Rugby 21.12.2016 02:42 pm

What you need to know about Western Province being for sale

Thelo Wakefield, president of Western Province, has always tried to seem optimistic about his union. But in reality, they're in big trouble. Photo: Grant Pitcher/Gallo Images.

Thelo Wakefield, president of Western Province, has always tried to seem optimistic about his union. But in reality, they're in big trouble. Photo: Grant Pitcher/Gallo Images.

The Capetonians were officially liquidated on Tuesday and can’t announce the Stormers squad for 2017. What on earth is happening?

The Western Province Rugby Union’s commercial wing, Western Province Rugby (Pty) Ltd., was officially liquidated on Tuesday.

It’s dumped the Stormers and Western Province teams into uncertain times.

Here’s what you need to know:

How did WP Rugby become bankrupt?

It certainly didn’t happen overnight.

Local rugby unions in general are in dire financial positions because of a negative economic climate.

The Stormers in particular haven’t played all that well the past few seasons, meaning fans don’t make the effort to go watch them at Newlands anymore.

Numerous suites have also been left unsold.

South Africa’s sports sponsorship market is also shrinking, meaning most teams are actually lucky if they can convince a few sponsors to be associated with them.

However, the tipping point was Aerios suing WP Rugby for R72 million for breach of contract.

What is Aerios’ role in this saga?

Aerios is a Cape Town-based company that was recruited by WP Rugby to sell commercial, advertising and WiFi rights within Newlands.

But they allege WP gradually started selling advertising space and signed new sponsorship agreements without Aerios’ knowledge or consent.

Aerios invested a lot of money in Newlands and didn’t receive the necessary return on investment.

Why is Aerios the only creditor that opposed the liquidation?

They have taken a cynical if valid view on the matter.

Despite the Western Cape High Court ruling liquidation is the only way to save the union, Aerios believe WP Rugby is using bankruptcy as an excuse to get out of their contract.

Aerios have indicated they’ll appeal.

What happens to the union now?

The liquidators have to sell everything WP Rugby owns.

The union can auction off numerous properties, such as the rugby complex in Oranjezicht, it’s stake in Villager Rugby Club and several houses close to Newlands.

More depressngly, they might have to sell their state-of-the-art high performance centre in Belville too.

WP Rugby isn’t allowed to negotiate or enforce any new contracts.

Will WP lose Newlands?

No, the union rents the stadium.

But there might be pressure now to move to more fan-friendly Cape Town Stadium in Green Point.

Are the players and staff being paid?

Yes, Johann Rupert’s Remgro owns a 25% stake in WP Rugby and has paid salaries the past few months.

The liquidators also confirmed they can borrow money for salaries.

Who’s going to buy Western Province Rugby?

It will probably be Remgro.

The South African Rugby Union (Saru) recently changed its constitution to allow for 74% private stakes in unions.

It is already rumoured Remgro will become the majority shareholder of a new company that will run WP Rugby.

Given how Remgro has already loaned money to the union, WP might not have a choice.

Are the Stormers allowed to play Super Rugby in 2017?

The liquidators say the Stormers can only announced their squad if they have a new owner.

Saru though is under contractual obligation from Sanzaar to have six teams in Super Rugby, so all parties will have a plan in place.

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