(Bloomberg) -- South African Rugby Union members rejected a bid from Ackerley Sports Group LLC for a stake in the commercial rights to the world’s highest-ranked national rugby team shortly after a rival proposal was made public.
Saru, which oversees the national team, planned to sell a 20% stake in a newly created commercial-rights company for $75 million to Seattle-based Ackerley. Seven of the organization’s 13 member unions with voting rights opposed the deal in a vote Friday, with the proposal failing to get the 75% majority required approval it needed, the body said in a statement.
A separate group comprising AltVest Capital, EasyEquities, 27four and RainFin is offering $375 million for a stake of between 20% and 40% in the commercial rights of the team known as the Springboks, it said in a proposal on AltVest’s website.
This will ensure Saru “retains strategic control while gaining the financial resources and expertize to elevate the Springbok brand on the global stage,” it said.
Business Day newsspaper reported on the rival bid earlier Friday.
Ackerley, which Saru identified as the preferred bidder in December 2023, has an exclusivity period until the end of this year that enables it to make a revised offer should it wish to, the governing body said.
The rejection of Ackerley’s bid comes days after Saru executives told lawmakers the organization faces the risk of collapse if fails to bolster revenue and bucks a growing trend among national federations of successful rugby teams — most notably, New Zealand’s All Blacks — to raise funds from private equity.
Saru, which supports all levels of the sport nationwide, has barely turned a profit for more than a decade and hoped the deal would help to stabilize its finances, create a reserve fund and capitalize on the success of a team whose commercial income lags its biggest rivals.
The deal caused controversy and a string of front-page headlines, with the prospect of looser local control over a team whose success and multiracial makeup has turned the one-time icon of White supremacy under apartheid into a symbol of transformation.
The country’s sports minister and the unions that run some of its biggest rugby teams, which are linked to a number of the nation’s richest men, queried the benefits of the deal and the lack of South African participation.
Saru has tried to clinch a private equity deal since 2018. Its executives told lawmakers this week it generates about 90% of its revenue from the Springboks brand and franchise competitions.
Almost half of the national team’s matches are played overseas and South Africa’s weak currency puts it at a disadvantage when competing against rivals and makes it difficult to retain top players that are lured by lucrative contracts abroad, they said.
Rugby unions that run clubs linked to South Africa’s richest man, Johann Rupert — as well as Patrice Motsepe, the country’s only Black billionaire and pharmaceutical tycoon Stephen Saad — were among Saru’s member associations that signed a letter in October opposing the deal amid concerns over its fee structure, governance and ethics.
--With assistance from Antony Sguazzin and Janice Kew.
(Updates with more on the alternative proposal in the fourth paragraph.)
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