A RUGBY365 INVESTIGATION: It appears major financial changes are on the cards, as more South African teams look to move to Europe.

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Our disquisition revealed that there could be equity changes (or adjustments) in three of the four Super Rugby franchises.

The changes, all significant, will see South African teams moving closer to the European model of ownership.

Of the four franchises, Western Province Rugby Football Union (and Stormers) are the deepest into the mire of financial problems.

They are on the brink of bankruptcy again and may run out of money (to pay staff salaries) in a matter of months, if not weeks.

The WPRFU had a financially powerful partner in Remgro, but management messed up badly and are now desperately looking for a new equity partner.

There was a phantom equity partner that never materialised and it is an open ‘secret’ that Remgro will not get involved – like so many others – while the current management members are involved.

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It was reported that Syrian-born French businessman Mohed Altrad, President and owner of the Montpellier Hérault Rugby club, has shown interest in being a possible equity partner.

However, it appears all possible benefactors are waiting for the departure of Thelo Wakefield and Company.

The WPRFU this past week, again, moved quickly to dismiss claims on the purported sale of Newlands.

As rugby365 reported, some of their property has been bonded as security for the more than ZAR44-million owed to Remgro.

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Wakefield, the current WPRFU President, but hoping to become Chairman of the board, still has the mandate to find an equity partner. Unfortunately, his reputation precedes him and cash-flush benefactors are not exactly lining up at present.

There is a ‘rescue plan’ in place, which could see the WPRFU become a property management company of some sorts.

The plans involve the development of parts of the Brookside fields in Claremont and properties behind the Jan Pickard Stand at Newlands. That will provide a steady income stream, but will require the WPRFU to go into partnerships with the developers.

Rumour has it that @WPRugby sold Newlands stadium today for R100 million. Not sure if it is true but wouldnt surprise me. #disgrace #desperation — CorneKrige (@CorneKrige6) August 3, 2018

In his dismissal of the Newlands sale rumours this week, Wakefield had the following to say: “The previously stated position with respect to properties owned by the Union remains unchanged.”

The development plans are well documented.

It is believed Remgro will be repaid from the income generated by the Brookside development. The properties (houses) in Newlands (bordering the stadium and set to be knocked down for the new development) are security for an overdraft of more than ZAR20-million by a major bank. The bank will get its payments from income derived from the Newlands development.

This is a long-term plan and does NOT resolve their short-term cash-flow issues.

Plans to lure players like Duane Vermeulen, Schalk Brits, Warrick Gelant and Embrose Papier to Cape Town is difficult with all the financial uncertainty.

This all while rumours are getting stronger that the move by the teams (Stormers and WP) to the Cape Town stadium could materialise before the end of the year. That will open the door to start the development of the Newlands Stadium as an income stream to start much earlier.

The BBCo would like to confirm that John Mitchell informed us that interest was shown in his services, no formal offer has however been received. The BBCo would furthermore like to confirm that John Mitchell’s contract with the BB Co expires on the 31 October 2019. pic.twitter.com/Agma8BySQN — Official Blue Bulls (@BlueBullsRugby) August 2, 2018

The Bulls, who are in an equally deep financial mire, are looking to go a different route to become more stable.

A recent report said the Blue Bulls Company is close to being declared bankrupt and is surviving on ‘loans’ and ‘handouts’.

rugby365 has learnt reliably that the Pretoria-based Atterbury property group is looking to buy Remgro out at the Bulls – with the 49.9 percent of their share in the Blue Bulls Company up for sale.

The Bulls are also in a major management restructuring phase – with the Bulls’ Executive of Rugby John Mitchell heading to England, CEO Barend van Graan retiring in January and President Gert Wessels having already resigned.

They also went through a retrenchment process recently – which saw junior team coaches Dewey Swartbooi and Denzil Frans, Super Rugby and Currie Cup defence coach Pine Pienaar, as well as team manager and former Springbok flank Tim Dlulane being shown the door. The retrenched personnel are all embroiled in legal litigation with the BBC over their dismissals.

Atterbury’s investment could solve some of the Bulls’ cash-flow issues, especially with the departure of Mitchell – who demanded a ZAR90-million budget to turn the team’s fortunes around – also freeing up some extra funds.

The problem with the Bulls is that they don’t have a property portfolio as impressive as the WPRFU to fall back onto and their crowd numbers have been shocking, to say the least – the worst, by some distance, of all four Super Rugby franchises.

A bumper edition in this months episode of Sharkbite TV features a number of exciting snippets, including one from our 2008 Currie Cup winning team, who recently came back to JONSSON KINGS PARK for their 10 year reunion. Be sure to catch all of this on @SuperSportTV!📺 pic.twitter.com/RQ9gUewqUs — The Sharks (@TheSharksZA) August 1, 2018

The Sharks are financially more stable than the Bulls and Stormers.

However, there could be some financial changes in the pipeline.

Jonsson Workwear, who has the naming rights to the Kings Park stadium in Durban, may be looking to get some equity shares.

Pay-TV station SuperSport, who previously had 25 percent equity shares, bailed the Sharks out a few years ago and obtained more shares – taking it to 49.9 percent.

It is not clear if they want to buy out Stephen Saad, Chairman of the board of directors, or what type of investment – in addition to their stadium sponsorship – they will make.

Not the outcome we wanted, but proud to play for you.

Thanks for your support all season long.#LetsUnite #CRUvLIO #Final80Minutes pic.twitter.com/p0U1IgRn9g — Emirates Lions (@LionsRugbyCo) August 4, 2018

The Lions, who played in three successive Super Rugby finals, is the most stable and unlikely to undergo any major changes in their financial structure.

Altmann Allers, Golden Lions Rugby Union vice-president and Glasfit owner, through Foxbell Investments, obtained a 49.9 percent equity shareholding in the Lions Rugby Company (Golden Lions Rugby Union) in 2011.

Despite the millions he has already invested into the Lions, Allers is ‘not looking’ for new partners.

The Lions are the closest example to the European model.

Allers is often referred to as a ‘vanity investor’ – the same as so many European football and French club rugby owners.

However, Allers’ roots at the Lions go much deeper, as he has helped – with assistance from Kevin de Klerk (himself a celebrated businessman) – bring the Lions back from the brink of bankruptcy to play in three successive Super Rugby finals.

Reports suggest that the Lions will remain in Super Rugby for 2019, perhaps 2020, but when the new deal has to be signed by SANZAAR they will also look to head north to one of the European competitions.

By Jan de Koning

@king365ed

@rugby365com

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