Remgro have conceded that their corporate image could be damaged if their quest to turn around ailing, crisis-torn Western Province Rugby fails, writes Rob Houwing, Sport24 chief writer
It also seems abundantly clear that their already substantial financial “rescue remedy” at Newlands, including payment of player and staff salaries in the period leading up to the controversial liquidation of the WP Rugby (Pty) Ltd professional arm late last year, will require significant increase if their resuscitation hopes are to be realised.
Remgro’s sometimes publicity-shy CEO Jannie Durand revealed to Sunday Times business journalist Chris Barron at the weekend (www.timeslive.co.za/sundaytimes/businesstimes/article2198390.ece) that the investment holding company – chaired by multibillionaire Johann Rupert – intends becoming “much more closely” involved in the management of WP Rugby.
It currently has a 24.9 percent stake in it, but this will rocket to a more crucial 74 percent when, as expected fairly imminently, the South African Rugby Union constitution is altered to facilitate majority private ownership.
Remgro, according to Durand, has analysed “mistakes made … we know where the problems lie (in WP Rugby)”, and that there is a sound business rationale above any emotional reason for their investment at Newlands.
He said it was critical to “appoint the best management team” at WP Rugby, saying it was their “biggest job”.
“I wouldn’t call it a pleasurable diversion if you look at the amount of airtime this thing has got … from a reputational side it’s important we get this right.”
What boardroom steps Remgro take in their turnaround drive remain to be seen – Durand has admitted they “were involved” with the appointment of UCT business science graduate Paul Zacks as CEO in place of long-serving Rob Wagner last year – but he also hinted that the coaching situation (Robbie Fleck is about to start his second year as chief coach of headline team the Stormers in Super Rugby) would be addressed.
“It’s about getting closely involved … appointing the right coaches and so forth. We’re going to look at everything. I don’t mind a foreign coach at all.
“I think you can say we’ve had the courage to invest in WP Rugby and come to their rescue; hopefully we can do that.
“Obviously we need to fill the stadium, we need to sell more tickets … what sells more tickets is a winning team. WP Rugby made some good money in the past so there’s no reason it can’t happen again.”
Reading between the lines, Durand’s motivations suggests a potentially shrewd, conscious business decision to buy the proverbial “shares while they are down”.
Remgro also owns 50 percent of English Premiership club Saracens, an association stretching back some eight years when the north London outfit were well less than a consistent powerhouse.
Saracens have since won the Premiership three times, as well as being current holders of the European Champions Cup.
WP are in the relative doldrums domestically, with the Stormers yet to win Super Rugby or even reach the final since 2010, and in a tough fixture draw this year as they must tackle the five New Zealand teams in ordinary season.
In addition, their cash problems have almost certainly impacted on the eroding depth of their personnel base — key backline player Cheslin Kolbe, 23, one of relatively few thrill-factor elements to their mix, is just the latest to confirm his plans to play in France (for Toulouse) after a final crack at Super Rugby this year.
Recent “signings”, if anything, only remind of the present poverty in buying power; most have been of players not even proven yet in the heavily-diluted modern Currie Cup, let alone proven customers in the hurly-burly of Super Rugby.
If Remgro are to genuinely help engineer a return to glory days at ageing Newlands – or perhaps Cape Town Stadium, a burning ongoing flashpoint in itself – their investment may have to be more fulsome than they even anticipate at this juncture.
Restoring bums to seats and selling more season tickets and vacant suites will require an immeasurably stronger squad down the line – the Stormers arguably last had the required sort of armoury for the gruelling annual slog four or five years back – if all-important winning is to become cultural at Newlands once more.
There are other minefields to be negotiated before the good times can roll anew: WP Rugby remains immersed in a complex, acrimonious dispute with Aerios, the partner at the centre of a major advertising rights dispute with them involving a claim of more than R70-million.
Aerios continue to oppose the liquidation of the professional arm, seeing it as a cynical bid by WP to absolve themselves of liabilities to them.
Long-suffering Stormers/WP supporters may begin to feel, nevertheless, following Durand’s template indications, that the process of reintroducing much-needed private business savvy to their headquarters has got underway …
*Follow our chief writer on Twitter: @RobHouwing