SA Rugby Initiates Financial Review to Restore Stability After Equity Investment Setback

In a decisive response to the unsuccessful attempt at securing a private equity partner, the South African Rugby Union (SARU) is charting a new course to fortify its financial base. The dramatic episode, which failed to garner the requisite 75% majority support for a deal with Ackerley Sports Group last December, has led to a conscientious rethink of the Union’s financial strategy. A general council meeting in Johannesburg resulted in an agreement to undertake a comprehensive financial ecosystem review.

This fresh initiative was confirmed by Mark Alexander, the president of SARU, during late discussions last week. The approach aims to re-align the Union's commercial objectives and adhere to a sustainable financial framework that promises to guide future equity investment decisions and broader financial strategies.

The review will be conducted by a financial institution meticulously selected through an open and independent process. This approach underscores a commitment to transparency and diligence, learning from the previous shortcomings. The selection committee for this crucial task will comprise representatives from both franchise and non-franchise unions, supported by two independent members of SARU's executive council, alongside the SA Rugby CEO and CFO.

Mark Alexander emphasized the significance of a measured and consultative approach under the guidance of expert financial advisers, which is expected to unearth both financial hurdles and opportunities. This strategic shift is aimed at making SA Rugby more resilient and better prepared to handle future financial uncertainties.

Furthermore, the council was reassured about financial distributions under the highest level previously agreed upon by the members, known as the gold model. These are guaranteed for the next three years, buoyed by a spike in commercial sales, despite an anticipated fiscal loss in 2024. Alexander highlighted that, owing to vigorous management efforts and robust commercial strategies slated for 2025, the financial outlook for SA Rugby appears secure for the medium term.

This proactive endeavor by SA Rugby to refine its financial governance and strategy not only aims at stabilizing its immediate economic standing but also at laying down a robust foundation for future growth and sustainability.