Ken Borland

SA Rugby CEO Jurie Roux said recently that every union whether provincial or international is going to join up with private equity partners either sooner or later. Rugby has been one of the slowest sports to embrace professionalism though and I can hear many fans wailing that private equity is going to ruin the game.

“Private equity in rugby will have a massive influence, it will probably control rugby. And yes, SA Rugby is in discussions with private firms, but I don’t think there’s a union that’s not talking to someone. We all live in a post-Covid world that is now a much smaller pond and there is the opportunity now for investors to buy things at much cheaper prices. Private equity is here to stay, you’ll either join early or late, but join you will,” Roux said in an online press conference earlier this month.

There is perhaps going to be understandable anxiety that rugby is going to end up in the same sort of mess as the Premier Soccer League has with the controversial sale of the famous BidVest Wits club to a little-known National First Division club, Tshakhuma Tsha Madzivhandila, based in Limpopo. Thanks to BidVest cynically pulling the plug based purely on financial considerations, 99 years of history is down the drain, a club that has won nine top-flight trophies and produced players such as Gary Bailey, Peter Gordon, Richard Gough, Sam Magalefa, Thulani Hlatshwayo and Benson Mhlongo for all intents and purposes no longer exists.

Never mind Western Province leaving Newlands, can you imagine the outrage if it was announced that the Bulls were moving to Polokwane and would henceforth be known as the Buffaloes?

But let me allay your fears by pointing out that rugby has mechanisms in place to prevent such stupid things from happening.

Before going to market, a union will split its assets between a commercial/professional arm, which will largely deal with corporate matters like sponsorships, advertising, marketing and broadcast deals, and an amateur arm which will hold assets like the stadium (whether they own it or have a rental deal) and ‘intellectual property’ like the team name.

Stakeholders can then buy shares in the commercial/professional arm. A private company can buy 25% of those shares and the union gets the cash, while the equity partner takes dividends while also hopefully driving up the commercial value of those properties.

Even though SA Rugby’s constitution now allows for private companies to own up to 74% of a union’s professional arm, as long as the ‘amateur’ administrators have done their paperwork correctly then properties like the team name or where they play should be totally protected even if the union is now a minority shareholder.

The Bulls have been amongst the first unions to really make private equity work for them, with Patrice Motsepe’s African Rainbow Capital Investments and Johann Rupert’s Remgro each owning 37% of the Blue Bulls Company. First prize to them because the influx of cash has allowed the Bulls to hire big-name coaches in John Mitchell and now Jake White, who is totally revamping the team with a host of quality additions to the player roster.

Perhaps the first thing for a union to ensure is that there is synergy between themselves and their private equity partners, so that they can work together to run a successful team.

Unfortunately there have been two unions in the news lately for getting it all wrong – the Eastern Province Rugby Football Union and the Western Province Rugby Football Union. Both those beleaguered unions seem to be suffering from a bunch of rank amateurs trying to run multimillion rand businesses.

After years of wrangling seemed to be coming to an end with the signing of heads of agreement to sell Newlands to Investec, WPRFU president Zelt Marais has unilaterally decided not to sign off on the rest of the deal, despite already taking an advance of more than R50 million from Investec. Interestingly, the WPRFU also owe Remgro R58 million for a loan. These are powerful enemies to have and one fears that the once proud union could be heading the same way as Eastern Province.

The embattled Port Elizabeth franchise just seems to lurch from one crisis to the next and fresh problems are now springing up between the company that holds the majority shareholding in the Southern Kings and the EPRFU.

Roux was not specifically talking about the Southern Kings or Western Province, but his message certainly applies to them when he said political interference tends to surface when administrators try to run their franchises as an amateur entity.

But to borrow from Saturday Citizen deputy editor Brendan Seery’s excellent Column, for every couple of Onions that have to be dished out to unions, there will be more Orchids given out to those who make private equity work.

Simply put, rugby is unable to survive this post-Covid world without them so, like the Wallabies and scrums, every union just has to find a way of making these partnerships work.

SA Rugby chief executive Jurie Roux is not subscribing to the views of players and former players from Australasia that the days are numbered for South Africa’s partnership with Sanzaar, but he did acknowledge on Monday that major changes for both SuperRugby and the Rugby Championship were inevitable in a post-Covid world.

