It’s been less than five years since SA Rugby – South Africa’s governing body – and the respective franchises opened their doors to private equity. 

From the outset, most experts hailed the decision as bold as well as necessary, as it had the potential to maximise commercial potential and lift the standard of rugby across the country. 

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With more money flowing into the system, SA Rugby had the means to keep more top Springboks in South Africa, while the Bulls, Lions, Sharks and Stormers had the resources to retain more of their players. 

It was never just about the money, though. SA Rugby and the franchises pursued these partnerships in order to expand their professional networks, particularly in Europe and the USA.

More than half of the Springbok squad that won the 2023 World Cup was based overseas, and that situation is unlikely to change in the coming years. That said, the situation within South Africa’s borders would be a great deal worse without the injection of private equity. 

The Bulls, Lions, Sharks and Stormers would suffer further losses in personnel. They certainly wouldn’t have the means to bring stars such as Willie le Roux, Wilco Louw, Eben Etzebeth and others back to South Africa from Europe. Reclaiming established club players who are yet to play international rugby or haven’t worn a Test jersey in years – such as Jannes Kirsten from Exeter Chiefs, Coenie Oosthuizen from Sale Sharks and Warrick Gelant from Racing 92 – isn’t a cheap exercise either. 

Eben Etzebeth for South Africa (Getty Images)

These resources have also served to improve the coaching pool. The Bulls restructured their organisation after Johann Rupert’s Remgro and Patrice Motsepe’s African Rainbow Capital acquired a controlling stake in the franchise back in 2019 – and proceeded to appoint Jake White as director of rugby. 

More recently, the Sharks, who are owned by the American consortium MVM Holdings, secured the signature of John Plumtree, a veteran coach who was previously with the All Blacks and Ireland. 

The Stormers went into administration in late 2021, and defied all expectations to win the 2022 United Rugby Championship title. Nevertheless, coach John Dobson has long prioritised an equity deal, and with The Red Disa consortium joining the fray this past December, the Cape franchise should have the means to strengthen their squad in the coming years.

SA Rugby continues to court private investors, with the aim of bolstering the national body’s structures as well as those of the franchises and provinces across the country.

South Africa private equity: The story so far

Since 2019, SA rugby has been negotiating with CVC Capital Partners about a potentially “game-changing” deal. CVC already has significant stakes in the Six Nations, Premiership and URC, and is looking to secure a percentage of SA Rugby’s commercial business. 

However, it emerged this past week that SA Rugby is in discussions with Ackerley Sports Group (ASG), an investment firm based in Seattle, USA. Talks are expected to conclude in late May, and it’s possible that SA Rugby could be the majority shareholder in a new company worth billions of rands.

In response to several media reports, SA Rugby sent out a release on Wednesday, confirming that ASG are the “preferred bidders”.

“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. 

“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. 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.”

It doesn’t take a financial genius to predict what this sort of money could do for the game in South Africa. While the Boks have won back-to-back World Cups, and some of the franchises continue to make waves in Europe, they are not yet operating a full potential.

Whether SA Rugby will have the support of the respective franchises in this new venture is another story. This week, News24 reported that the Bulls, Lions, Sharks and Stormers have sent a strongly worded letter to SA Rugby. 

The letter outlines the franchises’ concerns about the new ASG deal, and what it means for the long-anticipated partnership with CVC. It also laments SA Rugby’s lack of transparency.

It’s a situation that showcases an issue that is not necessarily new to the sporting world. Private investors that pump money into a team and set their own targets don’t want to be limited or controlled by a governing body. 

Last year, several teams were up in arms after SA Rugby withdrew the Boks for an eight-week period. It was a necessary move in the context of managing those players to peak at the World Cup in France – and in hindsight, completely justified. 

Nevertheless, teams like the Sharks struggled without their Boks, and their push for a top-seven finish in the URC, and ultimately a qualifying spot in the 2023/24 Champions Cup, was compromised.

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Of course, it gets complicated when that governing body is subsidising those teams to an extent, and is responsible for the biggest brand in the country: the Springboks. What’s more, SA Rugby has to look out for the nation’s interests, rather than those of the individual teams.

That’s not to say that the franchises, individually and as a collective, shouldn’t be heard. SA Rugby needs the franchises’ cooperation for any future equity deal to succeed. 

Is it possible to align the strategic vision of a governing body with that of four privately-owned teams? The respective parties will have to find a solution in the coming months.

Sources claim that some of the owners aren’t getting sufficient returns on their investment, and are tiring of a situation in which they are subject to SA Rugby’s rules. 

Meanwhile, SA Rugby is intent on doing what is right for the South African game – and ultimately the franchises could reap significant rewards of any deal down the line.

The injection of private investment certainly doesn’t guarantee success – and what’s happened to several clubs in parts of the UK and in New Zealand over the past few years should serve as a cautionary tale. 

That said, if SA Rugby and the franchises pull together over the next few months, and secure the right deal, then the Boks as well as South African teams may well unlock their potential in future.

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