Newlands split: Where will the money come from?
Despite the ‘force majeure’ that 2020 brought upon them, Western Province Professional Rugby Chairman Ebrahim Rasool is confident they can right the listing ship.
In an extraordinary and exhaustive media briefing, Rasool revealed that the WPPR – the professional arm of the Western Province Rugby Football Union – has separated from the union.
However, this is not a quick fix to the problems of the besieged franchise.
Rasool, flanked by WP and Stormers coach John Dobson, admitted there are some ‘cash flow’ issues from time to time because of a “force majeure” called COVID-19
However, he is adamant they will be able to meet all their obligations to players.
With all the financial chaos – Remgro, Investec, Flyt and MVM – now resting within the domain of the WPRFU, Rasool opted to take a ‘hands-off’ approach and look from the sidelines us those dramas at the union continue to play themselves out
“In my naïvety, I treaded onto things that were not within my jurisdiction and it is not a mistake I would want to repeat,” he said about the unfolding of the dramatic events of the last week.
He spoke of a ‘firewall’ between the Union (WPRFU) and the company (WPPR) – both legally and exceptionally.
“The beginning of this turnaround – in perception and fact – must start with us.”
* To see the question about income streams, watch from 23 minutes on the video!
Players are within the company’s jurisdiction – with the players reportedly, according to Rasool and coach John Dobson, wanting to stay in Cape Town, they must now provide “governance, stability and integrity – as well as financial viability and sustainability”.
However, the burning questions remain: ‘What will the company’s income streams be? Where will they get their money from and how will they repay the more than ZAR50-million WPPR already owe WPRFU?
“Our Chiefs Financial Officer says Western Province is a simple business,” Rasool said, when asked by @rugby365com about income streams and sustainability.
“It [WPPR] has a set of income streams, such as sponsorships,”the Chairman said, adding: “We are at an advanced stage, very positively, with those negotiations.
“That is an income stream that is positive.”
He said he expects to make an announcement in this regard in the next month.
“The others [income streams] have been impacted by COVID-19 significantly.
“We’ve had loyal spectators in WP. We’ve had season ticket holders that have been enormously patient.
“We are now having suit applications for the Cape Town stadium.
“We know things are uncertain, which may affect those [income streams].
“Advertising has also been impacted, but we are turning a negative into a positive.
“There is more space in the [Cape Town] Stadium to advertise. We need to maximise that.
“We have a great shareholder [WPRFU], who has bailed us out where necessary and has been patient about repayments.
“We hope that will be their continued approach.
“Because of the component of Springboks we have, SA Rugby has been a major contributor to us maintaining and retaining our ‘apex’ players in Western Province.
“I think we are not in danger, financially, at all.”
He admitted, “like every other sporting code across the world”, they are facing cash flow issues from time to time, because of a ‘force majeure’.
“COVID-19 is a force majeure,” Rasool said, adding: “We all have to adapt.
“We are confident that our obligations will be met to players, to sponsors, to the rugby fraternity and we will continue to win over the patience of the shareholder in terms of what we owe them.”
He admitted it may not be in his ‘jurisdiction’, but he felt an equity partner (or partners) is “certainly required” in the post-COVID-19 environment – given the uncertainties and changes that come with it.
However, there still seems to be an issue with relinquishing control of the company – which resulted in Marco V Masotti and his American consortium, MVM Holdings, walking away last week.
“It must be an equity deal that is not only pumping in money, but adds value and doesn’t take away from Western Province .”
He spoke of the ‘huge legacy’ of intellectual property of the people of the Western Cape, the many ‘political and playing traditions’.
“It mustn’t be a situation where we compromise the value of the Western Province brand.
“It [equity deal] is needed, but the shareholder [WPRFU] will be applying its mind to that.”
The coach, Dobson, explained that the process of retaining players is a key component of righting the ship.
“There were some ‘personal’ conversations,” he said of the one-on-ones he had with players.
“I asked them: ‘Are you keen to stay?’
“The answer, unanimously was: ‘Yes’.
“The next step will be a more formal chat, via his representative, where we will enter into formal negotiations.
“Our players are all contracted till October 2021 and there is a 180-day transfer window.
“We have until April next year to formalise everything. We are about to undertake the process of formal negotiations.”
@king365ed
@rugby365com
Also worth reading …
The big ‘split’ at Newlands
Marais explains the way forward
And the hits keep coming
Flyt bomb drops on Newlands saga
Siya Kolisi is going nowhere’
Change of attorneys at heart of WPRFU about-turn
New legal twist in Newlands saga
‘Miscommunication’ blamed for statement
Mystery of the missing sentence
