Negotiations ongoing in potential SA Rugby equity deal with ASG

SA Rugby has broken its silence on its pursuit of a private equity partner, emphasising that it has not concluded a deal with Seattle-based company Ackerley Sports Group (ASG). 

The equity deal aims to enhance the commercial value of South African rugby, with it bringing financial and networking benefits for the short term and long term, according to a FAQ (frequently asked question) statement released by SA Rugby.

ASG, which released a statement last week stating it was in discussions with SA Rugby over partnership, have emerged as the favoured party after it had seemed for a long time that the rugby mother body would align with Luxembourg-based CVC Capital Partners.

Why ASG?

Online publication News24 reported that the top four unions, the Bulls, Sharks, Lions and Stormers, were determined to push back any deal with ASG if there was a lack of transparency and if it put the future of rugby in the country at risk.

SA Rugby elaborated on why it was keen on bringing ASG on board as its commercial wing partner.

“The preferred bidder is Ackerley Sports Group (ASG),” read the statement.

“They were unanimously chosen by the members of SA Rugby – including the franchise-owning unions – at a general meeting of SA Rugby on 7 December 2023 after ASG, and another bidder, CVC, made presentations to the meeting. 

“ASG’s offer primarily focuses on immediate financial gain and guaranteed income, with lower thresholds for contingency payments, presenting a straightforward proposal for a commercial partnership, which we believe could offer comprehensive advantages to our organisation. 

“The ultimate decision will hinge on balancing the immediate financial requirements with the long-term strategic objectives of our rugby organisation.”

How do teams benefit?

The statement further went on to say that the partnership with ASG was not a done deal as there are still discussions happening. SA Rugby detailed how the equity deal would benefit teams and insisted it was not selling the Springboks, its flagship team. 

“The Springboks and all national teams will retain their existing management and ownership models. As national institutions, the Springboks and SA Rugby are not transferable to private equity. 

“This strategy is about harnessing our commercial rights in partnership with an organisation, creating a separate entity dedicated to elevating our commercial profile.

“The new commercial entity will remit an annual fee to cover all current operations of SA Rugby – from paying the Boks to providing funding to the unions.”

Bulls director of rugby Jake White said he hoped the deal could be concluded soon as the financial injection would help in increasing the squad budget to recruit players from overseas.

“If we get this massive equity deal, that would mean that someone will make a decision that there’s no need to moan about money anymore. We can now bring our best players back to play in South Africa,” White said on Wednesday.