robdylan

Supersport recapitalise Sharks


Written by Rob Otto (robdylan)

Posted in :Original Content, Sharks on 20 Jul 2016 at 08:17
Tagged with : , , , ,

It’s understood that a fresh lot of shares in the Sharks have been sold to Supersport, in the interests of providing the company with a cash boost.

The Sharks – 60% held by the KZN Rugby Union and 40% by Supersport – are rumoured to be in somewhat of a financial crunch at present and this move would seem to give credence to those stories, first raised in a letter written by former CEO Brian van Zyl. As majority shareholders in the Sharks, it’s the KZN Rugby Union (and the clubs that it comprises) that is most dependent on the profited made by the professional arm and with this years grants to clubs understood to be “on hold” pending financial difficulties at the company, it’s not surprising that action has been taken.

We believe that Supersport has increased their stake to 49%; in other words, the KZN Rugby Union has agreed to sell 9% of their majority holding in the company to Supersport, in return for a sum of money somewhere in the region of R40m .

While it’s good news for the fans that the Sharks are receiving this cash, we do have to question two things; how did the current management allow this situation to develop and why are they steadfastly refusing to go “on record” about what the situation is. Both CEO John Smit and Union President Graeme McKenzie have recently told the media that the financial of the company are sound. This is clearly not the whole truth.

The Sharks are expected to unveil Smit’s replacement as CEO at a press conference this morning.



74 Comments

  • So the truth unravels. Just a pity it turned into mud and petty personal feud

  • Comment 1, posted at 20.07.16 08:19:58 by Kabouter Reply
    KabouterCurrie Cup player
     
  • I read somewhere that Smit said the sharks are basically breaking even this year after quite a few years in the red. That would have destroyed any reserves that they had. So as a company they are pretty ok now.

    We also were never told what the full extent of the forensic audit was, so there might have been some sars penalties or super shady creative Accounting or something involved?

    If they’ve sorted that issues out, we should be fine for the future.

  • Comment 2, posted at 20.07.16 08:25:46 by Dragnipur Reply
    Friend of Sharksworld Author
    DragnipurSuper Rugby player
     
  • The good news in this is that Supersport is willing to throw some cash into the Sharks. The bad news- with 49% now and private ownership not allowed this seems to be the last money that Supersport will invest in the Sharks so the ship needs to be steadied and quickly. So much for the transparency concept of corporate governance. Half of the club grants also arent being paid which directly influences rugby growth in the province. Get on your bike Smitty and get someone with business sense in asap!

  • Comment 3, posted at 20.07.16 08:26:16 by SheldonK Reply

    SheldonKAssistant coach
     
  • I don’t think R40m is a lot in a rugby union, will certainly help short term, but not in the long run. It is for only 9% extra though I think it’s still too little.

  • Comment 4, posted at 20.07.16 08:30:08 by Quintin Reply

    QuintinSuper Rugby player
     
  • NB (FTL), I, Salmonoid, did not write this article.

  • Comment 5, posted at 20.07.16 08:30:53 by Salmonoid the Subtle Reply
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  • Oh boy, I know of two Sharksworld regulars that will feel vindicated by this little piece of news….still doesn’t change the fact that BvZ needs to realise that he is irrelevant to the Sharks cause – clearly he’s miffed because the club he’s involved with (heard somebody say something about him being involved with a kzn club), can’t cash his paycheck. So quit the act BvZ, you’re just interested in your bank balance.

  • Comment 6, posted at 20.07.16 08:34:12 by FireTheLooser Reply

    Assistant coach
     
  • More JS lies….Hope he goes to Church after leaving office at the Sharks.

  • Comment 7, posted at 20.07.16 08:34:17 by Uli Boelie Reply
    Valued Sharksworld Supporter
    Uli BoelieTeam captain
     
  • @Salmonoid the Subtle (Comment 5) : :shock: not?! :)

  • Comment 8, posted at 20.07.16 08:35:58 by FireTheLooser Reply

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  • @Salmonoid the Subtle (Comment 5) : Thought you might have convince Rob to put his name to your little write-up, or is that the sole domain of articles published in the Mercury (not that I’ve read the latest one to make the news) :)

  • Comment 9, posted at 20.07.16 08:38:07 by FireTheLooser Reply

    Assistant coach
     
  • @FireTheLooser (Comment 8) : Not, I was observing the “support first, politics later” request, still am.

