South African Rugby Union (SARU)
By Sello Masilo
The South African Rugby Union (SARU) has announced its decision to appoint an independent financial institution to review the financial ecosystem of rugby in the country. This decision was made at a General Council meeting held in Johannesburg, following the failure of a private equity investment proposal in December 2024.
SARU’s leadership confirmed that this financial review would assess commercial and financial sustainability while exploring the role of potential private equity investments in the future.
SARU’s Decision to Seek Financial Expertise
SARU President Mark Alexander emphasized that the first step in the process would be to appoint a financial institution that can guide the organization on all financial aspects of South African rugby’s sustainability.
“We have been given a new mandate from the General Council to start a new process to review our commercial and financial prospects and define the process,” Alexander said.He added that the selected financial advisors would be appointed through an independent selection process, ensuring transparency and fairness in the decision-making process.
Selection Process for Financial Advisors
To ensure that the selection process is impartial and inclusive, the committee responsible for appointing the financial advisors will be broadly representative. The committee will include:
• One representative from franchise unions
• One representative from non-franchise unions
• Two independent members of the Executive Council
• Support from SARU’s CEO and CFO
Alexander further stated:
“We will take a measured and consultative approach under the guidance of financial advisers as we review the financial challenges and opportunities facing South African rugby.”Background: Ackerley Sports Group’s Failed Private Equity Deal
The decision to conduct a comprehensive financial review follows the failed private equity proposal from Ackerley Sports Group (ASG), a Seattle-based investment firm.
In December 2024, ASG proposed to invest $75 million (R1.4 billion) in exchange for a 20% stake in SARU’s commercial rights company. However, the deal required a 75% majority approval among South African rugby unions, and it failed to gain enough support.
Seven of the 13 member unions rejected the offer, citing concerns about selling a stake in South African rugby to a foreign investor. Some unions believed that the deal would dilute SARU’s control over the Springbok brand and intellectual property.
Alexander, however, had supported the deal, arguing that private investment was necessary to sustain and grow the game financially.
“We don’t have a reserve fund; we’re a break-even organization,” Alexander said.“This deal would have given us the financial backing to expand and strengthen our structures.”
Despite SARU’s assurances that the deal would not affect the Springbok emblem or jersey, opposition from key unions ultimately led to its failure.
Financial Challenges Facing SARU
South African rugby has enjoyed on-field success, including winning back-to-back Rugby World Cup titles in 2019 and 2023. However, off-field financial struggles remain a significant concern.
SARU heavily relies on the Springboks and its franchise competitions for the majority of its revenue. It generates 90% of its income from broadcasting rights, sponsorships, and commercial deals. However, with:
• High operating costs
• A weak South African rand
• An increasing number of players moving abroad for better salaries
…SARU faces serious financial sustainability issues.
The lack of sufficient revenue streams compared to other rugby nations is also a growing concern. For example:
• SARU generates $30 million per year, while
• New Zealand Rugby (All Blacks) generates approximately $75 million annually
Without new revenue sources, South African rugby risks falling behind other top-tier rugby nations in funding, player development, and infrastructure investment.
Financial Review: What It Means for SARU and Private Equity Investments
The upcoming financial review will not only analyze SARU’s current revenue streams but also explore new ways to generate income. This will include:
• Assessing private equity partnerships
• Reviewing broadcasting rights and sponsorship strategies
• Evaluating financial sustainability of domestic competitions
Alexander acknowledged that SARU will report a financial loss for 2024, but reassured stakeholders that commercial deals for 2025 had secured SARU’s financial future for the next three years.
“We expect a loss in 2024, but the strong commercial sales for 2025 have given us stability for the next three years,” Alexander confirmed.Despite this temporary stability, long-term financial planning remains critical, and SARU is keen to explore future investment options to strengthen South African rugby.
Opposition to Private Equity: Concerns from Rugby Unions
While SARU is open to revisiting private equity investments, some rugby unions remain opposed to the idea.
The unions that blocked the Ackerley Sports Group deal cited the following concerns:
• Selling a stake in SARU could lead to loss of control over strategic decisions
• Foreign investors might prioritize profit over the interests of South African rugby
• Financial transparency and long-term impact of the investment were unclear
• There was insufficient consultation with smaller unions before the proposal was tabled
union leader who opposed the deal commented:
“We want to grow rugby in South Africa, but we need full control over our game. Selling a stake means we risk losing our independence.”SARU’s Path Forward: Balancing Private Investment with Local Control
Despite opposition, SARU has not ruled out private equity investment altogether. Instead, it wants the new financial review to determine the best way forward.
A new investment strategy will likely focus on:• Seeking partnerships with South African financial institutions
• Exploring commercial sponsorship opportunities
• Finding alternative ways to increase revenue without selling equity shares
The financial review is expected to provide clarity on SARU’s financial options and help the organization determine if private investment is necessary in the future.
Springboks’ Global Brand and Its Commercial Potential
One of SARU’s biggest financial strengths is the global appeal of the Springboks. The team’s back-to-back Rugby World Cup victories have made them one of the most marketable brands in rugby.
SARU could look at:
• Expanding international partnerships
• Selling more Springbok merchandise globally
• Increasing match-day revenue from major Test matches
Maximizing the Springboks’ commercial value will be key to SARU’s long-term financial health.
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