robdylan

SA Rugby GenCo ratifies sweeping changes


Written by Rob Otto (robdylan)

Posted in :Original Content, Springboks on 12 Dec 2016 at 11:32
Tagged with : ,

Yes, this headline is somewhat less inspiring than the alternate version I had in mind, “Turkeys vote for Christmas”, but the net effect is roughly equivalent. Credit must go to new SA Rugby President Mark Alexander for finding a way to drive through a raft of rather significant changes to the governance models of the game.

There is plenty of dust yet to settle and I’ll put my hand up and admit that I don’t yet fully understand the implications and significance of some of the decisions reached. There are some definite highlights, though, that are clear enough, including the following:

- potential recapitalisation of the professional game through a decision to allow private entities to take up to a 74% stake in provincial unions’ commercial arms.
- greater representation of independents on the Executive Council and an increase of the powers of that body (including appointment of the Bok coach)
- formation of a franchise committee to oversee decision-making relating to Super Rugby (thus removing non-franchise unions from meddling in those affairs)
- restructuring membership of the General Council to reduce the overall number of delegates and align with the country’s provincial boundaries. This means each of the nine provinces will send members to GenCo, rather than each of the 14 unions.

All-in-all, it really sounds like some killer blows have been struck in the quest to take management of the game out of the hands of amateur administrators – with those representing smaller unions often holding disproportionate power.

Here is the full set of decisions, as worded in the SA Rugby media release:

· Permitting 74% shareholdings in commercial arms of rugby unions by private equity partners
· Increasing the make-up of the independent and player representation on the Executive Council to five independents with six elected members
· Introducing new committees for franchise (Vodacom Super Rugby) and non-franchise rugby to focus and streamline decision making
· Moving responsibility for the appointment of the Springbok coach and CEO from the General Council to the Executive Council
· Removing the selection committee while retaining a selection convenor to work with national team coaches
· Aligning with the country’s geopolitical boundaries by moving to nine members of SA Rugby, while retaining 14 playing unions
· Reducing the presidential roles from three to two by removing the vice presidency from 2018



49 Comments

  • Really hoping that some positive change results from these decisions.

  • Comment 1, posted at 12.12.16 12:53:52 by vanmartin Reply
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  • Still no comments!! Was hoping people more in the know about the unions etc would add their thoughts here. As far as I can tell this all sounds good so far.

  • Comment 2, posted at 12.12.16 12:54:29 by Hulk Reply

    HulkSuper Rugby player
     
  • The potential for increased privatisation is an interesting move indeed. Will be interesting to see which companies jump on board.

  • Comment 3, posted at 12.12.16 13:07:58 by SheldonK Reply

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  • @SheldonK (Comment 3) : Sounds like Supersport are going to own more of the Sharks soon.

  • Comment 4, posted at 12.12.16 13:15:46 by Hulk Reply

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  • @Hulk (Comment 4) : Supersport as a private owner is bad for rugby in general. Expect Ticket prices and DSTV to increase the more ownership they have over teams.

  • Comment 5, posted at 12.12.16 13:31:15 by Uli Boelie Reply
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  • @Hulk (Comment 4) : Yeh it will be interesting to see if they opt to increase their shareholding to that extent..which would mean them wanting more board representation and i wonder if it could mean the end of Teichmans reign. Business is SA isnt exactly thriving though so dont think many companies will be quick to splash the cash. Wonder if we will see any foreigners become interested.

  • Comment 6, posted at 12.12.16 13:35:00 by SheldonK Reply

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  • I think the real win here is the hobbling of the General Council.

