Why don’t we go the whole hog and privatise SA Rugby?
But first SA Rugby must change its constitution and allow provinces, on an individual basis, to determine whether to wholly sell off their professional arms
England’s Premiership rugby bosses last week turned down a £275m (R5.4bn) offer for a majority stake in their venture.
Some of them dismissively argued that their business will be worth £1bn within a decade. The majority, however, turned it down on the basis that they don’t want to relinquish control to a third party – despite the clubs suffering collective losses of £35m (R687m) over the past year.
That club bosses would be willing to absorb those losses and step away from a £17m windfall perhaps cuts to the core of why they own a rugby club in the first place. It is often suggested that rugby club owners don’t make money and that their investment is just one big vanity project.
Their decision may also be partly influenced by the interest shown by other entities who want to acquire a minority stake in the Premiership. They find that far more palatable.
Of course the English clubs are not alone in wanting to control their own destiny. South African teams too have to balance the need to recapitalise the sport with relinquishing power. Unlike the clubs in England they are yet to make a full leap to private investment.
Currently SA Rugby limits private equity in the professional arm of their provinces to 74.9%. They need to go the whole hog if the game is going to be run along professional lines argues Lions chairperson Altmann Allers, who also doubles are the franchise’s principal outside investor.
“In time we would be interested in increasing our stake to 100%,” Allers said. “That would only make sense. A lot of re-organising will, however, have to happen in rugby. Already investing in rugby doesn’t bring big returns, so you’d think they (SA Rugby) would make it as attractive as possible. Having a 74.9% stake doesn’t really make sense because with a 100% stake you can have a greater impact.”
He is hopeful that SA Rugby will change its constitution and allow provinces, on an individual basis, to determine whether to wholly sell off their professional arms.
“The provinces can decide that,” said SA Rugby president Mark Alexander. “It is for them to decide. First, though, they need to change SA Rugby’s constitution but we can’t tell them what to do.”
It means, for the moment at least, a team like the Lions could be held to ransom by minnows who barely have the right to exist in the Currie Cup’s First Division.