WP rugby to call CT stadium home

2019-11-12 06:01
Cape Town Stadium (File)

Cape Town Stadium (File)

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The official announcement about two weeks ago that Cape Town Stadium is foreseen to become the new home of Western Province Rugby (WPR) by 2021 has raised several questions.

But, as rugby fans have come to expect, WPR is playing its cards close to the chest.

In an email to People’s Post, WPR group CEO Paul Zacks says that although the City of Cape Town has approved a binding heads of agreement with WPR – which will make it the primary anchor tenant of the stadium – the parties next have to work on the technical aspects which will be captured in the primary anchor tenant agreement.

“Our negotiations with the City have not been concluded as yet. As soon as this happens, we’d be more than happy to answer questions,” says Zacks.

He went on to say that WPR was of the view that a detailed story at this stage would be premature.

“We can say that we are enormously encouraged by the potential move, which will not only yield benefits for the stadium, but also our players, and critically, for our fans,” says Zacks.

One of the biggest questions is the fate of Newlands rugby stadium (“Stadium’s future in the balance”, People’s Post, 29 October).

The Rugby Rocks website reported WPR had entered into an agreement with Investec that would see the asset management group given development rights to the Newlands stadium from 2021. It has been reported (“Newlands demolition likely, but timeline uncertain”, Sport 24, 7 October) that Investec plans to build residential and retail properties on the site. Neither WPR nor Investec has confirmed these reports.

Former South African rugby union player David “Divan” Serfontein says although he has not been privy to the reported deal between WPR and Investec, it is probably the only reason why the union can afford to move to the Cape Town stadium.

“WPR is bankrupt, everybody knows that. Newlands rugby stadium is its last huge asset. When I played for them years ago, they were financially strong, but somewhere along the line, the money disappeared. When that happens bad management is usually to blame,” says Serfontein.

He says the R110 million payment from Investec to WPR, if media reports are to be believed, won’t go far.

“The union will be left with only half that after it settles its 2016 bail-out debt with Remgro (a Stellenbosch-based investment holding company). That’s nothing; it will only cover players’ contracts for one to two years,” Serfontein says.

It has been reported that Investec will take on the development on a 99-year lease and that WPR will receive a percentage share in all profits that accrue from the development.

“I don’t know the final details (of the deal), but I think Investec walked away with the biggest bargain of a lifetime. For WPR, the prospect that it could receive a share in the development’s profits for the next 99 years must be attractive. If that is the case it will be fantastic. That translates into a steady income every year,” he says.

“What we don’t know is when Investec plans to start development. It may not happen for the next 10 years. Potentially, money will flow in; we just don’t know when.”

In the meantime, WPR will likely remain in the red. “Even if it moves to the moon, the union will still be in trouble. Newlands rugby stadium was its property. Now, as the anchor tenant at Cape Town stadium, it will have to pay rent. It is also more expensive to host games there. I can’t see how WPR will be able to generate enough money to keep going,” says Serfontein.

He is also not convinced that Cape Town stadium is the best choice.

“I admit, I am sentimental when it comes to Newlands rugby stadium. And, yes, the Cape Town stadium is big and modern, but it is not a rugby stadium. Spectators sit far away from the rugby field.”

Serfontein says although Cape Town stadium is suited to international rugby games, like the World Rugby Sevens Series, it is not ideal for provincial competitions like Super Rugby. “Attendance figures have declined substantially in the past few seasons. Only a quarter of the Cape Town stadium will be filled when it’s not Sevens.”

If all goes to plan, WPR will become the primary anchor tenant of the Stadium, potentially for the next 99 years, from 1 February 2021.

In the statement released on Friday 1 November, Zacks said the City and WPR have agreed on a mutually beneficial revenue sharing model whereby WPR would have preferential access to play all of its senior professional rugby matches at the stadium. He said the parties had also agreed to the construction of additional suites at the stadium.

The City said the agreement did not affect continued guaranteed community access to the stadium and that it would remain a host for all sporting codes and events. The City would also retain responsibility for repairs and maintenance and the operational costs of the stadium.