  • Comment 10, posted at 20.07.16 08:39:20 by Salmonoid the Subtle Reply
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  • @Salmonoid the Subtle (Comment 10) : All of these revelations is why I feel it’s best for the Sharks to be playing their quarter final in NZ….away from all these distractions.

  • Comment 11, posted at 20.07.16 08:41:01 by FireTheLooser Reply

    Assistant coach
     
  • @FireTheLooser (Comment 9) : No, I leave those shenanigans to the pro’s in the Sharks media dept. :twisted:

  • Comment 12, posted at 20.07.16 08:42:08 by Salmonoid the Subtle Reply
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  • Well at least Supersport deemed the Sharks worthy of investing another R40mil!!! If all was bad then surely they would not have invested more money into a “sinking ship”?!?!?!

  • Comment 13, posted at 20.07.16 08:42:24 by JD Reply
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  • @FireTheLooser (Comment 11) : Fully agree. Go Sharks.

  • Comment 14, posted at 20.07.16 08:43:10 by Salmonoid the Subtle Reply
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  • @JD (Comment 13) : Maybe they are trying to protect (save) their initial investment – Im sure that this investment has come with a few strict conditions.

  • Comment 15, posted at 20.07.16 08:45:18 by Salmonoid the Subtle Reply
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  • @Salmonoid the Subtle (Comment 12) : It is pretty bad that elements at the Sharks stooped to that level….even sadder that a strong rot still erodes this team we love.

    Oh well, onto the next CEO tasked with eliminating the rot and to lead the Sharks into an era of professionalism.

  • Comment 16, posted at 20.07.16 08:45:23 by FireTheLooser Reply

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  • @Salmonoid the Subtle (Comment 5) : @FireTheLooser (Comment 9) : maybe you did not write the article but just maybe you pestered Rob into writing it!!! Or why the quick denial?!?!?! ;-)

  • Comment 17, posted at 20.07.16 08:45:41 by JD Reply
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  • @Salmonoid the Subtle (Comment 15) : ja could be and if was into speculation I could have suggested that maybe it could be the reason that JS resigned and a proven businessman (GT) will in all likelihood be taking over as CEO but I’m not so I will never post such a suggestion.

  • Comment 18, posted at 20.07.16 08:49:52 by JD Reply
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  • @JD (Comment 17) : Rob wrote the article because solid information is coming to light and big moves are happening. My article on Monday said I wan’t going to get into rumour-mongering, not that I wasn’t going to report on facts.

    Trust me – when the new CEO is unveiled this morning, I WILL report on it :razz: :razz:

  • Comment 19, posted at 20.07.16 08:53:05 by robdylan Reply
    Competition Winner Administrator
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  • @JD (Comment 18) : I’m starting to wonder how much of the rot starts and stops with the amateur side of the Sharks ( McKenzie and whoever serves with him – seems to be the common denominator during both BvZ and JS ‘ reign as ceo)

  • Comment 20, posted at 20.07.16 08:58:52 by FireTheLooser Reply

    Assistant coach
     
  • @FireTheLooser (Comment 20) : if Teichmann is our new ceo, will you be my friend?

  • Comment 21, posted at 20.07.16 09:08:28 by West Indies Cricket Board Reply
    Friend of Sharksworld
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  • @robdylan (Comment 19) : I know you will!!!! That’s why all of us is herebecquse we get facts rather than the fiction that’s written as facts!!!

  • Comment 22, posted at 20.07.16 09:13:18 by JD Reply
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  • @FireTheLooser (Comment 20) : don’t know but i really hope the new CEO can put a stop to it all!!!!

  • Comment 23, posted at 20.07.16 09:14:09 by JD Reply
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  • @West Indies Cricket Board (Comment 21) : Anybody that shares my love for the Sharks, is my friend – I suppose Teichman’s appointment will make for a generally far happier extended Sharks family….seems to be respected by everyone – something Smit struggled to get throughout his playing and CEO career….either way, it’s onwards and upwards.

  • Comment 24, posted at 20.07.16 09:16:53 by FireTheLooser Reply

    Assistant coach
     
  • @JD (Comment 17) : Nah, nobody is going to pester Rob into writing something he doesnt want to and I have honestly been observing the “rugby politics later” request.

  • Comment 25, posted at 20.07.16 09:25:35 by Salmonoid the Subtle Reply
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  • @FireTheLooser (Comment 24) : JS, the best Sharks captain to have never won anything for the Sharks….

