SA Rugby Rejects $75 Million Private Equity Deal Amid Financial Struggles and Controversy

In a major blow to South African rugby, the proposed private equity deal for the commercial rights to the world’s highest-ranked rugby team, the Springboks, has been rejected. The deal, which would have seen a 20% stake in the newly created commercial-rights company sold for $75 million to Seattle-based Ackerley Sports Group LLC, failed to meet the required 75% majority for approval.

SA Rugby, the governing body for rugby in South Africa, had hoped the deal would help stabilize its finances. The organization has faced ongoing financial challenges, struggling to turn a profit for over a decade despite the success of the Springboks. The funds raised from this deal were expected to create a reserve fund and improve the team’s commercial income, which currently lags behind that of its rivals, particularly New Zealand’s All Blacks.

However, the proposal has sparked controversy, with seven of SA Rugby’s 13 member unions voting against the deal. Concerns about the lack of South African participation, governance, and the ethical implications of the deal have dominated discussions. The prospect of loosening local control over a team that has become a symbol of transformation in post-apartheid South Africa has also raised alarms.

Despite the rejection, Ackerley Sports Group still has until the end of 2024 to submit a revised offer. In the meantime, a rival bid has emerged from a group of South African investors, including AltVest Capital and EasyEquities, offering $372 million for up to a 40% stake in the Springboks’ commercial rights.

As SA Rugby continues to face mounting financial pressure, the search for solutions to secure the future of the Springboks and rugby in South Africa remains ongoing. The outcome of this bid and the broader debate over private equity in sports could have lasting implications for the country’s rugby landscape.

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