The Springboks Aren't For Sale
The full story of why the private equity deal to acquire the 'Boks fell through
IN THE SAME WAY that nobody bothers to read the terms and conditions when taking out a contract at the local suburban gym, so no-one bothers to read annual reports. So there the annual report sits, in some musty corner of the company website, slowly leaking confidence like the girl who isn’t asked to dance.
It’s a great pity that nobody reads annual reports. If you can get past the double-speak and the half-truths masquerading as full disclosure, they’re extremely useful in listening to an organisation’s heartbeat. Take the 2023 SA Rugby annual report, written after last year’s World Cup victory so understandably basking in its reflected glory.
General trends first. It is clear that SA Rugby are in a financial hole, something they admit in the report, and something which remains very real for them whether they are being courted by the Ackerley Sports Group (ASG) or people like them, or not.
They were in so much of a hole, in fact, that they sought out an advance on their 2023 Rugby World Cup monies from the World Rugby (WR) to tide them over. This is an admission they make in the report, one cleverly balanced by the fact that they also let slip in the report that others in the international rugby firmament sought out advances on the 2023 World Cup monies too.
They are not, therefore, alone in their hole, a fact which is important to bear in mind as we continue our trawl through the financial nooks and crannies of the international game. As they say, and I quote: “At the outset of 2023” – over 18 months ago, in other words – “our organisation was confronted with a budget shortfall of R254-million.”
The reasons for this are multiple. The union is still dealing with the aftershock of the Covid-19 pandemic. Player salaries mount up and overseas travel is expensive.
If I understand the report correctly the union also suffered financial penalties as a result of their withdrawal from the SANZAAR alliance. In short, they spend more than they earn, despite being world champions in two consecutive World Cups.
At a purely financial level the fact that the Springboks are double world champions is both helpful and unhelpful to our understanding of the union’s financial predicament.
It is unhelpful in that being World Cup winners twice over would appear to be a guarantor of financial health. The slice of broadcast rights revenue, however, remains the same from a World Cup whether you are a beaten quarter-finalist or a competition winner. Only the prize money changes the further you progress in the tournament, and that’s usually shared by the players.
But it is also self-evidently true that world champions are more marketable than, say, losing finalists. It is surely too much to hope for that the Springboks become triple world champions, which means that their marketability is surely at its peak now.
Enter Wasserman, a Los Angeles-based sport and media agency run by Casey Wasserman, the man who spearheaded Los Angeles’ successful 2028 Olympic bid. The 2023 annual report also tells us that SA Rugby have entered into an arrangement with Wasserman’s London office in an attempt to maximise their sponsorship revenues, particularly in the international marketplace.
According to SA Rugby’s 2023 annual report, South Africa, of all top-tier rugby nations, rank only fifth – the phrase used in the report is “lag markedly” – in terms of maximising their international sponsorship revenues, so an arrangement with an outfit like Wasserman is theoretically long overdue.
“Unlike other nations – notably New Zealand – our sponsor portfolio is under-weighted on global companies and to address that absence and unlock greater value, the UK-based arm of the international commercial agency, Wasserman, was contracted early in 2024 to reset South African rugby’s commercial programme.”
As used here, “reset” is corporate gobbledegook for make more profitable. “Reset” is an interesting word. It contains shades of neutrality, banality even, possibly even notes of the everyday. It suggests qualitative rather than quantitative change. That neutrality obscures the fact that had the organisation been doing its work properly, a reset might not have been necessary.
SA Rugby’s 2023 annual report also helpfully points out that with help from Wasserman, it is hoped that their annual sponsorship revenue of approximately R450-million be doubled by 2027, if not before.
Two points are worth making here. The first is why, when South Africa became world champions by winning the World Cup in Japan five years ago, did SA Rugby not have a more outward-looking sponsorship policy? Second, why did they not have a more internationally-focussed strategy far sooner than appears to have been the case?
Were they apologetic about what they thought they could achieve and happier to splash about in a small local market they knew and understood? Were they simply surprised by the – ahem – bounce of the oval-shaped ball?
Was their commercial manager perhaps spending too much time on the golf course, getting down his handicap to a point where he didn’t need to be embarrassed by it at the annual neighbourhood bring and braai?
What SA Rugby’s relationship with Wasserman seems to suggest is that a big deal with an international operation – an airline, a sportswear manufacturer, an apparel range, an energy drink – isn’t that far off. And that’s surely good news for the financial hole we spoke about earlier.
Should increased international sponsorship revenue come to pass, some of the financial concerns of the organisation will be addressed at a time when the Springboks marketability is as bright as the gold trim on the Bok jersey
.This is all well and good. Except the time will come, as it must, when the Springboks aren’t world champions. The time will come when the Springbok story doesn’t transcend the sport to reach out into the sporting universe at large, and they become just another team amongst teams, competing in the global marketplace with the Real Madrids and Bayern Munichs of this world.
