The disintegration of the Southern Kings’ private equity partners highlights a deep-rooted problem for SA Rugby, writes SIMNIKIWE XABANISA in the latest SA Rugby magazine.
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If the Southern Kings’ most recent ‘ownership’ misadventure is anything to go by, SA Rugby needs to tighten up the rules of engagement when it comes to the thorny issue of private equity partners for its unions.
As recently documented, the Kings’ majority shareholders were given their marching orders by SA Rugby, barely 18 months into what the rugby industry had hoped was a final solution for a region which has had its fair share of what can only be euphemistically called ‘bad luck’ administratively.
We really should have known we were being punked when the licence to the Kings’ franchise was given to a company named The Greatest Rugby Company in the Whole Wide World (GRC), but there was a faint whiff of desperation all round to promote what turned out to be a marriage of inconvenience.
Most of said desperation belonged to SA Rugby, which has been saddled with the responsibility of their brainchild ever since it decided it was imperative that the Eastern Cape had what was then a Super Rugby franchise.
In one of those ‘no good deed’ situations, rugby’s governing body has had reason to regret insisting on trying to give a key rugby region its own franchise as the venture has been nothing short of a nightmare.
From Cheeky Watson’s Eastern Province Kings presidency leading that union straight to liquidation – and the franchise into a situation where they couldn’t pay players for months – to mostly disastrous performances on the field, the Kings have been a dark hole into which SA Rugby has thrown money since inception.
While not verified, it is estimated that SA Rugby has sunk in the region of R56-million propping up the Kings. This is why when the GRC came knocking last year, asking to take the franchise off SA Rugby’s hands there was almost an indecent haste to give it to them.
The consequences of that is why, looking back, the powers that be should put greater emphasis on doing their due diligence on the many chance-takers who profess to want a franchise licence.
The Kings’ most recent owners got a lot of things wrong: while they were proper rugby fans, one got the impression they had no idea how to run a rugby franchise, allowed their attempts to sign a head coach descend to farcical levels and frequently paid over the odds for players who were either past it or just plain average.
But the biggest issue with their ownership was their funds, or lack thereof.
Like all smart business people, the GRC lot clearly decided not to use their own money to run the Kings, relying on recycling a combination of the broadcast rights grants from SA Rugby, Isuzu’s sponsorship, Eastern Cape Government money and funds from the metro to keep things ticking over.
But their failure to make their first payment to SA Rugby in September – having run up a R45m debt in buying the Kings – confirmed they never intended to use their own money, which triggered the governing body withholding the broadcast money to service the debt.
That, in turn, led to history repeating itself and meant SA Rugby had to take over running the Kings again. Looking at how that panned out, the man on the street is left with thinking that maybe obtaining a franchise is a little too easy due to SA Rugby’s numerous financial responsibilities.
It’s not enough for a consortium to say it has money, SA Rugby has to check if that indeed is the case to avoid the embarrassment they’ve had with the GRC.
It’s almost as if we learnt nothing from the Fidentia fiasco from years ago.