The official announcement about two weeks ago that Cape Town Stadium is foreseen to become the new home of Western Province Rugby (WPR) by 2021 has raised several questions.

But, as rugby fans have come to expect, WPR is playing its cards close to the chest.

In an email to People’s Post, WPR group CEO Paul Zacks says that although the City of Cape Town has approved a binding heads of agreement with WPR – which will make it the primary anchor tenant of the stadium – the parties next have to work on the technical aspects which will be captured in the primary anchor tenant agreement.

“Our negotiations with the City have not been concluded as yet. As soon as this happens, we’d be more than happy to answer questions,” says Zacks.

He went on to say that WPR was of the view that a detailed story at this stage would be premature.

“We can say that we are enormously encouraged by the potential move, which will not only yield benefits for the stadium, but also our players, and critically, for our fans,” says Zacks.

One of the biggest questions is the fate of Newlands rugby stadium (“Stadium’s future in the balance”, People’s Post, 29 October).

The Rugby Rocks website reported WPR had entered into an agreement with Investec that would see the asset management group given development rights to the Newlands stadium from 2021. It has been reported (“Newlands demolition likely, but timeline uncertain”, Sport 24, 7 October) that Investec plans to build residential and retail properties on the site. Neither WPR nor Investec has confirmed these reports.

Former South African rugby union player David “Divan” Serfontein says although he has not been privy to the reported deal between WPR and Investec, it is probably the only reason why the union can afford to move to the Cape Town stadium.

“WPR is bankrupt, everybody knows that. Newlands rugby stadium is its last huge asset. When I played for them years ago, they were financially strong, but somewhere along the line, the money disappeared. When that happens bad management is usually to blame,” says Serfontein.

He says the R110 million payment from Investec to WPR, if media reports are to be believed, won’t go far.

“The union will be left with only half that after it settles its 2016 bail-out debt with Remgro (a Stellenbosch-based investment holding company). That’s nothing; it will only cover players’ contracts for one to two years,” Serfontein says.

It has been reported that Investec will take on the development on a 99-year lease and that WPR will receive a percentage share in all profits that accrue from the development.

“I don’t know the final details (of the deal), but I think Investec walked away with the biggest bargain of a lifetime. For WPR, the prospect that it could receive a share in the development’s profits for the next 99 years must be attractive. If that is the case it will be fantastic. That translates into a steady income every year,” he says.

“What we don’t know is when Investec plans to start development. It may not happen for the next 10 years. Potentially, money will flow in; we just don’t know when.”

In the meantime, WPR will likely remain in the red. “Even if it moves to the moon, the union will still be in trouble. Newlands rugby stadium was its property. Now, as the anchor tenant at Cape Town stadium, it will have to pay rent. It is also more expensive to host games there. I can’t see how WPR will be able to generate enough money to keep going,” says Serfontein.

He is also not convinced that Cape Town stadium is the best choice.

“I admit, I am sentimental when it comes to Newlands rugby stadium. And, yes, the Cape Town stadium is big and modern, but it is not a rugby stadium. Spectators sit far away from the rugby field.”

Serfontein says although Cape Town stadium is suited to international rugby games, like the World Rugby Sevens Series, it is not ideal for provincial competitions like Super Rugby. “Attendance figures have declined substantially in the past few seasons. Only a quarter of the Cape Town stadium will be filled when it’s not Sevens.”

If all goes to plan, WPR will become the primary anchor tenant of the Stadium, potentially for the next 99 years, from 1 February 2021.

In the statement released on Friday 1 November, Zacks said the City and WPR have agreed on a mutually beneficial revenue sharing model whereby WPR would have preferential access to play all of its senior professional rugby matches at the stadium. He said the parties had also agreed to the construction of additional suites at the stadium.

The City said the agreement did not affect continued guaranteed community access to the stadium and that it would remain a host for all sporting codes and events. The City would also retain responsibility for repairs and maintenance and the operational costs of the stadium.

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