It is difficult, admittedly, for us to envisage such a moment now, but the Irish cannot be kept away from the Webb Ellis Cup indefinitely, and France, if its age-group teams are anything to go by, is the coming nation. They have excellent programmes, strong, athletic players and they have a France-sized itch. Do not put money against them as we approach the second half of the decade.
South Africa’s lustre will fade, as it must. Coaches will come and go. Players will retire. Even the United Rugby Championship, with its craggy Munstermen and Glasgow Warriors, its matches in the cold and belting rain of Galway, will lose some its cachet.
Not only will the Springboks’ reputation fade – if only to a degree. The broader question remains and a multi-million rand deal brokered by men in designer suits will not answer that question, it will only alleviate some of the short-term financial pain and temporarily put the question aside.
The question is this: “If we accept that international rugby is unsustainable in its current format. What model might work so that it becomes sustainable?
How, in other words, might clubs and national federations live within their means and not go bust like Premiership clubs Worcester, Wasps and London Irish, with a couple of others threatening to fall by the wayside as we write?
Football has faced these very problems, so they are not new. The Union of European Football Associations, more commonly known as UEFA, has dealt with this issue by instituting fair play and sustainability rules.
Such rules, when boiled down to their essentials, recognise that clubs cannot come and go without doing reputational damage to the sport, irritating the sponsors and making life for the broadcasters more awkward than is comfortable.
Clubs, say the rules, shouldn’t spend more than they earn, making crazy forays into the transfer market in ways that are fundamentally unsustainable. In some European leagues, such as the Bundesliga, the salary cap is a feature of everyday life, which, to be fair, it is for the South African franchises in URC, although you’d need to be an exceptionally trusting individual to not suspect that some skulduggery is at play.
For starters, I’d steer my forensic stethoscope in the general direction of Durban and the Sharks, although this might just be the irresponsible hunch of a couch potato who lives in the Cape and might not know what he’s talking about.
That powerful clubs such as Manchester City, with their phalanx of lawyers, should have subverted and challenged UEFA’s sustainability and fair play rules doesn’t invalidate the rules per se. One might say the very opposite. One might say that City’s entanglement in the rules suggests the rules themselves are pitched just about right.
Lurking behind them, the rules have a vision of the sporting world. It is a vision based on values, even old-fashioned values, values which implicitly encourage one to build a club, not buy one. Here are values, further, which encourage you to spend less than you earn. That’s a vision – forgive me my middle-class moment – of good house-keeping right there.
I’m aware that this is hopelessly fuddy-duddy but the UEFA rules are an attempt to safeguard the integrity of the game. In only one rugby-playing country that I know of, England, are there working groups between the Rugby Football Union (RFU) and government about sustainability and the future of the professional game.
No such initiative exists – as far as I can tell – in World Rugby, and it should, because so many clubs and national federations are facing exactly the same thing – a struggle to live within their means,
In rugby, it’s impossible not to have noticed that the slow equity dance between SA Rugby and ASG has been foreshadowed in both England (with CVC Capital) and New Zealand (with Silver Lake), not to mention three of our four URC franchises. What can one say about SA Rugby in this regard? We clearly have a group here who are slow to get onto the corporate dancefloor and strut their stuff.
Equity deals have been conspicuously unsuccessful in both England and New Zealand rugby. And it’s not difficult to find this out. Which might be why the ASG deal, which, remember, was a commercial rights deal, so not that different to what was being offered at the same time to Wasserman, is off the table for now.
I wonder how ASG felt about Wasserman, and vice versa? Would they have been taking the same commercial properties to market or different ones? Would the two have been complementary or in opposition? Who would have taken the streaming rights, for example, and how would these have been monetised?
It would be interesting to know the answers to these questions, although they might never be asked now that the shadowy ASG deal seems to have fallen by the wayside.
The innuendo that has emerged to replace it involves scurrilous talk of bungs beneath the table and votes-of-no-confidence in Rian Oberholzer, SA Rugby’s chief executive, and Mark Alexander, the union’s president.
The one thing I haven’t read much about when it has come to a discussion in the South African media about the ASG matter is sustainability. This is a pity because sustainability is surely at the core of what this is all about.
Neither have I read much about sustainability in the 2023 SA Rugby annual report. I would have thought that the Boffins of Platteklip could at least have paid lip service to a debate about sustainability but it appears not.
Here’s why. As my good friend Angus Powers points out, it finally all boils down to story. It is story, he says, that makes the Springboks, well, such a compelling story.
For what have the reformed Springboks under Rassie Erasmus and Jacques Nienaber done in winning consecutive World Cups, if they haven’t enlarged our conception of story and, moreover, written a compelling new chapter or two in the big book of South Africa?
In short, they have told the story of post-apartheid, democratic South Africa in a way – and this is important – that is easy to understand. They have told a story of togetherness and mutual support that the politicians have not been able to tell successfully or consistently.
