CAPE TOWN (Reuters) - South African Rugby need to find a private equity partner to help it rebuild cash reserves devastated by the COVID-19 pandemic that has left the game in the country vulnerable to collapse, chief executive Rian Oberholzer warned on Friday.
SA Rugby have been in talks with United States-based Ackerley Sports Group (ASG) over what local media have reported will be a $75-million cash injection, though any agreement must still be rubber-stamped by the country’s 14 unions.
Oberholzer says the partnership will be about more than an immediate boost in finances and help unlock the future commercial potential of the four-time world champion Springboks.
There have been reservations from within South Africa though, not least the four major unions who provide teams for the United Rugby Championship.
"We would like to put on record that we will, acting collectively, take whatever measures necessary to ensure that no transaction is approved that does not, in our view, make strategic and financial sense for us and the SA Rugby ecosystem as a whole," the Bulls, Lions, Sharks and Stormers said in a combined letter to SA Rugby this week and seen by the local newspaper, the Daily Maverick.
But Oberholzer insists the deal is necessary to safeguard the future of the game in the country.
"There has been much speculation, misdirection and misunderstanding of what the purpose and practicalities of such an agreement involve," he said in a statement. "The Springboks are not being sold – not now and not ever."
He added the proposal is for "a company investing in a minority shareholding in the commercial rights to SA Rugby’s activities", which would have no say in the running of the game.
The Springboks have won back-to-back World Cup titles but spent a year without playing in 2020 due to COVID-19, a huge financial set-back for SA Rugby from which they are still recovering.
"We have zero reserves, and a similarly cataclysmic financial disaster (to the pandemic) would wipe out the sport as we know it in this country," Oberholzer said.
"Our peers at international level outperform us in the global commercial markets and we have long needed a step change in our business to generate the income.
"We can’t produce that alone from the foot of Africa, so we have actively sought a partnership with an organisation possessing the platforms, networks, and relationships to enhance our commercial value."
(Reporting by Nick Said; Editing by Christian Radnedge)
