All member unions of the South African Rugby Union (SARU) were guaranteed a seat at the negotiation table to plot a suitable plan for the mother body's financial future after a deal to sell a 20% stake to an equity firm fell apart.
This website reported earlier this week that SARU was going to halt any further negotiations with a potential equity partner after 75% of its member unions voted against a deal with US investors Ackerley Sports Group in December.
A deal that threatened to cause widespread division amongst members of SARU's General Council because of the payment of a commission fee of 15% to former Formula One race car owner Eddie Jordan's company, Jordan & Associates, for facilitating the deal.
A commission that Jordan & Associates says was actually set to be only around 2,5% to 3% of the deal that was set to be worth $75 million (R1.4 billion) for a piece of SARU's commercial rights.
The majority of member unions were also unhappy about a lack of transparency from SARU during the early parts of their negotiations with ASG.
But after Thursday's General Council meeting in Johannesburg, SARU announced in a statement that they will seek to appoint a financial institution to review the rugby ecosystem, while seeking a suitable equity partner seems to still be part of the plan to secure rugby's financial future.
The first step in the new process of appointing the financial institution will be done through an independent selection process where SARU members will be advised on all aspects of rugby’s financial sustainability and the role that a potential private equity investment might play.
According to SARU president, Mark Alexander, a decision on a suitable financial advisor will be made via a independent selection process. One representative each from the franchise unions and non-franchise unions as well as two independent members of the (SARU) Executive Council would form the selection committee, supported by the SA Rugby CEO and CFO.
Alexander said:
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. We will take a measured and consultative approach under the guidance of the financial advisers as we review the financial challenges and opportunities.
Meanwhile SARU's General Council was also advised that the highest level of financial distribution previously agreed by the members (known as the gold model) was guaranteed for the three years thanks to an acceleration in commercial sales.
According to Alexander strong commercial sale for the 2025 financial year will see SARU report a profit that will ensure that mother body stays in the black for the next three years.
