SA Rugby will hand over control of the Springboks’ commercial rights to private equity company Ackerley Sports Group (ASG), according to a report.
Business Day are claiming to have seen a document which outlines the finer details of the proposal, which are “heavily skewed” in favour of ASG.
A vote has been scheduled for October 17 which will decide whether the $75m (around R1.3bn) deal for a 20 per cent stake in the governing body’s commercial rights company will be agreed.
In a statement released from SA Rugby on October 4, it read: “This entity will oversee sponsorship, broadcasting, events, branding, and licensing related to the sport. However, rugby affairs such as team management, coaching, contracting and competition management will remain under SARU’s jurisdiction.”
However, according to a “disgruntled” franchise who spoke to Business Day, there are “several red flags” in the proposed deal with ASG.
Majority board despite minority stake
Under the terms of the agreement, which will see the creation of SA Rugby’s Commercial Rights Company (CRC), they are reporting that ASG will get a majority on the board despite only having a minority stake.
“The Saru CRC board will consist of seven equal voting members (plus certain non-voting members), including three appointed by Saru, three appointed by ASG, plus an independent chair to the board appointed by ASG,” the document reads.
It is also claiming that the US private equity firm will get “effective control” of the CRC and “perpetual license” to SA Rugby’s commercial rights, which includes the Springboks.
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Meanwhile, in a further concerning development, there is a suggestion that it is more of a loan than an investment, with ASG having to be repaid its capital outlay over time.
They will also retain their control over the commercial rights company until it has been repaid.
“Until ASG capital has been repaid (including preference) they retain full control of CRC decision-making subject to a list of reserved matters,” the document added.
“ASG will retain annual approval rights on Saru’s net operating budget and have observer status on the Saru board, influencing spending of invested capital.”
Investment in rugby union
Private equity companies have invested heavily in rugby union with CVC having a stake in the Premiership, URC and Six Nations.
They were in negotiations with SA Rugby to add them to their portfolio but the governing body snubbed them in favour of ASG.
In 2022, New Zealand Rugby sold a six per cent stake worth $133m to US firm Silver Lake, but they retained control over the brand and commercial side of things.
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