  • Comment 26, posted at 20.07.16 09:26:02 by Uli Boelie Reply
    Valued Sharksworld Supporter
    Uli BoelieTeam captain
     
  • Interesting to note that 9% = R 40,000,000. So to buy the sharks we’ll need about R 444,000,000. Who has some extra cash lying around?

  • Comment 27, posted at 20.07.16 09:28:05 by Dragnipur Reply
    Friend of Sharksworld Author
    DragnipurSuper Rugby player
     
  • I hear you brother

  • Comment 28, posted at 20.07.16 09:32:02 by West Indies Cricket Board Reply
    Friend of Sharksworld
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  • @West Indies Cricket Board (Comment 28) : privateers should be able to own the teams like in France. It works We are not communists. Just imagine if Rupert owned WP, Saad the Sharks and Motsepe the Bulls. It would become a pissing contest and Boudjellal can go fly a kite

  • Comment 29, posted at 20.07.16 09:42:38 by West Indies Cricket Board Reply
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  • @Dragnipur (Comment 27) :Steven Saad

  • Comment 30, posted at 20.07.16 09:58:08 by The hound Reply
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  • @Salmonoid the Subtle (Comment 25) : hahaha ja I know was just teasing a bit. :-)

  • Comment 31, posted at 20.07.16 10:35:02 by JD Reply
    Friend of SharksworldCompetition Winner Administrator
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  • @The hound (Comment 30) : Marco Wentzel….would that not be Karma?

  • Comment 32, posted at 20.07.16 11:06:37 by Kabouter Reply

    KabouterCurrie Cup player
     
  • Can anyone explain what SS is actually buying.
    In terms of control, there is no difference between a 51/49 and a 60/40 split.
    What does SS get for their R40m?

  • Comment 33, posted at 20.07.16 13:58:13 by fyndraai Reply
    Friend of Sharksworld
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  • @fyndraai (Comment 33) : a slightly bigger tax right off

  • Comment 34, posted at 20.07.16 13:59:29 by West Indies Cricket Board Reply
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  • @West Indies Cricket Board (Comment 34) : Nope that investment is not a tax write off. @fyndraai (Comment 33) : Voting rights is pretty much all they get together with a bigger share of any dividend declared. But basically its a good faith investment to protect their initial investment.

  • Comment 35, posted at 20.07.16 14:04:13 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 35) : i mean the losses. Lol

  • Comment 36, posted at 20.07.16 14:13:12 by West Indies Cricket Board Reply
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  • @West Indies Cricket Board (Comment 36) : Nope they dont get to deduct the losses for tax purposes, only the Sharks Pty Ltd can do that.

  • Comment 37, posted at 20.07.16 14:22:02 by SheldonK Reply

    SheldonKAssistant coach
     
  • @fyndraai (Comment 33) : @SheldonK (Comment 35) : @West Indies Cricket Board (Comment 34) : ja for now basically all they get is more say (if the Sharks agree with them) and after 2019 once the Sharks are profitable again they could get dividends.
    In future the Sharks shares could be worth more so that can make profit by selling their shares and the most important think they get is all Sharks supporters can’t (for at least the next couple of years) complain about how shit SS is as they gave the Sharks R40mil!!!!

  • Comment 38, posted at 20.07.16 15:03:25 by JD Reply
    Friend of SharksworldCompetition Winner Administrator
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  • Bittersweet: Clearly SS still see value here, but just as clear that there are real financial problems in Durban.

  • Comment 39, posted at 20.07.16 15:14:16 by Big Fish Reply
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  • @Big Fish (Comment 39) : Perhaps the more worrysome is that with 49% now they cant buy more shares really so should this cash injection not get the desired turnaround…then what?

  • Comment 40, posted at 20.07.16 15:19:35 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 40) : then at least we have a friend (Supersport) in our lifeboat unlike Kings that’s drowning on their own. ;-)

  • Comment 41, posted at 20.07.16 15:29:30 by JD Reply
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  • @JD (Comment 41) : Well hope they know how to paddle :)

  • Comment 42, posted at 20.07.16 15:36:30 by SheldonK Reply

    SheldonKAssistant coach
     
  • Do they pay dividends? Surely that would be the dumbest thing to do. Profits should always go towards building a beter team.

