Cape Town – WP Rugby’s application for provisional liquidation of their professional arm, confirmed on Monday, serves as a countrywide reminder of deepening woe in the South African game.
If one of the most traditional powerhouses of domestic rugby – in performance, spectator appeal and once also of financial wellbeing – can land up in such desperate status, what price the stability in a bleak economic climate and challenging sporting landscape of the other, often smaller unions?
There has already been the embarrassment this year of one of the six South African-based Super Rugby franchises, the Kings, finding themselves in a multi-dimensional mess; a vulnerable playing squad intended for the 2016 campaign shrank further before the season even started with an exodus of players who either weren’t being paid or feared for their futures in the fold.
The Kings are still a relatively fledgling entity, of course: Western Province, by contrast, are a long-time domestic juggernaut and “bedrock” union, and despite the brave spin put on the liquidation application by WPRFU president Thelo Wakefield at a hastily-convened media briefing on Monday, observers would be entitled to surmise that if they can go belly-up, any other union could potentially follow suit.
Wakefield, speaking with a novel chutzpah considering the circumstances -- and revealing that it was also his birthday -- said liquidation was in WP Rugby (Pty) Ltd’s “best interests” after all alternative options had been weighed up.
It had been a tough decision – “the toughest ever at Newlands”.
The liquidation would not, he assured, impact on the (professional) players in the short-term and all sponsorship agreements would continue to be honoured.
There was a certain Churchillian triumphalism, too, in the way he swung things around to make it sound as though a bright future was around the corner, despite the negative message WP Rugby’s more immediate decision will almost automatically send to the all-important marketplace.
A turnaround strategy would kick in instantly, and it was “very exciting”; WP Rugby would emerge more robust, and under “sound new business structures” (possibly begging the obvious question of just why present ones had bombed).
The larger-than-life Wakefield also wasn’t slow, it seemed, to indirectly sell Rob Wagner, a former colleague in high office at the stadium and the long-serving prior chief executive who retired in late summer, down the river.
Without even any question having been directed yet on that score by the assembled media, he said: “You might ask me how much … the previous CEO may be to blame for the situation. All I want to say to you on this matter is the following: we now have a CEO (Paul Zacks) with extensive experience in business, a proven record.”
In fairness to both Wakefield and Wagner, a rising damp in WP Rugby’s coffers – as exclusively revealed by Sport24 recently, a loss of around R11-million for the year has already been projected by the Board -- had been discernible before their respective elevations to berths of major responsibility at the union.
As far back as 2007, the combined pro and amateur divisions of WP Rugby declared a combined loss of more than R12-million, just a year and a half after reporting cash reserves in excess of R40-m, and there has been a progressive selling off of assets for well over a decade in a quest to give the books a veneer of stability.
Reacting to Monday’s liquidation announcement, Keith Andrews, former WP and Springbok tighthead prop and director of financial solutions firm Personal Trust, told me: “This sends out a fairly disturbing message countrywide … as the oldest union in the country, it should also be one of the strongest.
“Many of our unions must be in trouble. Only a few months ago, remember that Brian van Zyl (Sharks CEO from 1994 to 2013) warned of them also crashing from a sound footing to technical insolvency.
“Whatever they may say, this is a drastic step at Newlands. Despite the assurances given, the players are sure to be worried – they get paid by the professional arm.
“What actually happens to the contracted players? My understanding is that if you get liquidated, everything gets frozen … liquidators first have to assess (the finances).”
Andrews said the financial ructions at several SA franchises would only hasten the exodus of quality players to more stable contracts abroad.
“Guys will be even more tempted, without a doubt, to contemplate futures overseas, knowing that the local model is wrong, that proper business principles and expertise apply at clubs in Ireland, England, France and elsewhere.”
WP Rugby’s latest, quite tremulous move is a stark reminder that problems in South African rugby run deeper than just uncertainty over the national team’s game-plan …
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