SA Rugby's march to private ownership has been reduced to a crawl as disaffected franchises dug their heels in over the proposed equity partnership with the Ackerley Sports Group (ASG).
The four major (United Rugby Championship) franchises in particular voiced concerns as deadlines to sanction the deal approached, which has helped create a High Noon scenario with the game's governing body. SA Rugby's proposed deal was supposed to be put to the vote last Thursday, but the meeting was postponed with sports, arts and culture minister Gayton McKenzie entering the debate at the 11th hour.
All the parties concerned are to have an audience with the minister, but in the meantime the dial has moved very little since the Bulls, Sharks, Lions and Western Province among others voiced their objections to the deal in writing.
While SA Rugby has attempted to answer questions about the deal to their affiliates, mostly presidents and CEOs, the message seems to be distorted or garbled by the time franchise owners digest them.
The franchises have attempted to poke holes in many aspects of the deal and while on the face of it some of their concerns seem legitimate, others can be addressed by them simply perusing the content of the proposed contract.
Equally, many questions have been raised about the credibility of ASG as an entity that can turn around the fortunes of a rugby federation that routinely struggles to break even.
ASG had representatives in the country in December last year and on that score had they and the franchises been placed in the same room perhaps much of the imbroglio that is facing the game could have been avoided.
SA Rugby firmly believes that the ASG holds the ticket to them transforming from a barely break-even business to a commercial entity that can stand the test of time.
They say they face little to no risk and that ASG are obliged to grow their business as they will only get a return on their proposed 20% investment once their jointly constituted Commercial Rights Company (CRC) shows a profit.
SA Rugby walked away from the CVC deal as that was a straight equity offering. They want their business to grow and felt CVC who invested in the Six Nations, United Rugby Championship and Premiership did not have the capacity or inclination to fundamentally improve the entities in which they have invested.
However, there are franchises that still hanker after what CVC had to offer. That would perhaps have placed them in a similar position in which the Bulls now find themselves through their part owner African Rainbow Capital (ARC).
ARC is said to invest in the ASG offering and though that might have brought a distinct South African flavour to the American side of the deal, much of the consternation around the equity deal flared up once Patrice Motsepe's group threw its hat into the ring.
It is exactly the kind of venture that would have piqued ARC's interest. Indeed one of their stated investment targets are upstarts with the potential of going places. ARC makes it clear that they “invest in market disrupters and initiatives that benefit the public. The fund primarily acquires significant minority equity interests in established and start-up businesses.”
The fact that they would be putting money into a domain in which they already have an interest will likely throw up the awkward question about it potentially representing a conflict of interest. Would the Bulls' vote be swayed by what is in the interest of their union, SA Rugby or that of their shareholders?
SA Rugby has made it abundantly clear on numerous occasions that if the deal does not proceed, all in the domestic rugby ecosystem will ultimately suffer. The status quo will be preserved as rugby's controlling body sails perilously close to the financial doldrums.
The point has also been made that the organisation isn't bankrupt and that they can continue with business as usual, for now.
In the meantime SA Rugby will continue to engage their unions and franchises while the ASG will also do so. That needs to happen before December 6 when a line in the sand needs to be drawn on the matter.
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