  • Comment 43, posted at 20.07.16 16:00:35 by fyndraai Reply
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  • Shares are like a currency of which the company is the issuer. They can always create more.

    If they need more money they could simply double the amount of existing shares and sell half of it to SS and the other half to KZNRU in exchange for the SR rights.

    They could also buy back the shares from SS for R1 and issue new shares to a new investor for RxxM.

  • Comment 44, posted at 20.07.16 16:05:08 by fyndraai Reply
    Friend of Sharksworld
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  • @fyndraai (Comment 43) : Supersport arent investing to get a warm fuzzy feeling, they want a return. I doubt many dividends have been paid of late though.

  • Comment 45, posted at 20.07.16 16:06:14 by SheldonK Reply

    SheldonKAssistant coach
     
  • KZNRU could liquidate Sharks Pty Ltd and sell 49% shares in a new entity called The Sharks Pty Ltd.

  • Comment 46, posted at 20.07.16 16:08:46 by fyndraai Reply
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  • @SheldonK (Comment 45) :
    I doubt any dividends have ever been paid.

    These “investments” are just sponsorships by a different name.

  • Comment 47, posted at 20.07.16 16:17:28 by fyndraai Reply
    Friend of Sharksworld
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  • @fyndraai (Comment 47) : I doubt they are for nothing but just a feel good factor.

  • Comment 48, posted at 20.07.16 16:27:11 by SheldonK Reply

    SheldonKAssistant coach
     
  • Could also be for influence peddling.
    Selling access to govt officials attending games.

  • Comment 49, posted at 20.07.16 16:37:45 by fyndraai Reply
    Friend of Sharksworld
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  • @fyndraai (Comment 49) : Supersport makes a large part of their income from mainly rugby supporters having to shell out for Premium DStv subscriptions. In order to sustain that they need a product to sell – hence investing in the professional arms of some of the bigger unions.

  • Comment 50, posted at 20.07.16 16:59:30 by Bokhoring Reply
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  • @Bokhoring (Comment 50) :

    Broadcast rights are not sold by the unions.

  • Comment 51, posted at 20.07.16 17:12:09 by fyndraai Reply
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  • @fyndraai (Comment 47) :
    That’s my understanding too.

    @fyndraai (Comment 51) :
    I think he means in the sense of ensuring that the state of the rugby teams is relatively healthy.

  • Comment 52, posted at 20.07.16 19:21:55 by Big Fish Reply
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  • @Big Fish (Comment 52) :

    Okay.
    That makes sense as an investment then.
    I think I was too cynical.

  • Comment 53, posted at 21.07.16 01:43:18 by fyndraai Reply
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  • @fyndraai (Comment 47) : @Big Fish (Comment 52) : Sponsorship is just giving money to someone without getting something tangible back. This is an investment that can be sold (if they can find someone willing that’s allowed to buy these shares) so potentially they could get their R40mil back.

  • Comment 54, posted at 21.07.16 07:52:15 by JD Reply
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  • @Bokhoring (Comment 50) : Which other Unions does Supersport have a stake in? And do you know if those investments are as large as the one in the Sharks?

  • Comment 55, posted at 21.07.16 08:09:11 by SheldonK Reply

    SheldonKAssistant coach
     
  • @fyndraai (Comment 51) : Broadcasting rights is how SANZAAR makes its money – I am talking about investing in the product that makes many of your premium subscribers stick with DStv, and don’t run off to Netflix.

    @SheldonK (Comment 55) : Not sure if they have stakes in other rugby franchises. They obviously own Supersport FC for probably similar reasons in the soccer market.

  • Comment 56, posted at 21.07.16 09:02:36 by Bokhoring Reply
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  • @Bokhoring (Comment 56) : Ah ok, yeh i knew about Supersport United. Just didnt know about any other rugby unions so was curious. Also wonder what they getting from their investment.

  • Comment 57, posted at 21.07.16 09:37:02 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 57) : I tried to do some quick research, but unfortunately the CIPC web-site is nothing like Companies House in the UK.

  • Comment 58, posted at 21.07.16 09:47:57 by Bokhoring Reply
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  • @Bokhoring (Comment 58) : haha if you going to try navigate through the CIPC i suggest some strong coffee and a stressball haha

  • Comment 59, posted at 21.07.16 10:03:25 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 59) : Gave up after 30 seconds, and then had a strong coffee

  • Comment 60, posted at 21.07.16 10:04:50 by Bokhoring Reply
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  • @Bokhoring (Comment 58) : Reason i wonder what Supersport get out of their investment is because it is not widely known that they invest in the Sharks. Ask anyone on the street who sponsors the Sharks and they will tell you Cell C, well some will say Mr Price but thats besides the point. So its not brand awareness and association that Supersport get out of it.

