Columns 24.12.2016 05:31 am

Rugby administration in a ‘strange’ mess

It’s becoming clearer that Western Province is using bankruptcy to escape their poor financial management.

There’s a classic scene in the cult American comedy series The Office that neatly illustrates Western Province Rugby’s (WPR) bankruptcy and its (extremely) quick bailout.

Michael Scott, the inept branch manager is broke and drifts aimlessly around the desks as he realises the reality of his situation.

The dodgy guy in quality assurance tells him he doesn’t need to worry. “There’s a way to make this go away. Just declare bankruptcy and all your problems disappear.”

Typically clueless, Michael walks back to his employees and screams: “I declare bankruptcy.”

Someone then has to point out to him you can’t make your debt disappear by just saying you’re broke.

Obviously Western Province were far more official and procedural in declaring their insolvency but it’s becoming clearer that the Capetonians are using bankruptcy to escape their poor financial management.

On Friday, Aerios, a Cape Town-based company that was appointed by WPR to sell commercial, advertising and sponsorship rights on their behalf, launched an urgent appeal in the high court against the official liquidation order.

Aerios is suing the union for R72 million because the suits didn’t honour the contract between the two parties.

Province said it was this litigation that triggered their decision to liquidate their commercial arm but not the main reason for their poor financial situation.

Interestingly, Aerios was the only creditor opposed to the liquidation order.

While the high court agreed with WPR that liquidation was the only viable way for the union to survive, Aerios believe the union is pulling a Michael Scott: they’ve declared bankruptcy just to skip out of their obligations.

Initially one was willing to give Province the benefit of the doubt. But then – in typical amateurish SA rugby fashion – the Western Province Rugby Union announced on Thursday it was buying out its own commercial arm: WPR. That’s a true what-the-hell? moment.

Most administrators who contributed to WPR’s demise are now probably going to spearhead Province’s business rescue.

Suddenly, I and many others find it hard not to be believe Aerios’ suspicions. Remember, this is the same union that saw four independent board members resign because of a lack of transparency.

Where is the WPRU – effectively an amateur wing of union – getting the funds to buy out its own commercial arm?

Thank you, Johann Rupert and Remgro. There was a fair amount of excitement two weeks ago when the South African Rugby Union (Saru) announced it changed its constitution to allow 74% private equity in unions.

Theoretically, it means unions can receive a much-needed capital injection. But don’t think rugby is suddenly going to attract “new” money.

Local unions are far too indebted already to their existing equity partners. Various sources allege equity partners have helped stiffen up unions’ finances to such an extent that unions dare not go and seek other equity partners.

Rugby administration in this country truly remains a strange mess.

Heinz Schenk

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