Private ownership: SARU's bold 'international' move

Fri, 28 Oct 2016 13:00

IN THE SPOTLIGHT: South Africa's Super Rugby franchises took a significant step closer to private ownership this week.

This emerged after Mark Alexander was formally inaugurated as the President of the South African Rugby Union this week.

Alexander revealed that SARU is looking to increase the allowed 'private equity' involvement at all levels from 49 percent to 74 percent and that there is already interest from abroad - especially the United States and Australia.

Apart from the national team's dismal form - with five losses in the first nine Tests under new coach Allister Coetzee - the economic and financial situation facing the country has led to an exodus of players leaving South African shores for the stronger currencies in Europe and Japan.

Alexander said that SARU has decided to increase the percentage of equity in order to keep the best players in South Africa and in order to contribute to the growth of the game with more and bigger financial resources available.

"We are going for 'licensing' so the equity partners can participate," he said, adding: "We are toying with the number, but it looks like a 72 percent or even up to 74 percent."

Commenting on the increase of equity involvement from 49 percent to a potential 74 percent, Alexander said the increased capital and investor involvement will lead to improved administration throughout all divisions of SARU.

"It's to bring more professionalism and more money in the game. It's to run these franchises like businesses," said Alexander.

Alexander added that SARU have done their homework on potential investors and they will be making their final presentations with potential sponsors and equity partners from November until March next year.

"We have tested the current equity partners, who are looked at quite favourably, and we will be going on a roadshow to talk to the sponsorship market as well as investors.

"We will have a roadshow starting middle of November up till March next year," explained Alexander.

Alexander said the franchises will be responsible for attracting their own investors, with a lot of interest showing up from 'foreign sources'.

"The various franchises will. We are bumping into these people [potential investors] on an ongoing basis and a lot of them are outside the country, especially the US.

"There was an appetite from an outside source that owns the [Australian-based Melbourne] Rebels," Alexander said.

By Josh Isaacson, in Johannesburg