Advantage Sharks as MVM drop kicks Western Province
WP’s reluctance to hand over control to MVM has seen the US consortium throw its money at the KZN side
SA’s rugby unions are not in the habit of exchanging Christmas presents, but Sharks CEO Eduard Coetzee has made no secret of his view that Western Province has presented his organisation with a significant one.
It was because the elected officials running WP rugby at the time were so reluctant to surrender control and, by all accounts, so incompetent in the negotiation process that US consortium MVM Holdings withdrew its R112m offer to take over the professional arm.
Rugby administrators are known to get jumpy when accused of incompetence, but in this case that view seems to be shared by people within Province’s decision-making apparatus. When board chair Ebrahim Rasool announced shortly before Christmas that there was to be a stricter and clearer divide between the company and the union, it was a clear repudiation of the way Zelt Marais has conducted himself since being elected president.
The deals that were made and then reneged on — which could set back WP nearly R500m if Flyte Properties presses for its side of what Marais initially proclaimed “the deal of the century” to be honoured - have been well documented. So was WP’s reluctance to give the Americans what was fair, given what they were paying — a 51% controlling share in the company.
Given the agendas that drive WP rugby governance, it wasn’t surprising that those in control were reluctant to surrender that control, but the Sharks had no such qualms.
Given the agendas that drive WP rugby governance it wasn’t surprising that those in control were reluctant to surrender that control, but the Sharks had no such qualms. With the help of a local consortium that includes some financial players, MVM now holds 51% control, with SuperSport and the KZN Rugby Union holding 49%.
Effectively the KZN Rugby Union did what its WP counterparts refused to. And it did it for considerably less in terms of financial outlay from the Americans than would have been the case had WP accepted the deal.
The perception that MVM is paying the Sharks something close to what it would have paid Province is wrong. MVM’s Marco Masotti told me when I met him at a braai in November that while he was born in Durban and has been a lifelong Sharks fan, WP had been the organisation’s first target because Cape Town presents greater international appeal. That is why a deal with the Sharks wouldn’t have the same monetary value as one with WP, he said. It is believed that what the Sharks will be getting from MVM is about two-thirds of what the WP deal would have been worth.
All of which makes WP’s failure to complete the deal — because, in the words of Rasool, “we didn’t want to sell the family jewels for six pieces of silver” — more laughable and questionable.
Considering the three equity deals offered to the top SA franchises over the past 18 months, the one offered to WP was by far the highest. The Bulls are going ahead in the local game because they signed an equity deal more than a year ago with billionaires Johan Rupert and Patrice Motsepe, understood to have been about R70m. And that was for a more than 74% stake.
Putting the MVM investment in the Sharks at about R75m makes the R112m offered to WP the biggest offer. MVM has also signed up to absorb the Sharks’ losses, which have been significant before and during the Covid period. It was going to do the same with WP. That’s another estimated R75m.
The US deal could ensure the Sharks again become the leaders in forging ahead in the professional game in SA, a reputation they earned in the 1990s, but surrendered during a period of mismanagement and questionable appointments in about 2013.
For a start, don’t be surprised if the flow of Christmas presents from WP to the Sharks extends into the next contracting window. Masotti told me during our November chat about his meetings with WP players. He said he was taken with how determined most big-name players were to stay in SA rather than go overseas to earn money.
As such, a move to Durban would be far less traumatic than going overseas for a top player. It is also no secret what the Sharks need to become a top team locally and globally — depth in the tight five.
That is something WP has and after the frustration of seeing the US deal, which they were all in favour of, falling through, my money is on some of those players being willing exports.