  • Comment 7, posted at 12.12.16 13:51:51 by robdylan Reply
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  • @robdylan (Comment 7) : Curious to see how this will work- Aligning with the country’s geopolitical boundaries by moving to nine members of SA Rugby, while retaining 14 playing unions

  • Comment 8, posted at 12.12.16 13:53:33 by SheldonK Reply

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  • @SheldonK (Comment 8) : ja must say can’t see how that’s going to work just quick look at how it will work:
    Limpopo – None
    North West – Leopards
    Gauteng – Bulls, Lions & Valke
    Mpumalanga – Pumas
    KZN – Sharks
    Free State – Cheetahs & Griffons
    Northern Cape – Griekwas
    Western Cape – WP, Boland & Eagles
    Eastern Cape – Border & Kings
    Can’t see a great power shift with this. 4 Provinces will be controlled by smaller unions sending all the delegates. Only 1 province will be controlled by large union. Lions and Bulls will have to negotiate to get control over Gauteng and Cheetahs will have to split control with Griffons. Potentially if Boland and Eagles decided to stand together WP could lose all say in SA rugby!? Also Limpopo will have no representative as there’s no teams based there!?
    Some interesting times ahead!?!?!?

  • Comment 9, posted at 12.12.16 20:42:39 by JD Reply
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  • I strongly believe the increased private ownership is very long overdue, and in fact 74% is not enough, there should be no limit on private ownership. This should have happened with the beginning of professionalism in 1995/1996. I just can not see a single Government entity in the world who could successfully run a professional sports franchise. Professional sports is a money maker if managed correctly. Of course the next step is to introduce reasonable salary caps either for the entire franchise or for individual players. I also think that a good look at the baseball minor league structure in the US. Each SuperRugby franchise would have a partner in one of the smaller unions. Fringe players would be contracted and paid by the smaller union until they were needed by the SR franchise who would have license to bring any player from the partner union into their SR squad (at a base pre-determined salary). This way SR franchises would not have a need to contract massive squads in which many players get very little game time. Overall salaries for the franchises would decrease as they would have access to players from their partner union, who would be match fit if needed by the SR franchise. Personally I think these changes are in the absolutely correct direction, and I sincerely hope they follow through. This, if the follow through is done correctly, can save SA Rugby.

  • Comment 10, posted at 12.12.16 22:15:19 by Dancing Bear Reply
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  • @JD (Comment 9) : Yeh certainly is going to be interesting. Limpopo have the Limpopo Blue Bulls

  • Comment 11, posted at 13.12.16 09:32:48 by SheldonK Reply

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  • @Dancing Bear (Comment 10) : Very good comment. Only problem i see is the egos of the players and administrators. Players straight out of school believe they superstars and want massive contracts with only the big teams and super rugby gametime. Same with administrators wanting the limelight. Having said that i do like your thinking.

  • Comment 12, posted at 13.12.16 09:35:10 by SheldonK Reply

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  • @SheldonK (Comment 11) : Sub-union of the Blue Bulls so Bulls will probably control it. WP is in real danger of being voted out by SWD and Boland.

    Previously the SR unions had 6/14 members, now they can have 4 or 5/9 or even 6/9

    Anyway, the GC will have limited power over the SR franchises with the main power being with the franchise committee

  • Comment 13, posted at 13.12.16 10:02:42 by Baylion Reply

    BaylionSuper Rugby player
     
  • @JD (Comment 9) : Limpopo is part of the Bulls region, so I would imagine the Bulls would have strong influence there and send their delegates under that “flag”

  • Comment 14, posted at 13.12.16 10:03:55 by robdylan Reply
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  • @Baylion (Comment 13) : @robdylan (Comment 14) : I definitely foresee some interesting times ahead, depending on the decision making power and influence able to be exerted by the 9 Provincial delegates. I mean does the vote held by Griquas as the Northern Cape rep hold the same weighting as the Gauteng vote where both the Lions and Bulls unions are based.

  • Comment 15, posted at 13.12.16 10:11:14 by SheldonK Reply

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  • Also interesting to see what possible corporates will take up the now allowed 74% stake.
    WP- Remgro?
    Sharks- Supersport?
    Bulls- Vodacom?
    Lions- Emirates?
    Cheetahs- Toyota?
    EP Kings- ??

    And if a major corporate player takes over say the Pumas…would there be pressure then to allocate them one of the super rugby franchise spots available?

