Is SA Rugby the bully here?
AERIOS IN THE SPOTLIGHT: “The South African Rugby Union needs to act as a responsible governing body.”
With this chastising tone, Aerios Chief Executive Costas Constantinou said the national body should stop behaving like a ‘bully’ and resolve issues in an amenable manner.
In Part Three of his chat with @rugby365com – after Aerios filed damages claims amounting to ZAR183-million earlier this month – Constantinou accused SA Rugby officials of having a measure of arrogance in how they have dealt with the dispute.
Never one to pull his punches, the Aerios boss said he still feels they could settle the matter outside of court.
However, he admitted there are some serious issues within the South African Rugby Union/SA Rugby structures that will prevent an amenable solution.
“My concern is that they are going to blow it out of proportion and do something reckless again,” Constantinou told @rugby365com.
“There is an easy and amenable way to resolve this,” he said, adding that he is ready to return to the negotiation table.
However, he feels there are forces within SA Rugby that are not willing to find a solution.
“What stops SARU to follow the same road as WP Rugby,” Constantinou said, adding: “They can dissolve this company and emerge in another entity and sign up all the assets in a new entity.
“We saw how WP moved everything from the left hand to the right hand and carried on as normal.
“They are probably going to choose a road that is just damaging to everybody, because of their arrogance.”
Constantinou said he has nothing personal against SA Rugby officials Mark Alexander (the national body’s President) and CEO Jurie Roux.
However, he feels it would be naive or completely ignorant of SA Rugby to try and circumvent Aerios when they are representing two of the country’s biggest brands and hold quite a lot of rights.
“Jurie [Roux] has dealt with things in a way we find shocking,” he said.
“We have not been able to reconcile how he dealt with these issues.”
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Constantinou suggested Roux ‘continuously’ covered his tracks after making these ‘shocking’ decisions.
“This is a large part of this litigation, in respect of his actions and as a representative of SA Rugby.”
He hinted that there is a more ‘agreeable’ outcome to this matter, suggesting that all the parties come to the table and negotiate an amenable settlement.
The only reason why people won’t sit down is if there has already been too much damage and underlying antagonism.
“All we have been met with, when it comes to SARU [SA Rugby], is resistance,” Constantinou told @rugby365com.
“[There is a] resistance to find an amenable solution to our dispute. At no stage did Western Province Rugby or SARU come to us and say: ‘Look guys, we have some financial difficulties. Can we find another way?’
“Why would we not find an amenable solution when we just put ZAR15-million [in investment] into the stadium [Newlands].
“There was always an agenda.
“We always managed to resolve our issues with WP Rugby. When we had a problem with Rob Wagner in 2013, we resolved it without [having to go to the] courts. We continued [with the relationship] right up till 2016.
“The problem here is that Jurie Roux had made some mistakes. He sold rights to SuperSport that we had bought.
“We were ready to challenge those rights.
“My problem with SARU is [that] there is a lot of ignorance and a lot of arrogance. It is causing pandemonium.
“They saw what happened at the [Southern] Kings and they let Western Province go down the exact same route.
“As the custodian of SA Rugby, surely they should have made an effort to ensure WP Rugby does not go down that route, especially now that you have gone down that route [bankruptcy] with the Kings.”
Constantinou believes SA Rugby don’t have any rights.
They depend on the unions that they represent.
They depend on the big brands – like Western Province, Sharks, Lions and Blue Bulls – to be able to do the broadcast deals.
He pointed out that SA Rugby retain a lot of the revenue they source through the big unions.
“They [SA Rugby] don’t really own anything,” he told @rugby365com, adding: “They are just leveraging off the back of the unions.
“They should not dilute the value of the unions, because it ultimately dilutes your own value.
“The liquidation was an easy option for [SA Rugby CEO Jurie] Roux and [President Mark] Alexander.
“It sounded like they felt, with the stroke of a pen, all our problems are going to go away.”
He said Aerios has tried hard to discuss the issues with Jurie Roux, but he has not been willing to meet with Aerios.
“He took the approach that he was not allowed to meet with us a year ago. Which is strange, when they are the governing body that should be trying to resolve matters.
