South Africa Rugby At A Crossroads: Rival Bid Challenges Controversial $75M Equity Deal
By Priscilla Jepchumba
The South African Rugby Union (SARU) is currently under substantial pressure as influential figures in rugby are proposing an alternative to the much-discussed financial arrangement with Ackerley Sports Group (ASG) from the USA.
This ASG deal, valued at $75 million (approximately R1.3 billion), has faced considerable criticism for being financially complex, lacking secure funding, and containing high commission fees, all of which have led to notable resistance from various stakeholders.
Prominent benefactor Johann Rupert, along with Marco Masotti and Johan le Roux—who hold ownership stakes in the Bulls, Sharks, and Stormers, respectively—are championing a competing proposal spearheaded by local investors.
Ex-Springbok Schalk Burger Sr., who is involved with the Boland Rugby Company and advocates for smaller teams, emphasized the significance of the coming week for South African rugby. “For us, it’s about SA Rugby and the small teams. How do they get help in the future? It’s going to be a big week ahead. A key week for SA Rugby,” Burger stated to Rapport, underscoring the urgency of the situation.
Furthermore, this new proposal urges SARU to engage a top-tier financial firm to assess its financial needs and establish a temporary funding strategy to address pressing issues. Initially slated for a decision in October, SARU postponed the vote on the ASG deal at the behest of Sports Minister Gayton McKenzie, who requested more information. To approve the deal, SARU now requires a 75% consensus—10 out of 13 provincial unions must be in favor.
Simultaneously, the Portfolio Committee on Sports, Arts, and Culture is intensifying its scrutiny of SARU’s operations. Chairperson Joe McGluwa remarked that SARU is expected to brief the committee on December 4 regarding ongoing concerns. “We have seen too much guessing and wrong facts,” McGluwa observed. “SARU should trust us as a committee; we cannot let surprises hit our nation.”
The ASG proposal permits American investors to acquire 20% of SARU’s commercial rights company. Advocates argue that the $75 million injection could significantly bolster the financial landscape of rugby, while skeptics approach ASG's monetary assurances with caution.
With the unions divided and a locally sourced offer now on the table, SARU faces a pivotal decision in the near future. “Any deal can seem good but must be truly right,” McGluwa pointed out, reflecting the gravity of the choice at hand.
This week is indeed critical. SARU will determine whether to proceed with ASG’s proposal or embrace a homegrown solution that may profoundly impact the future of South African rugby.