The R1.3-billion private equity deal between SA Rugby and the Seattle-based Ackerley Sports Group (ASG) looks set to crumble in the face of reported opposition from South Africa’s top rugby unions.
According to a report by News24, the deal, which would have seen Saru sell a 20% stake in its commercial arm to ASG, is unlikely to proceed when the SARU council meets to vote on Thursday.
Seven of Saru’s 14 member unions had signed a letter opposing the deal, according to sources at News24. The unions are pushing for a postponement of the vote and are calling for an alternative proposal to be presented in three months.
For the ASG deal to go through, 75% of the unions would need to back the plan. However, with the opposition mounting, the deal appears to be on the verge of collapse.
Despite Saru conducting a national roadshow to rally support for the proposal, concerns about the deal’s transparency and long-term impact have surfaced.
The unions’ letter, addressed to SA Rugby president Mark Alexander and CEO Rian Oberholzer, raises several key issues. Chief among them is the lack of clarity about ASG’s consortium members and the sources of their funding. The unions argue that there’s insufficient transparency and question whether ASG has the financial capacity to execute the transaction fully.
The letter also states: “Many of the senior executives of the undersigned members and their shareholders have significant experience in public and private capital markets and the fee proposed is not appropriate by any measure.”
There’s also concern about the long-term implications for South African rugby’s financial independence, with the unions warning that the deal risks permanent changes to SA Rugby’s commercial structure, including the Springbok brand.
Investor involvement in rugby growth and development also remains murky, according to the unions, who question why Saru is turning to a private equity partner rather than relying on its own commercial expertise.
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