“Instead they have taken an arrogant stance and ignored, which has resulted in escalation.
“Their strategy has been one of ignoring the small guy eventually he will disappear.”
Constantinou said when Aerios reached out to Roux a second time, he said that he would make a plan and then just stopped responding to them.
“We went as far as sending him a detailed confidential letter that sets out the issues.
“It was intended to let them know that we now have a good idea, backed by facts [documentation from the 417 fact-finding enquiry] of what went on pre-, during and post WP Rugby liquidation. We clearly pointed out the role that SARU played.
“It was intended to ensure that this time they would acknowledge that there are some serious issues that need to be discussed and they, therefore, had to put their authoritarian attitude aside and come to the table.”
He pointed out that he gave SA Rugby ample opportunity to resolve the issues.
“A direct quote from the documentation we sent SARU: ‘Aerios has done a lot of work over a period of years to enable us to gather facts and take such action as we deem necessary. However, before we take further action, we thought it only reasonable to give you a confidential opportunity to understand, consider and immediately address our position, in the hope that we can avoid prejudice to innocent stakeholders, such as players, certain administrators, unions, international governing bodies, sponsors, broadcaster, future domestic and international competitions, and the general reputation of Rugby in South Africa’.
“Our [Aerios’] intentions were honourable.”
Constantinou said, despite forwarding some commercial suggestions of how they could resolve the stand-off, Roux again took a dismissive approach.
“We asked them to do a few inexpensive and simple commercial steps that could be taken over a number of years. That would not even give us 15 percent of what the extent of our damages was. We did this because we did not want the SARU Fincom to perceive that there was no light at the end of the tunnel.
“We wanted to make sure that we learn from what happened with WP Rugby [Pty] and ensure that the SARU executive understands that we are reasonable and that they do not make any moves that end up causing more destruction to Rugby in South Africa.
“Jurie Roux’s response this time was that the Finance Committee took note of the documentation and emails and then some nonsense about corporate governance.
“It was clear that Roux was doing what Roux does time and gain: bury his head, ignore the situation.
“If this was a decision made by the Fincom, after everything that has happened and everything we provided them, it is reckless and unsatisfactory behaviour that can only have a poor outcome.
“It appears there are serious issues within SARU [SA Rugby].”
He said all these problems started in 2016, when their rights that WP Rugby (Pty) Ltd had provided them for massive investment into the stadium, were intentionally ignored by the SA Rugby CEO, Roux.
“Roux sold our rights to SuperSport, as part of their broadcast deal. Roux included all mobile digital rights into the broadcast agreement. This was after he assured Aerios that he was going to split the rights into broadcast and mobile.”
He explained they had the rights to stream the game onto spectators’ phones in the stadium, the rights to push six minutes of highlights to the Stormers app.
Constantinou said those rights are reserved by SANZAAR, in order to allow media outlets to have news-worthy material.
They also have the rights to take spectator footage on a game day and develop shows with that content.
“This after SARU had acknowledged our rights in writing in 2015 and had confirmed that they would keep this in mind when they renewed their broadcast and mobile digital rights agreements. We were happy for SARU to provide our rights to SuperSport, but certainly not exclusively.
“This obviously did not happen and so the rights that we had obtained from WP Rugby [Pty] Ltd for a substantial investment of money and time had been completely ignored.”
Roux now had a dilemma, as this issue had put SARU on a collision course with SuperSport.
“Thanks to his reckless behaviour, SARU now was now under immense pressure to resolve this issue.
“This forms part of our court action, and you will see from the submitted action what our claims are.”
He said Roux resolved his dilemma by forcing WP Rugby into bankruptcy to extract them from a sticky situation.
“These rights were legitimately sold by WPRFU to WPR [Pty] Ltd and, under the ARMA agreements, WP Rugby had sold certain mobile digital rights to Aerios.
“This will also form a part of our court action.
“We will set out to show who these rights legitimately belong to.
“We will also demonstrate the effect this had at the time and would continue to have in the future, given the manner in which SARU deals with the broadcast and advertising rights of the unions.”