  • Comment 16, posted at 13.12.16 10:14:21 by SheldonK Reply

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  • @JD (Comment 9) : @robdylan (Comment 14) : I don’t understand why delegates are being used in plural form for a particular province. Surely each province gets to send only one representative to the General Council or is it multiple representatives (per province) but only one vote between them?

  • Comment 17, posted at 13.12.16 10:18:12 by vanmartin Reply
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  • @SheldonK (Comment 16) : Vodacom is a sponsor of the Bulls, not a shareholder and neither is Toyota (Cheetahs) and Emirates (Lions). SuperSport owns about 25% of the Cheetahs while I’m not sure how much Altmann Allers (and a consortium of businessmen, I think) holds in the Lions, if any

  • Comment 18, posted at 13.12.16 10:29:26 by Baylion Reply

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  • @vanmartin (Comment 17) : The unions have 2 representatives at the moment

  • Comment 19, posted at 13.12.16 10:30:02 by Baylion Reply

    BaylionSuper Rugby player
     
  • @Baylion (Comment 18) : Yeh i know they sponsors only currently but with the change in ownership clause would these sponsors want a bigger piece of the pie?

  • Comment 20, posted at 13.12.16 10:31:32 by SheldonK Reply

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  • @SheldonK (Comment 20) : Sponsors pay for advertising/marketing and probably won’t go for a more permanent investment where they actually get relatively little exposure – Supersport has the S on the Sharks players’ jerseys

  • Comment 21, posted at 13.12.16 10:35:48 by Baylion Reply

    BaylionSuper Rugby player
     
  • @Baylion (Comment 21) : Taking that into account what would make private ownership attractive then? I mean yes the Unions would benefit and possibly be able to retain better players but with the Sponsors getting the actual exposure then what value to ownership then?

  • Comment 22, posted at 13.12.16 10:38:46 by SheldonK Reply

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  • @SheldonK (Comment 22) : @Baylion (Comment 21) : How does it work in Japan? Aren’t the owners also the sponsors there? So if my assumption is right as unions sponsorship deals require renewing perhaps we’ll see more of our unions bought by big corporations :idea:

  • Comment 23, posted at 13.12.16 12:07:43 by Hulk Reply

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  • @Hulk (Comment 23) : My understanding and I could be totally wrong is that the Japanese teams are factory teams belonging to huge manufacturers,Toyota,Sony etc.

  • Comment 24, posted at 13.12.16 12:16:52 by The hound Reply
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  • @Hulk (Comment 23) : @The hound (Comment 24) : can’t compare Japan to SA or other parts of the world. Japan have corporate clubs that’s wholly owned by the big corporation (eg Toyota, Toshiba, etc). They will not have any other major sponsors on the jerseys as it might look as if they don’t have enough say and money to make it on their own. Still a lot of pride and loyalty in Japanese culture.

  • Comment 25, posted at 13.12.16 12:19:53 by JD Reply
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  • @SheldonK (Comment 16) : Kings are sorted they are owned 100% by SARU.

  • Comment 26, posted at 13.12.16 12:20:40 by JD Reply
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  • @Hulk (Comment 23) : @The hound (Comment 24) : Yeh from my understanding there isnt separation there between ownership and sponsorship. In the EPL ownership and sponsorship is separated same as the English club rugby as far as i know. In France i think its a mix.

  • Comment 27, posted at 13.12.16 12:20:48 by SheldonK Reply

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  • @JD (Comment 26) : haha id love to see the SARU logo on the front of their jerseys then :mrgreen:

  • Comment 28, posted at 13.12.16 12:22:02 by SheldonK Reply

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  • So in that case what is the point of owning 74% of a union? What did Supersport get out of owning more of the Sharks recently?

  • Comment 29, posted at 13.12.16 12:27:38 by Hulk Reply

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  • @vanmartin (Comment 17) : ja, good point. I did wonder about that “s” after I typed it. Bear in mind though, that on the current General Council, you will have at least 2 delegates from each Union. I see they are scrapping Vice Presidents, though, so perhaps there will now only be 9 in total? Hard to be sure without more detail.

