Who runs rugby in South Africa? Administratively, the answer seems simple: the South African Rugby Union (Saru), whose executive is appointed by the country’s 15 provincial unions. These unions in turn represent all the clubs and players in their geographic areas. It seems like a model of democratic practice.
When it comes to governance, however, the situation is more complicated. There seems to be an assumption that the individuals who represent the 15 member unions are the equivalent of nonexecutive directors of a listed company. Four of the unions are elected to the Saru executive committee, which also has people appointed from outside the game, or at least from outside its structures. That adds to the impression of an effective governance structure.
However, a better analogy would be an agricultural co-operative. In a district housing 15 cattle farmers, say, all of them have an interest in getting consumers to eat more steak. However, they are also in competition with each other.
So it is with rugby. The provincial unions all have an interest in ensuring the Springboks are successful. The downstream dividends for them are substantial, financially and in spectator enthusiasm and the creation of local heroes.
Who owns South African rugby? Who owns the Springboks? The answer surely has to be that they are national assets
But they also try ruthlessly to beat each other on the field in domestic tournaments such as the Currie Cup and international contests such as the United Rugby Championship. They compete to sign the best players, and many unions have equity partners who provide much of the funding to spend in the transfer market. The model has evolved so that conflicts of interest are almost built in.
It is a paradox that the leading teams in major sports have developed powerful brands and attract huge revenues — yet many are deep in debt. Manchester United has a brand value of $1.49bn, fourth in the Visual Capitalist rankings after Real Madrid, Manchester City and Barcelona. Yet United has debt of $990m, up from $644m in 2019. Many rugby clubs are in a similar position as they try to deal with the rampant inflation in the cost of employing and retaining top players.
This is why clubs and countries in various codes, seeking the really big bucks that simply cannot be generated by ticket revenue, traditional sponsorship and pay TV, are turning to private equity companies and individual billionaires, such as Sir Jim Ratcliffe at Manchester United.
In the process, the danger is that those who nominally run the sport will become powerless. This is what could be playing out in the attempts by Saru to partner with Ackerley Sports Group (ASG), an apparently dodgy private equity company, as this week’s cover story reveals.
Who owns South African rugby? Who owns the Springboks? The answer surely has to be that they are national assets, owned by the country’s people. That is why it is so important that those negotiating deals on behalf of rugby and the Boks are as transparent as possible about the implications. Yet with the intended ASG deal, Saru CEO Rian Oberholzer has refused to say who the potential investors are or to explain why the deal depends on keeping them anonymous.
Rugby has long had a reputation for flaky governance — it’s time for that to change before it’s too late.
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