SA Rugby to appoint financial advisers for ‘new mandate’ on commercial prospects after failed equity deal

In a pivotal move for the financial stability of rugby in the country, the South African Rugby Union have resolved to appoint a financial institution to conduct a comprehensive review of the sport’s financial ecosystem.

The decision was made during a General Council meeting held yesterday in Johannesburg, where Saru were prompted by the need to reassess their commercial strategies after a failed private equity investment deal.

SA Rugby's General Council have decided on the next steps to review the the sport's financial ecosystem - more here: https://t.co/FJKoztbvP8 💰

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With a significant setback in December, when the Ackerley Sports Group’s (ASG) private equity investment bid failed to secure the required 75% majority vote from member unions, SA Rugby are now taking decisive steps forward to finding alternatives.

Their Executive Council and management have been given the mandate to initiate a new process that aims to enhance the union’s financial sustainability, with the goal of securing rugby’s sustainable future in the country.

“We have been given a new mandate from the General Council to start a new process to review our commercial and financial prospects, and define the process,” SA Rugby president Mark Alexander said in a statement.

The latest initiative marks an important juncture for South African rugby, as a thorough analysis of its finances is deemed essential in ensuring the sport can thrive in the current economic climate.

The first step in this renewed strategy involves selecting a financial institution through an independent process.

The selection committee will consist of representatives from the franchise unions and non-franchise unions, supplemented by two independent members of the Saru Executive Council, with guidance from the SA Rugby CEO and CFO.

This carefully thought-out selection aims to foster transparency and confidence in the advice provided to Saru’s members.

“We will take a measured and consultative approach under the guidance of the financial advisers as we review the financial challenges and opportunities,” Alexander added.

This statement reflects a commitment to a strategic and inclusive decision-making process, essential for the growth of the sport, unlike the failed ASG bid, where members felt Saru tried to push the deal through without proper consultation.

Moreover, the General Council also received reassuring news regarding the financial distributions from Saru for the year.

The previously agreed highest level, known as the gold model, has been guaranteed for the next three years, thanks to an upsurge in commercial sales.

Despite an anticipated loss for 2024, the management’s efforts, combined with robust commercial sales projections for 2025, have secured the financial outlook for Saru for the near future.