  • Comment 30, posted at 13.12.16 12:30:56 by robdylan Reply
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  • @SheldonK (Comment 22) : That’s a good question. I would also like more clarity as to what the larger percentage of private ownership actually means in terms of decision making withing the union. Do the private owners then get a say in anything regarding which players to sign or even to select seeing that it’s they will be contributing the majority of the money to get in or keep new players etc. ? Surely they’ll have some weight to throw around, but what are their boundaries?

  • Comment 31, posted at 13.12.16 12:43:23 by Quintin Reply

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  • @Quintin (Comment 31) : Look we must remember that ownership and decision making are separated. Its the appointed board that makes the decisions…the board being appointed by the owners. So with increased ownership there will be increased representation on the board which makes the decisions.

  • Comment 32, posted at 13.12.16 12:58:13 by SheldonK Reply

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  • @SheldonK (Comment 32) : Which in turn means there is an expected financial return, winning unions make money.

  • Comment 33, posted at 13.12.16 13:17:19 by Hulk Reply

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  • @SheldonK (Comment 32) : Yeah I’m not confusing the two, I’m trying to figure out how much the ownership will influence the decision making, be it directly or indirectly. The guys pumping money into an investment also has a vision of what they want to achieve with that investment.

    Will they decide on the goals they would like the union to achieve? For example, In 2017 you have to reach the semi-final of the SR, win the CC and show a profit increase of 8% ? And from there it’s up to the staff and structures currently within the union to try and reach those goals?

  • Comment 34, posted at 13.12.16 13:28:22 by Quintin Reply

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  • @Quintin (Comment 34) : I think we need to think of it like any other company as that is what professional sports teams are. So the owners will have specific goals for their appointed directors/members of the board. Those board members will then appoint personnel such as coaches etc and will also be given thee goals based on those handed down by the owners. This is nothing new however. It is the way pro sport should have been run in this country all along. However, SA had such a good amateur structure that when professionalism started they just carried on as they were which wasnt sustainable and are now having to play catchup

  • Comment 35, posted at 13.12.16 13:39:02 by SheldonK Reply

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  • Ownership only has meaning if one can expect an income stream (dividend) or capital gain (selling said asset for a profit).

    In SA rugby there has been, to the best of my knowledge, no instances of the above. As long as the key asset (right to stage rugby matches), remains in the hands of the Unions, buying shares in the PTY will be no different than a one off sponsorship payment.

  • Comment 36, posted at 13.12.16 17:46:14 by fyndraai Reply
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  • Up to now these “investments” in part ownership has been little more than social obligation and charity write-offs for the companies. I mean, what does Supersport gain from owning shares in the Griffons (I think)?

    With the changes on the cards, SARU is splitting the operations into professional rugby (franchises) and non- or semi-professional rugby (unions). Companies buy shares in the professional rugby side, the PTYs, and once they own enough shares they can have an actual say in the running of these professional units (and expect dividends to accrue).

    The prospect of this is that the franchises will become more professionally run and could eventually “split-off” from the unions where the union teams (amateurs, juniors, CC) are made up of amateurs and semi-professionals and the franchises are fully professional teams, which could for arguments sake, relocate to another city, like the American teams have done in the past

  • Comment 37, posted at 13.12.16 18:17:15 by Baylion Reply

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  • @SheldonK (Comment 12) : I understand what you are saying about player egos, and I actually think my suggestion would help with reducing that problem. Since there will be less slots available at SuperRugby franchises (they have a smaller partner union to place fringe and young players) all the ego in the world will mean nothing if there is not a space available at a franchise union. They will have to work their way up like all the others. Of course the egos of the administrators has to be dealt with, but I believe with private ownership, those egotistical administrators will have no place with the unions. The private owners will place strong people in those positions (based on good business decisions not ego and rugby playing ability in the past) and there will be no room for egotistical administrators unless they are excellent money makers for the union. All my opinion, and as I have said before, free and worth every penny! :mrgreen: :mrgreen:

  • Comment 38, posted at 13.12.16 18:17:59 by Dancing Bear Reply
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  • @SheldonK (Comment 28) : hahaha ja was sure they would have done it this year ;-)

  • Comment 39, posted at 13.12.16 19:26:54 by JD Reply
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  • @Dancing Bear (Comment 38) : I do like you idea of the smaller partner union much like the A, AA, AAA sides in the MLB setup. It also provides a clear career path for a player to become a professional and learn his trade through the levels so that he is a finished article by the time he reaches the Show as they call it. In each province/union or whatever there should be a defined path from school to university to semi pro side to super rugby side.

