Without a doubt, there are few transactions that have captured the South African public’s imagination as much as the potential sale of a 20% stake in a new commercial-rights company overseeing the national Springbok team to private equity firm Ackerley Sports Group (ASG).
With this deal receiving a high degree of public scrutiny, it has been great to see industry experts and stakeholders attempting to unpack the deal and putting forward suggestions on how to enhance the transaction.
Some of the great coverage includes:
- Warren Wheatley from Altvest spoke to BizNews about a model which could see fans becoming shareholders alongside professional investors
- Transaction advisory specialist Nqobile Khumalo raised the important question of equitable access for fans – something which has been quite topical as many of the games have been behind the Pay-TV / Multichoice model
- Marketing / Sports Marketing thought leader Sgwili Gumede also wrote an interesting LinkedIn post highlighting the ESG credentials of the Springboks and the credentials of the US private equity partner
- Koshiek Karan put together an excellent thread on X unpacking the financials of the deal
As an investor communications business, these are some of our key takeaways.
ESG is a thing when it comes to the Springboks
Few acronyms spark as much debate, speculation, or controversy in financial circles as ESG (Environmental, Social and Governance).
The Springboks have long been a unifying force in South Africa, from the iconic moment when President Nelson Mandela stood alongside Bok captain Francois Pienaar during the 1995 World Cup, to the leadership of Siya Kolisi, which has led the team to multiple World Cup victories. Few brands have united the country as powerfully as the Springboks.
Being able to capture and enhance this cohesiveness and national spirit is a true example of the “S” element of ESG and it is something that we should strive to should aim to leverage for a strong return on investment.
The importance of a diversified deal-making team
With US equity valuations elevated and South African valuations depressed – but improving alongside sentiment – we can expect more international interest in local investments.
While South Africa may have endured a challenging past decade, we cannot lose sight of the fact that we have some attractive assets. Whether it is the Springboks, a world-class banking environment and stock exchange or tourism destinations, we have a lot to offer.
As an Emerging Market, there are a couple of dynamics which need to be taken into consideration – including protecting interests – over the long-run.
Anecdotally, it feels like the transaction would benefit from some alternative perspectives, underscoring the importance of a diversified deal-making team
Managing stakeholder expectations and concerns:
While speculation around this deal has been circulating for the last few months, it was ultimately a letter signed by some of South Africa’s business elite and the various rugby unions which suggested they were not onside with the deal.
According to The Daily Maverick signatories included: Stephen Saad (Aspen Pharmacare CEO), Marco Masotti (the Sharks controlling shareholder), Johan le Roux (Stormers CEO), Altmann Allers (Lions chairman and Digicall Group chairman), Willem Strauss (Blue Bulls president), Andre Markgraaff (Griquas CEO), Bennie van Rooi (Boland president) and Coenraad Klopper (Cheetahs president).
What has been striking from a communications perspective is that SARU appears to not have a coherent response to the criticism. SARU President Mark Alexander has been quoted as saying: “We remain committed to transparency and accountability, and it is important to correct the misinformation and posturing that has surfaced in the media,” – however there has been very little specific responses unpacking the pros and cons of the deal that counter the negative feedback.
An experienced IR team plays a crucial role in addressing stakeholder concerns, as seen in the resistance from the provincial unions. These unions raised issues about governance, the fee structure, and the deal’s potential long-term impact on the commercialisation and control of South African rugby.
An IR or communications team could help articulate the benefits of the deal more clearly, ensuring transparency and building trust among all stakeholders.
Effective communication strategy around value proposition:
In short, it feels like SARU is far less organised than those opposing the deal – particularly when it comes to a communications strategy.
The controversy surrounding the valuation and governance of the transaction suggests a need for clear and consistent messaging. We need to hear why this deal is good for stakeholders beyond SARU.
An expert communications team could create a strategic narrative to explain why the deal with ASG is in the best interest of SA Rugby – currently we are only hearing the messaging from those opposing the deal.
The JSE and Cape Town Stock Exchange (CTSE) have not seen a particularly robust pipeline of listings in recent years, but this deal has captivated everyone—from transaction advisors to rugby administrators and fans. It provides unique insight into the world of deal-making and, more importantly, challenges us to thoroughly examine the value proposition for SARU and the broader Springbok brand.
Here’s hoping that we can see the conclusion of a transaction which provides long-term benefits to all stakeholders.