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
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
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
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
“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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