  • Comment 40, posted at 14.12.16 08:28:29 by SheldonK Reply

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  • @JD (Comment 39) : Or maybe just Mark Alexanders face on the front of the jersey…that would be epic haha

  • Comment 41, posted at 14.12.16 08:29:13 by SheldonK Reply

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  • @SheldonK (Comment 41) : hahaha ja or maybe our beloved minister of sports with his shades ;-)

  • Comment 42, posted at 14.12.16 13:58:04 by JD Reply
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  • @SheldonK (Comment 40) : Spot on, and with the smaller unions already in existence, you already have a ready made “minor league” structure in place, just need to arrange the partnership. I am not sure though that geography should be a factor in the partnership, I think each franchise should negotiate an arrangement with a partner union (could be any of the minor unions). This would mean the franchise will have to pump some funds into the smaller union, but since there will be fewer franchise player contracts, the remaining funds could be used to support the smaller union. This will also help cash strapped unions keep operating effectively.

  • Comment 43, posted at 14.12.16 15:02:22 by Dancing Bear Reply
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  • @Dancing Bear (Comment 43) : problem is that your suggestion requires logical thinking and well SARU. Bet yeh i like your thinking

  • Comment 44, posted at 14.12.16 15:35:53 by SheldonK Reply

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  • @Dancing Bear (Comment 43) : @SheldonK (Comment 44) : sorry to say but can’t see that ever happening as the voting power of SA rugby is with the teams you want to use as “feeder unions” and so basically they will have to vote themselves out of their nice little jobs! Way to much fun for these amateurs to play the part of professional rugby administrators and the pay is probably not to bad!

  • Comment 45, posted at 14.12.16 16:17:59 by JD Reply
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  • @JD (Comment 45) : Look I agree with you with regard to SA Rugby. Problem is if nobody is willing to think outside the box and simply slide along in their paradigmatic fashion, things will only get worse. I came up with my ideas not even considering the roadblocks within SA Rugby, and more people should do the same. The bottom line is if SA Rugby is to improve and once again become a force in world rugby LOTS OF THINGS must change. They have to drop the paradigms and completely change the way they are operating. I think the changes announced is a good start, but there is so much further to go. So while I agree that there is little chance SA Rugby will change to the level I suggest, I’m afraid that in a way seals the coffin on SA Rugby as a force in world rugby. So if we accept SA Rugby will simply not change, then we might as well get used to being a second or third tier rugby nation. Sorry to be so harsh, but it is the truth.

  • Comment 46, posted at 14.12.16 19:27:18 by Dancing Bear Reply
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  • Just today in my status meeting with my team/staff I had to shut some people down because they were saying “but this is how we have always done it.” That type of thinking stifles any sort of improvement or innovation.

  • Comment 47, posted at 14.12.16 19:28:37 by Dancing Bear Reply
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  • @Dancing Bear (Comment 46) : @Dancing Bear (Comment 47) : with you 100% I’m hoping that changes will be made to improve the situation in SA rugby but being a realist I’m sorry to say I can’t see a lot changing!

  • Comment 48, posted at 14.12.16 21:45:19 by JD Reply
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  • Here is a good article on the Minor League finances.\

    http://www.sportsbusinessdaily.com/Journal/Issues/2014/08/04/Franchises/Minor-league-teams.aspx

    The challenge in SA will be to get people to go and watch games in the smaller cities. Currently they don’t and it does not seem as if people in SA rugby concern themselves much with empty stadiums.

  • Comment 49, posted at 15.12.16 02:47:38 by fyndraai Reply
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