Springboks: SA Rugby rubbish bonuses claim in detailed Q&A over $75m private equity deal
Springboks players are seen during their national anthem.
SA Rugby have moved to rubbish reports, leaks and speculation around the private equity deal with Ackerley Sports Group (ASG).
The union launched exploratory discussions back in 2018 with several private equity firms and after years of talks and delays, a special general meeting will take place on Thursday (17 October 2024) to decide whether to approve the investment or not.
In the build-up to the meeting, reports have swirled over disgruntled provincial unions while a political party has also weighed in to express their dismay.
Bonuses to SA Rugby executives
In response, SA Rugby have released as detailed statement, and re-issued previous information, to provide further clarity.
Earlier this week, the EFF accused SA Rugby of secrecy and dubbed the private equity sale as a ‘dodgy deal’ before claiming that board members would receive ‘massive bonuses’ for the sale of the commercial rights of the Springboks.
SARU has now rubbished claims that executives would receive any bonuses from the deal and provided clarity on commissions.
“No employee, elected official or consultant of SA Rugby will be paid any form of commission, bonus, incentive, finder’s fee or any other form of remuneration on this – or any other – equity deal,” the statement confirmed in a Q&A section.
“A commission of 15% – including the transactional costs incurred by legal, tax and mergers and acquisitions advisers – is payable to third parties for their professional services and as commission.”
SA Rugby Private Equity Q&As
The remaining Q&As initially published in February this year read as follows:
What is the state of play? SA Rugby has been approached by private equity companies who wish to acquire a shareholding in the sport’s commercial activities.
Why would you do such a deal? A private equity partnership offers not just an immediate financial boost but also crucially provides the expertise, networks, and resources necessary to enhance the commercial value of South African rugby. This collaboration can position SA Rugby, the Springboks and, eventually, other teams for greater global prominence.
Who are you talking to? The preferred bidder is Ackerley Sports Group (ASG), an American company that is an expansion of an investment company established in 2002 by brothers Ted and Christopher Ackerley. Ackerley Partners have owned all or a part of several professional sports franchises in American basketball, ice hockey, soccer, and rugby, and recently partnered with 49ers Enterprises to assume majority control of the Leeds United Football Club.
Why did you choose ASG? They were unanimously chosen by the members of SA Rugby – including the franchise owning unions – at a General Meeting of SA Rugby on 7 December 2023 after ASG, and another bidder, CVC, made presentations to the meeting. ASG’s offer primarily focuses on immediate financial gain and guaranteed income, with lower thresholds for contingency payments, presenting a straightforward proposal for a commercial partnership, which we believe could offer comprehensive advantages to our organization. The ultimate decision will hinge on balancing the immediate financial requirements with the long-term strategic objectives of our rugby organisation.
Springboks’ $75m private equity deal ‘on verge of collapse’ after dissent from top provincial unions
Is it a done deal? No, our team was mandated to pursue further discussion. The members of SA Rugby have agreed on the primary conditions, however, substantial effort is ongoing behind the scenes to finalise the specifics. Since the finer points are critical, no final approval will be granted until our members have been thoroughly briefed and a mandate secured. This process can only be agreed upon once our 14 members have approved it.
Who has sign off? Only one body – the member unions of SA Rugby, the sport’s shareholders. It cannot happen without their approval.
When will they see the details? Once a proposed final structure for the new company and its relationship with the existing SA Rugby structure has been finalised a series of workshops and information sessions will be undertaken to allow member unions to fully interrogate the deal. That structure is still a work in progress.
Are you selling the Springboks? No. The Springboks and all national teams will retain their existing management and ownership models. As national institutions, the Springboks and SA Rugby are not transferable to private equity. This strategy is about harnessing our commercial rights in partnership with an organisation, creating a separate entity dedicated to elevating our commercial profile.
So how will the Springboks be paid? The new commercial entity will remit an annual fee to cover all current operations of SA Rugby – from paying the Boks to providing funding to the unions.
What are the next steps: Once a proposed post-deal structure is nearing finalisation it will be workshopped with member unions. Until such time as that position has been reached it would be counter-productive to speculate on.
Is there a deadline for approval: While not definitive, it is anticipated that a conclusive proposal will be presented to the members at the Annual General Meeting scheduled for 30 May 2024, for their approval or rejection.