Back to the drawing board for Saru as members vote against selling Springbok stake

The Springboks’ most-capped player Eben Etzebeth breaks clear to score their second try during the Autumn Nations Series 2024 match between Wales and South Africa at the Principality Stadium on November 23, 2024 in Cardiff, Wales. (Photo by David Rogers/Getty Images)

By Craig Ray

6 Dec 2024

The South African Rugby Union’s general council turned down an offer by US investors, by voting against the sale of a 20% stake to American consortium Ackerley Sports Group on Friday 6 December 2024.

That’s it then. It’s back to the drawing board for South African Rugby Union (Saru) chief executive Rian Oberholzer and his commercial team to find an equity partner.

A proposed $75-million (R1.3-billion) offer for a 20% stake in a new commercial rights company from Ackerley Sports Group (ASG), was rejected by more than half of the 13 eligible unions at the vote.

Seven unions voted against the sale, led by the Bulls, Lions and Sharks. Western Province, under whom the Stormers fall, would also have voted against it, but they did not have a ballot as they are in administration.

Read more: Saru vote for equity sale faces major barriers from dissident unions still unhappy with structure

It’s now unclear whether the US-based ASG will improve their offer and/or provide more clarity on thorny issues such as the identities of their investors, and whether this is a loan or an equity buyout.

They are still in an exclusive negotiation period with Saru until the end of the month, and can present a revised offer during that time.

It feels like four years wasted, as that’s when the courting process to find an equity partner began.

Read more: Saru’s proposed equity deal — factions, egos, innuendo and deals in the shadows

“The input and perspectives shared by our members have been invaluable, and we respect those perspectives,” Saru president Mark Alexander said in a statement following the vote.

“Our goal remains to secure a sustainable and prosperous future for South African Rugby, ensuring that we continue to grow and succeed on both the national and international stages.

“We remain committed to working transparently and inclusively as we navigate this process. We thank our members for their engagement and feedback, and look forward to presenting revised proposals that reflect our collective vision and goals in due course.”

Saru CEO Rian Oberholzer. (Photo: Grant Pitcher/Gallo Images)

Background to the offer

A year ago, Saru presented ASG and CVC Capital Partners to its general council at a meeting in December 2023. CVC are already players in the rugby market with stakes in Six Nations, Premiership Rugby and the United Rugby Championship.

At that vote, the council “unanimously” voted in favour of continuing the courting process with ASG and jilting CVC, the reasons for which have never been made completely clear.

Saru, mandated by the general council vote of December 2023, presented ASG as the preferred bidder in February this year. That was supposed to be that.

And now it appears that some owners of the big four are preparing an alternative equity offer.

Almost immediately though, the big four unions of the Bulls, Lions, Sharks and Stormers, informally, and then formally, raised objections to ASG.

More accurately, the equity owners of those four clubs objected. The only problem is that Saru’s general council is made up of the presidents of its 15 unions — elected officials — and not the money men behind those clubs.

Regardless of the procedural red tape, the owners of the big four sent a letter to Saru on 12 February claiming that they were “railroaded” into the deal.

The Springboks’ most-capped player Eben Etzebeth during the match between Wales and South Africa on 23 November 2024 in Cardiff, Wales. (Photo: David Rogers/Getty Images)

Oberholzer was irritated by the tone and the insinuations of that letter and subsequent correspondence, which seemed to imply that he and his team didn’t know what they were doing.

Constitutionally, Oberholzer was also not compelled to negotiate with the owners of clubs — only with their elected leadership.

That didn’t help relations. And maybe in retrospect, earlier and more interaction, even if informal, between Saru, ASG and the club’s equity partners, may have helped.

It seems that there has been distrust throughout the process. There was a constant drip feed to the media by members of the big four, suggesting that Saru was withholding information. It undermined the process.

Hinting at ‘impropriety’

There were even hints at some sort of impropriety involving former Saru CEO Jurie Roux.

The suggestions were that Roux was going to receive a hefty “commission” from the massive $7.5-million (R134-million) fee to be paid to Jordan and Associates, who had brokered the deal.

Setting aside the massive fee (which was a major sticking point) for the moment, implying that Roux was to benefit without any evidence, and despite Saru repeatedly denying it, was the starkest illustration of how ugly this matter became.

While the big four and their owners had legitimate objections and questions about the deal, some at Saru feel the big four ran a smear campaign.

Alternatives?

And now it appears that some owners of the big four are preparing an alternative equity offer.

While it sounds like a reasonable idea, with the backing of the likes of Johann Rupert, Patrice Motsepe from the Bulls, Marco Mazotti from the Sharks, and Johan le Roux of the Stormers, it really is a clear conflict of interest.

How can owners of the biggest clubs in South African rugby take ownership of the Springboks, and by extension, other unions in the ecosystem, and then operate in the best interests of all those unions?

Sources have suggested that Saru has a plan B. Details of that plan though, are unclear at this stage. DM

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South Africa

Background to the offer

Hinting at ‘impropriety’

Alternatives?