'Unanimously chosen': SA Rugby sheds light on potential private equity deal
SPOTLIGHT: SA Rugby has answered some key questions relating to the reported multi-million dollar investment deal that is up for consideration.
Last week, in a statement, the American company Ackerley Sports Group (ASG) confirmed that they are negotiating a partnership agreement to invest in South African rugby at all levels, supporting the professional game, and growing the revenue base of the Springboks and SARU’s commercial activities.
United States media outlet Sportica reported that ASG is poised to invest $75 million (ZAR1.4 billion) in SARU.
Sportica also reported that SARU will be the majority owner of the new entity, while ASG will hold a roughly 20 percent stake, implying a total business valuation of around $378 million (more than ZAR7 billion).
In a statement on Tuesday, SA Rugby confirmed that they have been approached by “private equity companies who wish to acquire a shareholding in the sport’s commercial activities”.
They also confirmed that ASG was the preferred bidder.
“They were unanimously chosen by the members of SA Rugby – including the franchise-owning unions – at a General Meeting of SA Rugby on 7 December 2023 after ASG, and another bidder, CVC, made presentations to the meeting, “said the statement.
“ASG’s offer primarily focuses on immediate financial gain and guaranteed income, with lower thresholds for contingency payments, presenting a straightforward proposal for a commercial partnership, which we believe could offer comprehensive advantages to our organisation.
“The ultimate decision will hinge on balancing the immediate financial requirements with the long-term strategic objectives of our rugby organisation.”
With several rumours and reports circulating, SA Rugby wanted to make it clear that they are not selling the Springboks.
“The Springboks and all national teams will retain their existing management and ownership models.
“As national institutions, the Springboks and SA Rugby are not transferable to private equity.
“This strategy is about harnessing our commercial rights in partnership with an organisation, creating a separate entity dedicated to elevating our commercial profile.
“The new commercial entity will remit an annual fee to cover all current operations of SA Rugby – from paying the Boks to providing funding to the unions.
SA Rugby said a lot of the details need to be ironed out before it’s a done deal.
“Our team was mandated to pursue further discussion. The members of SA Rugby have agreed on the primary conditions; however, substantial effort is ongoing behind the scenes to finalise the specifics.
“Since the finer points are critical, no final approval will be granted until our members have been thoroughly briefed and a mandate secured. This process can only be agreed upon once our 14 members have approved it.
And on the final sign-off, SA Rugby added: “Only one body – the member unions of SA Rugby, the sport’s shareholders. It cannot happen without their approval.”
The statement added: “Once a proposed post-deal structure is nearing finalisation it will be workshopped with member unions. Until such time as that position has been reached it would be counter-productive to speculate on.
“While not definitive, it is anticipated that a conclusive proposal will be presented to the members at the Annual General Meeting scheduled for 30 May 2024, for their approval or rejection.”
Who is ASG
Ackerley Sports Group is an expansion of the investment practice established in 2002 by Ted and Christopher Ackerley at Ackerley Partners and includes four other members of the team, including their London-based partner, Timothy Kirkwood, who is overseeing the Springbok’s relationship.
Ackerley Partners has owned all or a part of a number of professional sports franchises, including the Seattle SuperSonics, the Seattle Storm, the Seattle Seadogs, the Seattle Seawolves, the Coachella Firebirds and most recently the launch of the 32nd NHL franchise, the Seattle Kraken. ASG also recently partnered with 49ers Enterprises to assume majority control of the Leeds United Football Club.
Ackerley Sports Group was formed in 2023 by Christopher and Ted Ackerley of Ackerley Partners, LLC in Seattle, WA along with their London-based partner – Timothy Kirkwood who brings a prolific background in international finance and investment banking. The platform invests in the sports sector with a focus on leagues, teams, venues, media, technology and development opportunities.
Additional sources: Ackerley Sports Group & Sportica