Far be it for me to support the politicians, except to point out that the story of modern, contemporary South Africa, a story of 60-million moving parts, is not an easy story to tell. It needs an extremely competent story-teller to even get close.
But if you limit your cast to 15 players and the bomb squad, and throw in a few heretical and frequently brilliant individuals sitting with walkie-talkies up in the stands, you have an easy story to wrap your head around.
And when they win things – which is the happy-ending story – you have an even better story to tell because everyone loves a happy ending and a happy ending allows the story to keep on going for another season. And who knows, season three might be even better than seasons one and two?
In telling their Springbok story – and doing so successfully – they have told our story. Whether you love Cheslin or Eben, Faf or Ox, the current Springboks have a little bit for everyone.
They are a true team of everymen and so they speak to us all. Their story is our story and our story is their story and the grand story means that it’s a great story for all when great stories are conspicuously lacking on the ground in the twilight world we otherwise refer to as contemporary South Africa.
The sad fact of it, though, is that you never hear this language when talk comes to money and equity and capital investment partners, whether these folk are called ASG or Wasserman or CVC Capital Partners.
So here’s the thing. On the one hand, you have a corporate language of “resets” and “deficits” coming out of last year’s SA Rugby annual report, which you have to assume is also the same hot air and corporate jargon that masquerades as everyday language at SA Rugby.
On the other hand, you have the sometimes cheesy but otherwise romantic and humanistic emphasis on story, which is how rugby’s fans in this country tend to make sense of their love of the game and the teams they support.
These two languages run in parallel. They don’t seem to overlap except in the case of the national teams and, even then, the overlap is partial and incomplete.
Let me be clearer. When SA Rugby find themselves in a black financial hole, they look to market. This is what they do, given the commercial imperatives, culture and thrust of their organisation.
But the market isn’t the only place you can look to for money and capital. You can also look back through the great rugby story to the fans, the very people that contribute a little part of themselves to the story. So it is the fans that might reasonably help with rugby’s sustainability because they, after all, keep it alive by following the game and watching it and sometimes even playing it.
How exactly might the fans contribute to the story and the sustainability story?
Well, we live in the age of digital marketing. Of crowd-funding. Of innovative responses to age-old financial problems like capital liquidity.
SA Rugby could become a partially fan-owned entity. In return for a fans R5000 or R10 000 a fan could get preferential seating, season tickets, free jerseys, time with the ‘Boks, gala dinners. Any number of creative things are possible. SA Rugby just needs to show the willingness to think outside of the box in a way that the Springbok coaching staff have done so successfully over the last five years.
A fan representative could have a seat on the board, which would be a darn side better than have the current group of bottom-feeders and serial incompetents that currently appear to be the case as far as the SA Rugby board are concerned.
Whatever the creative forms that raising money within South Africa could take, whether from subscriptions or shares or fractals of fan ownership, we have to recognise that there’s a fundamental clash of definitions going on in the sustainability debate.
SA Rugby behaves in nearly all ways as a private organisation, except on the rare occasions when it pays lip service to the fans. The fans and the journalists and Gayton McKenzie, the minister of sport, arts and culture, all feel, however, that this somehow can’t be right. They feel intuitively that the Springboks are something more than a private club that speaks to us only when it wants to.
I have great sympathy with this view because I share it. The Springboks feel like ours. They feel like ours because they have inspired us, and this inspiration is crucial to telling a good story.
This story is currently being sullied by shadowy characters we know so little about that it’s scary. It is not unreasonable to ask first for their bona fides and second whether they care for what they are marketing or raising sponsorship for in the way they are meant to, or whether this is just another corporate gig from which they will take a hefty commission.
This – here’s a guess – is a commission which we will probably not be told about unless we ask. Or if we bother to roll up our sleeves and go through the annual report very carefully.
So there we have it. SA Rugby stands poised at a crossroads. It looks as though they will walk the corporate road and pound the turnpike marked “safe option” – indeed, they’ve already done this to some extent in dealing with Wasserman anyway.
What we are saying is they could take the path marked “splendid view”. In the interests of full disclosure, “splendid view” doesn’t tell the full story.
It is also a perilous path, even an untrodden one. But now might be the time for some radical thinking. The past ways haven’t served rugby well. If they had, international equity deals would be showing greater evidence of success.
I said earlier that there are other people with SA Rugby in the hole that forced her to seek an advance on 2023 Rugby World Cup monies. That means there’s a bigger problem out there.
Perhaps it’s time we solved that problem in our own way. In a way that suits our temperament. And in a way which is sustainable for the future, so that South African rugby can prosper for not only us but for our children and our grandchildren, rather than becoming a reserve for corporate raiders and money-men that have no real interests in the product other than scrounging a grubby buck.
South African sport has historically been slow to accommodate the fans, which is not always the case, say, in European football, in which fans have seats on boards. Perhaps it is time for the rugby fans of this country, those who love the rugby story, to change that narrative and start flexing their collective muscle?