A Johannesburg media organisation has stated, citing a copy of a business plan it has seen, that if a potential deal proceeds this week, Ackerley Sports organisation (ASG) will acquire the commercial rights to the Springboks rugby franchise.
According to Business Day, which cited the documents, Ackerley would receive a 20% share in a newly established commercial rights firm and board power in exchange for US$75 million paid over four years.
On October 17, the member unions of SA Rugby (SARU), which manages the current world champion Springboks squad, will vote on the proposal.
According to the publication, Ackerley, which was founded last year by brothers Christopher and Ted Ackerley of Ackerley Partners LLC, would have three of the seven voting board seats in the new business in addition to having the authority to choose a chairperson. After eight years, it would be allowed to sell its interest.
In a statement earlier this month, the SARU stated, “This entity will oversee sponsorship, broadcasting, events, branding, and licensing related to the sport.” “But SARU will continue to have jurisdiction over rugby matters like team management, coaching, contracting, and competition management.”
However, a “disgruntled” franchise told Business Day that the potential agreement with ASG has “several red flags.”
They are reporting that, despite having a minority share, ASG will receive a majority on the board under the provisions of the deal, which would see the establishment of SA Rugby’s Commercial Rights Company (CRC). News for The Daily Rugby
According to the paper, the SARU CRC board will include seven equal voting members (plus some non-voting members), three of whom will be chosen by SARU, three by ASG, and an independent chair chosen by ASG.
Additionally, it asserts that the US private equity group would have “perpetual licence” to SA Rugby’s commercial rights, including the Springboks, and “effective control” of the CRC.
Once a symbol of apartheid, the Springboks have won the World Cup four times in a row, earning international acclaim as a model of successful racial change in South Africa.
On October 17, a vote will be held to determine if the $75 million (about R1.3 billion) agreement for a 20% share in the governing body’s commercial rights firm will be approved.
“This entity will oversee sponsorship, broadcasting, events, branding, and licensing related to the sport,” SA Rugby said in a statement issued on October 4. Nonetheless, SARU will continue to have authority over rugby-related matters including team management, coaching, contracts, and competition administration.
They are reporting that, despite having a minority share, ASG will receive a majority on the board under the provisions of the deal, which would see the establishment of SA Rugby’s Commercial Rights Company (CRC).
The paper states that the Saru CRC board will include seven equal voting members (plus some non-voting members), three of whom will be chosen by Saru, three by ASG, and an independent chair chosen by ASG.
Another worrying aspect is that it appears to be more of a loan than an investment, with ASG’s capital outlay being paid back over time. Additionally, until it is paid back, they will continue to have authority over the commercial rights business. Ackerley will get US$75 million spread over four years in exchange for a 20% share in a recently established commercial rights business.
The contract further stated that “ASG retains full control of CRC decision-making subject to a list of reserved matters until ASG capital has been repaid (including preference). Read more about SA Rugby mulls plan to sell Springboks brand to US fund for US$75 million
