Group of power brokers to test SA Rugby’s resolve with new equity deal proposal – report

A group consisting of South Africa’s rugby power brokers have reportedly compiled a counter offer to rival the proposed equity deal between SA Rugby and US-based private equity company Ackerley Sports Group (ASG).

According to a report in Sunday newspaper Rapport, billionaire Johann Rupert, Marco Masotti and Johan le Roux, who respectively hold controlling interests in the Bulls, Sharks and Stormers are believed to have given their support to the latest offer.

The alternative proposal will reportedly be presented to to the South African Rugby Union (SARU) on Monday. The governing body’s main council, which consists of the 14 full member unions’ presidents and chief executives, will have to vote on the ASG deal on Friday.

They were initially going vote on the deal on October 17 but that meeting was postponed upon request from the South African government’s Minister of Sport, Arts and Culture, Gayton McKenzie, who wanted to be fully briefed on the ASG proposal.

10 out of the 13 votes are required from the provincial unions for the deal to be approved.

The financial bailout of $75m (around R1.3bn) from ASG will see them receiving a 20 per cent stake in SARU’s commercial rights company.

However, the deal has been heavily criticised with critics unhappy about the deal’s financial structure, enormous commissions, and the lack of guaranteed funds.

The opposing group want the ASG offer to be withdrawn. They are reportedly also concerned about the absence of evidence of the existence of funds, which is usually the norm when such large transactions are done.

New offer

The latest offer, which is mainly underwritten by South Africans, sets $75 million (also R1.3 billion) as the minimum investment while no commission or fee is payable.

The new faction also want the unions to instruct SARU to appoint a leading financial institution or bank to assess the governing body’s monetary needs, and a bridging financing facility to meet the immediate deficiencies.

Schalk Burger senior, who represented the Springboks as a lock during the 1980s is a director of the Boland Rugby Company and is heavily involved with the opposing group.

He is also a close friend of Rupert and gave his views on the counter proposal.

“For us it’s about SA Rugby and the smaller unions. How are they looked after going forward? It’s a big week coming up. A watershed week for SA Rugby,” Burger told Rapport.