SA Rugby has strongly dismissed rumors, leaks, and speculation regarding their potential private equity deal with Ackerley Sports Group (ASG). Discussions with private equity firms began in 2018, and after years of talks and delays, a special general meeting is scheduled for October 17, 2024, to determine whether the investment will be approved.
Leading up to the meeting, reports have emerged about dissatisfaction among provincial unions, and a political party has voiced its concerns. Earlier in the week, the Economic Freedom Fighters (EFF) accused SA Rugby of secrecy and described the deal as a “dodgy” transaction, claiming that board members would receive significant bonuses from the sale of the Springboks’ commercial rights.
In response, SA Rugby issued a detailed statement, readdressing earlier information to provide clarification. The union rejected claims that executives would benefit from bonuses tied to the deal and explained the commission structure. According to their statement, no SA Rugby employee, elected official, or consultant will receive any commission, bonus, incentive, or other forms of remuneration from the equity deal. Instead, a 15% commission, which includes transactional costs related to legal, tax, and mergers and acquisitions advisory services, will be paid to third-party professionals for their services.
In a Q&A section, initially published in February 2024, SA Rugby addressed key points of the deal. They explained that private equity companies approached them with an interest in acquiring a share in their commercial activities. The reasoning behind considering such a deal includes not only an immediate financial boost but also the expertise, networks, and resources that private equity can offer to enhance the commercial value of South African rugby. This collaboration could elevate SA Rugby, the Springboks, and other teams to greater global prominence.
The preferred bidder, Ackerley Sports Group (ASG), is an American company with a background in various professional sports, including basketball, ice hockey, soccer, and rugby. They recently partnered with 49ers Enterprises to take majority control of Leeds United Football Club. ASG was chosen unanimously by SA Rugby members after a General Meeting in December 2023, following presentations from both ASG and another bidder, CVC. ASG’s offer primarily focuses on immediate financial gain and guaranteed income, with fewer contingency payment conditions, making it an attractive option for SA Rugby’s commercial partnership.
However, SA Rugby clarified that the deal is not finalized. While there has been agreement on the primary terms, the finer details are still being worked on, and no final approval will be granted until SA Rugby’s members are fully informed and have given their mandate. Approval can only occur with the consent of the union’s 14 members, who act as the sport’s shareholders. The members will receive the full details of the deal once the structure of the new entity and its relationship with the existing SA Rugby organization has been finalized. SA Rugby emphasized that the Springboks and other national teams will retain their current management and ownership models, as they remain national institutions. The commercial deal is designed to leverage their commercial rights, not sell the Springboks.
Regarding the financial aspect, the new commercial entity would provide an annual fee to cover SA Rugby’s operations, including player salaries and funding for the unions. The next steps include finalizing the proposed structure and presenting it to member unions for approval, which is expected to happen before the Annual General Meeting in May 2024. Although there is no strict deadline, SA Rugby aims to present a conclusive proposal by that time for approval or rejection.
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