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SA Rugby is planning a private equity deal which will see an American-based firm buy a 20% stake in the Springboks.

According to SA Rugby Managing Director Rian Oberholzer, they will seek approval at a general council meeting on 30 May to sell the 20% stake of the rights to a Seattle-based private equity firm called Ackerley Sports Group.

The Springboks’ commercial rights have been valued at $375 million (R7.1 billion).

“If we only had to worry about the Springbok balance sheet,” a deal wouldn’t be necessary, Oberholzer said by email in response to a Bloomberg News query.

“But we’re a national federation as well, required to support and promote rugby across the country with many mouths to feed.”

The proposed transaction is part of a rising trend among national federations of the world’s most successful rugby teams to obtain capital through private equity. Money managers increasingly turn to sports leagues and federations, rather than individual clubs, to diversify their investment risk.

In 2022, Silver Lake Management agreed to a 7.5% stake in the commercial activities of New Zealand Rugby for NZ$262.5 million (R3 billion).

According to Oberholzer, SA Rugby hopes to generate R800 million in sponsorship money by 2027, more than double the amount earned last year.

Oberholzer says that the Ackerley Sports Group was selected by Six Nations Rugby competitions investor CVC Capital Partners in December. Under the agreement with Ackerley, South African rugby unions will retain sole responsibility for all sporting matters, such as team management, and SA Rugby will maintain a majority stake in the company it is planning to set up to hold the rights, according to Oberholzer.

Ackerley Sports Group, founded last year by brothers Christopher and Ted Ackerley of Ackerley Partners LLC, invests in the sports industry, focusing on leagues, teams, venues, media, and technology. The group has invested in several sports clubs, including the Seattle SuperSonics and Seattle Storm in basketball, the Seattle Seadogs in soccer and the Seattle Kraken hockey team.

Last year, the family’s private holding firm acquired a minority investment in the English football club Leeds United.

SA Rugby plans a number of information sessions on the deal for its general council members before 30 May.

[source:businesstech]