners and SA Rugby who are already suspicious of the franchisees' motives.
A spokesperson said franchise owners and provincial presidents have long been aware of the details of the ASG deal and reminded that SA Rugby were in fact mandated to continue with their negotiations based on information that was presented last December.
SA Rugby meanwhile is pressing ahead with its plans. They have to schedule a meeting with minister of sports, arts and culture Gayton McKenzie to again explain the nature of the deal and they intend conducting further information sessions with unions' presidents around the country.
A spokesperson said: “The Ackerley Group will also be available to address them. That will happen before December 6 before we finally take the deal to the executive committee to get a decision about the road ahead.”
They need 75% of their provincial affiliates to vote in favour of the deal for it to proceed.
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