  • Comment 61, posted at 21.07.16 10:05:22 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 61) : I knew about Gumede and the Lions, SAIL having involvement in some rugby unions, but it was also news to me about the Supersport stake in the Sharks.

    Can’t be for pure investing reasons either.

  • Comment 62, posted at 21.07.16 10:12:20 by Bokhoring Reply
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  • @fyndraai (Comment 47) : @SheldonK (Comment 61) : Looks like there may have been a concern over dividends:

    “It is understood TV giants SuperSport, a 40 percent partner in the Sharks, is concerned about dwindling dividends from Kings Park and have approached Teichmann to do a rescue job.”

    http://www.iol.co.za/sport/rugby/teich-could-save-the-sharks-2046304

    The artilce is by Mike Greenaway, who does not seem to be SW’s favourite son at the moment but it’s probably still notworthy that there are suggestions being made regarding dividends.

  • Comment 63, posted at 21.07.16 11:15:04 by vanmartin Reply
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  • @vanmartin (Comment 63) : chasing dividends is a risky business and hopefully Teich wont be driven by this. Just look at African Bank recently where shareholders chased dividends and screwed the company royally.

    Trusting that Teich will do the right things based on his business performance

  • Comment 64, posted at 21.07.16 11:34:38 by Kabouter Reply

    KabouterCurrie Cup player
     
  • @vanmartin (Comment 63) : Ah ok cool, thanks. Had a feeling it was something like that.

  • Comment 65, posted at 21.07.16 11:36:22 by SheldonK Reply

    SheldonKAssistant coach
     
  • @vanmartin (Comment 63) : Am I correct in assuming the Sharks have mostly made losses over the past few years? If so, it would not have been a good idea to pay any dividends – which would have diminished the cash reserves even further.

  • Comment 66, posted at 21.07.16 11:44:55 by Bokhoring Reply
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  • @Bokhoring (Comment 66) : With the losses i doubt whether any dividends were paid. This possibly only adds to the pressure on Teichman to turn things around.

  • Comment 67, posted at 21.07.16 11:48:08 by SheldonK Reply

    SheldonKAssistant coach
     
  • @SheldonK (Comment 67) : I was just wondering about the “dwindling dividends” – does not sound like any dividends were paid?

  • Comment 68, posted at 21.07.16 11:49:01 by Bokhoring Reply
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  • @Bokhoring (Comment 68) : Hard to read much into the wording…remember latest financials havnt been released to give a clear indication. But my assumption is that with the Sharks incurring losses the dividend policy pretty much dried up in recent times. The most concerning aspect of what Saad said yesterday is that revenues have steadily increased during John Smits tenure but owing to a number of external factors expenses have increased exponentially…that is worrying

  • Comment 69, posted at 21.07.16 11:57:06 by SheldonK Reply

    SheldonKAssistant coach
     
  • @Bokhoring (Comment 66) : Unfortunately I can offer no further insight I’m afraid. The article may be based on hearsay for all I know. Just thought it was worth mentioning at the very least.

  • Comment 70, posted at 21.07.16 13:07:20 by vanmartin Reply
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  • @SheldonK (Comment 69) : Saad seemed to be talking about player wages – keeping quality players when Europe and Japan throws millions at them.

    Those costs would have wiped any increased revenues.

  • Comment 71, posted at 21.07.16 15:37:50 by FireTheLooser Reply

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  • @FireTheLooser (Comment 71) : Yeh he was saying that was the main cause for increased expenses. Which is why i cant see any high profile guys coming in for next year.

  • Comment 72, posted at 21.07.16 15:39:50 by SheldonK Reply

    SheldonKAssistant coach
     
  • Are the financials for any of these rugby teams ever made public? Any links?

    It would be interesting to see something concrete. The press only seem to trade in hearsay and rumors.

  • Comment 73, posted at 21.07.16 16:18:36 by fyndraai Reply
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  • @fyndraai (Comment 73) : Think most if not all are Pty Ltds so probably not public knowledge no.

  • Comment 74, posted at 21.07.16 16:20:59 by SheldonK Reply

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