Lions must 'pay up'

Wed, 22 Aug 2012 15:32
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The Lions have been dealt another crippling blow, with confirmation that they lost the arbitration case against their Super Rugby partners.

The Lions have been dealt another crippling blow, with confirmation that they lost the arbitration case against their Super Rugby partners.

Golden Lions Rugby Union President Kevin de Klerk confirmed to this website that the ruling in the protracted stand-off went against his union.

The Lions' Super Rugby partners, the Leopards and Pumas, claimed they were owed millions of Rands as their percentage share in the profits of the franchise.

De Klerk, who described this as "legacy issues" he inherited after taking over from Jannie Ferreira a few years ago, said there was never a formal franchise agreement.

"Yes, the arbitrator ruled in favour of the Leopards and Pumas," De Klerk told this website.

De Klerk, who said he still hasn't found any proper documentation to determine what was supposed to be paid or what was the structure of the agreements, said they will abide by the arbitration ruling.

"We have lost, but we do have mechanisms in place to look at this," the GLRU boss said, adding: "It won't bankrupt us."

Asked if they have to pay it in one lump sum, or if they will pay in instalments, De Klerk said those are the issues they are still discussing and negotiating.

De Klerk also said the ruling will not affect their ability to retain players.

"As I said, we do have mechanisms in place to deal with this," De Klerk said.

The ruling by retired Judge WJ Hartzenberg determined that the Lions must pay the Leopards Rugby Union the amount of ZAR2 565 000, being franchise monies for 2008, 2009 and 2010 ( according to the franchise agreement they are due roughly ZAR250 000 per year). Furthermore they were ordered to pay interest on the ZAR2 565 000, at the rate of 15.5 percent from the date of the arbitration agreement (31 May 2012) until the date of payment.

The Pumas and Lions came to an agreement regarding payment for the aforementioned period.

Furthermore, the Lions must pay the cost of the arbitration incurred by both the Mpumalanga Rugby Union as well as the Leopards Rugby Union.

In a joint statement, the Pumas and Leopards said: "The Leopards Rugby Union and the Mpumalanga Rugby Union remain committed to the success of the Lions Franchise, notwithstanding the fact that the Lions Franchise will not participate in Super Rugby during the year 2013."

* The ruling by Hartzenberg (in the arbitration proceedings between the Leopards Rugby Union, the Mpumalanga Rugby Union and the Golden Lions Rugby Union):

The arbitration proceedings resulted from the dispute between the above-mentioned rugby unions regarding the payment of franchise monies on account of the participation of the Lions Franchise in Super Rugby since 2006.

The order as pronounced is of a dual nature:

1. Claim A (As regards 2008, 2009 en 2010)
1.1. The Golden Lions Rugby Union must pay the Leopards Rugby Union the amount of ZAR2 565 000.00, being franchise monies for 2008, 2009 and 2010.
1.2. No amount is payable to the Mpumalanga Rugby Union for this period as the parties concluded an earlier agreement on payment.
1.3. The Golden Lions Rugby Union must furthermore pay interest on the amount of ZAR2 565 000.00, payable to the Leopards Rugby Union, at the rate of 15.5 percent from the date of the arbitration agreement, namely 31 May 2012, until the date of payment.

2. Claim B (As regards 2011 and 2012)
2.1. The Golden Lions Rugby Union is instructed to conclude a business arrangement for the 2011 and 2012 seasons with the Mpumalanga Rugby Union and the Leopards Rugby Union within two days after the granting of the arbitration order.
2.2. In the event of the parties not being able to reach an agreement as mentioned above, SARU is instructed to come to a decision on a fair and reasonable distribution of the amounts of ZAR6 600 000.00 for the 2011 and 2012 seasons.
2.3. Should SARU come to a decision that the Golden Lions Rugby Union must pay a portion of the amount of ZAR6 600 000.00 to the Mpumalanga Rugby Union and the Leopards Rugby Union for the 2011 and 2012 seasons, the above-mentioned amounts must be set off against the franchise payment of ZAR750 000.00 per annum payable by the Golden Lions Rugby Union to the Mpumalanga Rugby Union and the Leopards Rugby Union for the 2011 and 2012 seasons.

3. The Golden Lions Rugby Union is instructed to pay the cost of the arbitration incurred by both the Mpumalanga Rugby Union as well as the Leopards Rugby Union.

By Jan de Koning

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