New Zealand’s SuperRugby franchises will resume play this weekend in an internal competition, while Australian teams are set to follow a similar route. There has been talk of the two countries setting up a Trans-Tasman competition and increased speculation that South Africa will cast its lot in with the Northern Hemisphere.

“As far as Sanzaar goes, we are busy with negotiations in good faith. I’m not too phased about whatever former players, current players or media have to say in Australia or New Zealand, I’m only interested in the people that sit around the negotiating table and they have a completely different viewpoint. But I always have a Plan B, you need the foresight to plan for the worst-case scenario.

“We are very dependent on the decisions of government and that changes quite regularly. But hopefully next Monday we will hear that we can return to training and then return to play in August. That would be a home-based, truncated version of SuperRugby, followed by the Currie Cup and then moving into more international exposure with the international window now moved to October/November.

“It depends on border restrictions, but there is a biosphere model for our teams to be based in Australia, Argentina or here, with a competition in the Northern Hemisphere being an alternative. The biggest influence on Sanzaar will be if New Zealand and Australia don’t open their borders until April. But it’s very clear that the pool format is not the preferred option, we had to come up with a round-robin in which all the teams play each other and it had to make commercial sense.

“We’ll make a rugby decision and then look at the commercials and logistical challenges like reduced flights and number of business class seats, plus whether teams will have to isolate, which means being in a bio-bubble, or quarantine, which means a month in a hotel room without training, will determine those. But the current format will be too tight in a post-Covid world, which is why we’re looking at different options,” Roux said in a virtual press conference on Monday.

The CEO said that the pandemic had at least provided world rugby with the impetus to move towards a global calendar.

“Covid has enabled us to do what we couldn’t do for 130 years and that’s get a global calendar aligned because all competitions are on hold, agreements have been breached or are being re-negotiated. Basically rugby in the Northern Hemisphere will move from winter to summer. The Rugby Championship will move to the beginning of the year with the Six Nations, SuperRugby will stay at the beginning of the year and international rugby will be in October/November. We’ll probably have that all done by July 1.

“We can’t make a final decision on the Springboks until government opens the borders, but by the end of July we should have a very good idea of their schedule. There are very detailed plans for the Rugby Championship to be held at a single venue. If that doesn’t work out then hopefully we’ll have local inbound tours, otherwise we can go North. Failing that we have some very exciting plans for local competitions,” Roux said.

Blistering pace and a keen nose for the tryline meant Bryan Habana was like an arrow zeroing in on its target when it came to try-scoring and the Springbok wing holds the records for the World Cup, Tri-Nations/Rugby Championship, the Springboks and for South Africans in SuperRugby. It is heartening to see the 36-year-old show the same acumen now that he has retired and is in the business world.

A graduate of the Toulouse business school, Habana is now the co-founder of Retroviral, a digital sports marketing agency with a strong emphasis on tech. It’s a career move which probably has its roots back in the early 2000s when he signed up for a BSc IT degree at the then Rand Afrikaans University. But then rugby got in the way.

The Covid-19 pandemic has drastically affected everyone’s lifestyles and is likely to force structural adjustments to the economy of just about everything. Sport has been especially hard hit with the global sports industry now projected to face losses of $62 billion.

The Lockdown has also provided much food for thought for entrepreneurs and, typical of the sharp minds of Habana, Mike Sharman and Ben Karpinski, the founders of Retroviral, they have come up with a great new idea that will assist the wellbeing of sportsmen and women as they look to navigate these tumultuous times.

MatchKit.co is a mobile tech platform that allows athletes to build their own website. And not those starchy looking ones that are never updated, have lots of photos that take forever to load and are low on substance.

Within five minutes, sports stars can build themselves a website that highlights their sponsors, automatically integrates into all the big social media channels and provides detailed stats of their engagements on those platforms, has a plug-and-play, secure e-commerce store that will enable them to sell anything from branded merchandise to video or audio shoutouts, and a portal that will enable people to donate to their foundation or favourite charity.

