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.

One has to admire the Lions Rugby Union for the way they have been able to dig their way out of the abyss of financial ruin that faced them when they were relegated from SuperRugby in 2013. Just five years later and they are unquestionably South Africa’s premier franchise, the one most young players probably want to play for and producing a very popular brand of rugby.

But amidst all this success and SuperRugby trailblazing, there have also been messages coming out of Ellis Park that paint a picture of a franchise that is still anchored in the past in many ways and does not seem able to be the standardbearer of a future game all rugby fans should be hoping becomes truly the sport of all South Africans.

As much as the Lions deserve huge credit, one has to call them out for some of the mixed messages that they have sent out recently; as we have seen after another week of anguish caused by awful social media messages, perceptions are vital when it comes to inclusivity.

With Swys de Bruin jetting off overseas with the Springboks, the Golden Lions needed a new head coach for their Currie Cup campaign. But instead of heading for the safety of port and elevating one of the assistant coaches in Philip Lemmer or Joey Mongalo, or even promoting Bafana Nhleko, who has coached the SuperSport Rugby Challenge team as well as the Lions U19s and U21s and been an assistant with the Junior Springboks, they chose strength and conditioning coach Ivan van Rooyen.

Now Van Rooyen has undoubtedly played a very important part in the Lions’ success over the last few years, but his helicoptering into the head coaching job was inevitably attacked as being anti-transformation in certain quarters.

At this delicate stage in our country’s history, organisations really need to be sensitive about how their actions will be perceived by the majority. I am not saying it was wrong to appoint Van Rooyen, who played for the Lions at junior provincial level, and has gained some insights from Rob Walter, the former Proteas strength and conditioning guru who then became head coach at the Titans cricket team and enjoyed great success.

But the reasons for Van Rooyen’s appointment were never fully explained and even more shade is thrown at the Ellis Park hierarchy when Van Rooyen himself says he won’t be doing any actual coaching but is in more of a managerial role.

Why was this not explained properly on the day of his appointment, thus avoiding plenty of bad publicity?

The prospect of getting involved in rugby in Gauteng for a young Black player or coach is daunting enough without considerable barriers being put in their way, like the recent acquittal of Roodepoort U21 players on charges of racism during their April match against Wanderers.

While acknowledging that Sanele Ngcobo of Wanderers was “an honest and truthful witness” who testified that racial slurs had been made, the Golden Lions Rugby Union disciplinary tribunal ruled that because he could not prove who had specifically spoken the words, a not guilty verdict was appropriate.

For the physical abuse that degenerated into a mass brawl at the end of the game, one Roodepoort player was effectively handed a one-match ban! Talk about a slap on the wrist … and another slap in the face for Black rugby players.

To add insult to injury, when Wanderers were on their way to Roodepoort to play a later fixture, their bus broke down and they missed the game. The GLRU docked them five points, meaning Roodepoort now qualify for the Gold Cup instead of them!

Having reinvented themselves so spectacularly on the field, the Lions rugby union now really need to focus on the message they are sending out to their future market.

https://www.pressreader.com/south-africa/the-citizen-gauteng/20180825/282518659358786