What the WPRFU clubs will vote for: 'Life or death'

The harder you scratch, the more it leaks!

This certainly rings true for the embattled Western Province Rugby Football Union – a union that seems to go hand-to-hand with crisis management.

Scratching well below the surface – in the wake of the revelation that Red Disa Investments was in advance discussions to obtain a controlling share in Western Province Professional Rugby – it has become obvious some ‘festering boils’ are still bedevilling the union and indeed the company/franchise.

The self-serving factions that undermined the union and its professional arm (WPPR (Pty) Ltd) in the past are still very active and courting the next ‘opportunity’.

And they were at it again this week, as the South African Rugby Union presented to the WPRFU General Council the only remaining equity offer left on the table – after 13 of the 14 ‘expressions of interest’ fell by the wayside.

Red Disa Investments – led by Fynbos Ekwiteit and Ardagh Glass Packaging Africa, along with Marble Head Investments – confirmed that they are in the final stages of discussions to acquire a 74 percent stake in Western Province Professional Rugby.

The details of the offer – for a controlling share in the Stormers and Western Province professional teams – were presented to the GC (most of the 90-odd clubs) at the Cape Town Stadium this past Wednesday, August 30.

The equity offer – to be voted on next Wednesday, September 6 – aims to end the two years in administration for WPRFU.

However, it has far greater implications than just ending SARU’s administrative and financial management of the maladministered organisation.

Those refractory clubs – and there were some very vocal members at this past Wednesday’s meeting – still digging their heels in, have the potential to cause the end (as in ceasing to exist) of the professional game in Cape Town (read Western Province).

SARU has made it blatantly clear that a ‘NO’ vote next Wednesday will bring about the end of ‘funding’ for the WPPR (the professional game) in the Western Cape.

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In the two years since the start of the administration in October 2021, SARU has loaned WPPR about ZAR80-million.

In the 2022 annual report, SARU confirmed there were ‘loans’ to member unions of ZAR84.7-million- which suggests about half of that was for the cash-strapped WPRFU/Stormers.

However, that tap will be summarily turned off by SARU if those recalcitrant clubs win over the day.

By all accounts, it was a 50-50 affair on Wednesday, although some believe SARU CEO Rian Oberholzer managed to ‘win over’ some key embers.

No doubt some serious canvassing will be done before the big vote this coming Wednesday, but if we have learnt anything about the WPRFU environment the last four or five years is that solipsistic club members will be up to their usual antics.

The reality is, if they do garner enough support, it will have cataclysmic consequences for the game.

Not only will WPRFU – the 100 percent owners of WPPR – be liable for the loan to SARU, but WPRFU as the sole owner of the company will have to foot the bill for any future expenses.

It has been suggested the company (WPPR) could run at a loss of ZAR50-million.

WPRFU already owe property company Flyt about ZAR200-million for a loan made to WPRFU back in June of 2020.

Zane de Decker, the Chief Executive Officer of Flyt Property Investment, has bonds registered on all the WPRFU properties. He is reclaiming not just the loan amount, but escalating interest, a raising fee, damages and costs – which all add up and is putting the union into a deeper hole.

Given that both the amateur and professional arms are for all intents and purposes bankrupt – without any of the SARU funding – they will not be able to make payroll by the end of next month.

It will mean the end of participation in any professional competitions – like the United Rugby Championship and European Cup.

In fact, Western Province could slip down the same humiliating and degrading slope that saw the Southern Kings disbanded and the Eastern Province amateur team floundering in South Africa’s second tier ‘First Division’.

The Cheetahs, no doubt, would jump at the chance if SARU were to offer the fourth franchise license to interested parties, although newly-crowned First Division champions Boland is another union keen to obtain ‘franchise’ status.

Remgro CEO Jannie Durand confirmed to @rugby365com recently that they are in the process of buying a ‘controlling share’ in the Boland Rugby Union.

They will be part of the same consortium which owns a 74 percent share in the Blue Bulls Company – Johann Rupert (Remgro) and Patrice Motsepe (African Rainbow Capital).

Just as in their deal with the BBC, Remgro and ARC will own 37 percent each of the BRU – with the Boland union retaining the other 26 percent.

That is what makes the WPRFU vote so important next Wednesday.

While the Red Disa offer will be the biggest equity rugby deal in South Africa, any more resistance will not just kill off the last remaining offer, it may well force SARU to pull the plug on a union that has long been a thorn in their collective flesh.

It is interesting that one of the biggest grievances aired since @rugby365com published details of the equity offer, centres around Intellectual Property.

One of the ‘conditions precedent’ by Red Disa for the offer, includes the transfer of all intellectual property (including all trademarks, customer data, badges and logos) associated with Western Province and the Stormers from WPRFU to WPPR.

In return, WPRFU will get 53 ordinary shares in WPPR (the agreed value of such shares being ZAR10.6-million).

This was a point raised, in no uncertain terms, by interested parties to @rugby365com.

It was also raised, and answered, at this past Wednesday’s meeting.

It didn’t seem to have been a point of contention at Wednesday’s meeting, but was raised as an issue a day later.

As I said, there is bound to be lots of canvassing, misinformation and other rationales – for and against – before the vote for the equity deal next Wednesday.

From the sideline, it seems obvious they will be voting for ‘life’ (the continued existence of the professional game in Western Province) or ‘death’ (the demise of the professional game).

@king365ed
@rugby365com