It has often proven a stiff task for sportspeople to promote themselves better, they tend to forget certain sponsors or, in many cases, not even have an Online presence. MatchKit.co certainly appears to be able to overcome these problems.

“I’m extremely excited, MatchKit will add tangible value to athletes and allow them to easily commercialise their brands around the world. I know I was all over the place after our 2007 World Cup win, but MatchKit now allows the athlete to control their commercial rights, it empowers them, while showcasing their sponsors.

“It came about after bouncing ideas off a South African venture capitalist who’s now in the United States and it has a simple set-up. You look at sportspeople Online and not even 10-15% will have their agent’s details there. What if corporates want to engage with them? What happens if they change their agent?” Habana said at the launch this week.

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The great news to come out of the cricketing world in the last week is that the West Indies tour of England looks set to go ahead with the Caribbean squad arriving on Tuesday to quarantine ahead of a three-Test series that will start on July 8. The matches will be played behind closed doors in a bio-secure environment, with the first Test being held in Southampton, followed by two matches at Old Trafford, starting on July 16 and July 24 respectively.

That means the series will end on July 28. South Africa were scheduled to have played their first Test in the West Indies from July 23-27, with the second meant to start on July 31. With a lucrative T20 series against India lined up for the end of August, it now seems likely the Proteas will only meet the West Indians in September and there is still no clarity on whether that series will take place in the Caribbean or in South Africa, or even be moved to a neutral venue like England. The tour of the West Indies was originally meant to be of just over a month’s duration, so it doesn’t look possible to cram in the two Tests and five T20s that were meant to be played even if the Men in Maroon plant themselves in the UK and the Proteas fly over there and quarantine in the second half of July.

Springbok great Bryan Habana spent enough time playing in Europe to know exactly what it would entail for South African rugby to ditch Sanzaar and move into Northern Hemisphere competitions, and the 2007 World Cup winner is not totally sold on the idea, he said on Wednesday.

There has been global speculation that the world champions will leave Sanzaar after the 2023 World Cup to play in an expanded Six Nations tournament as well as their SuperRugby franchises joining European competitions like the Pro14 and Champions Cup. There has also been talk emanating from Australia of Sanzaar excluding teams from both South Africa and Argentina and focusing on just a trans-Tasman competition with New Zealand.

Habana, who scored a South African record 56 SuperRugby tries for the Bulls and Stormers, finished his career spending five years playing for Toulon so he has intimate knowledge of European competition.

“There’s been a lot of debate about South Africa joining the Northern Hemisphere but right now nobody even knows when rugby will be back in South Africa. Probably the one thing most needed by rugby is a global season. But I suppose the one question is whether Sanzaar need SA Rugby, they have been an important part of Sanzaar for the last 25 years.

“For those in the UK and Europe it’s much easier to watch games in South Africa than those in New Zealand or Australia. But it’s important to see where the Springboks and SuperRugby teams could fit in and they would have to fit in with the Northern Hemisphere schedule. I don’t see our guys enjoying playing in 5⁰ in December/January and how are our rugby fans going to enjoy watching rugby over Christmas when they’re on holiday?” Habana said on Wednesday in a virtual press conference to announce the launch of MatchKit.co, a mobile tech platform intended to help athletes grow their commercial brands, set up by the Retroactive agency of which he is a partner.

There have also been suggestions South African teams could play in both Sanzaar and the Northern Hemisphere, expanding the current involvement of the Free State Cheetahs and the Southern Kings in the Pro14, but Habana said the workload on the players even if they were just involved in Europe would be immense.

“When Toulon won the double in 2014/15 they played more than 40 games and player welfare is important. If we’re going to add four more teams and include the Springboks in the Six Nations then that would mean even more matches. There are advantages to both hemispheres, the players would learn more about foreign conditions and that allows you to develop more as a rugby player and as a person.

“To say who has the better standard of play though is very subjective because what determines a good standard? The Northern Hemisphere has come strongly to the fore in the last few years: In the 2015 World Cup the top four sides were all from the Southern Hemisphere, but in 2019 it was very different [England, New Zealand, Wales, South Africa]. Hopefully our decision-makers will choose what is best for the game as a whole,” Habana said.