After a year of potentially disastrous decisions that have jeopardised the future of professional rugby in Cape Town, Western Province Rugby (WPR) is seeking to put distance between itself and the WP Rugby Football Union (WPRFU).

That means keeping the WPRFU and its president, Zelt Marais, out of crucial decisions. How that will be achieved is a mystery given the way the entire union operates.

Structurally, WPR was set up in 2016 after the previous company was liquidated following a complex legal case to free itself from a suffocating commercial partnership.

In theory, WPR and its board run professional rugby, employing coaches and players, making commercial deals involving WP, the Stormers and Newlands Stadium.

In an ideal world they would get on with the business of running professional rugby and the WPRFU would concentrate on amateur rugby and managing its property portfolio.

But in Cape Town the lines have always been blurred. The WPRFU is a 100% shareholder of WPR. Although WPR has a separate board and has the leeway to make commercial decisions that are in the best interests of the professional side of the game, that seldom happens in a vacuum.

The WPRFU has always meddled in WPR, but under Marais decisions taken by the WPRFU are starting to have a catastrophic impact on WPR and its ability to function as a going concern. 

Western Province celebrates Seabelo Senatla of Western Province’s try during the Currie Cup match between DHL Western Province and Phakisa Pumas at DHL Newlands Stadium on August 09, 2019 in Cape Town, South Africa. (Photo by Shaun Roy/Gallo Images)

In a carefully crafted response to whether Marais was shut out of company business, Rasool used his considerable political experience to make it sound amicable.

“Implicit in our commitment to separate the functions of the company and the union – the shareholder and the board – is to ensure that Mr Marais is not overburdened with responsibilities on both sides,” Rasool said. “He remains a valuable director on the board.

“In terms of governance stability and integrity, the board has undertaken to further separate the powers and functions of the union and the company.

“This will include a search and appointment of a new separate company CEO, which starts in January 2021, as well as the co-option to the board of Solly Moeng onto the management committee in order for independent board members to be predominant.

“Hopefully, once we have a new CEO in place the need for shareholder members from the union to be overactive on the operational side will fall away. He [Marais] will continue to conduct the enormous responsibilities that lay with the shareholder [WPRFU].” 

Separation of powers

Marais has been wearing two hats, as president of the union and a de facto chief executive of the company. And it’s been destabilising.

In the past year Marais has been at the forefront of decisions to walk away from a deal with Investec for the development rights to Newlands Stadium that was 18 months in the making.

He jilted Investec’s property division days before the deadline to sign the final contract and revealed the little-known Flyt Group as the WPRFU’s new development partner.

As part of the agreement, Flyt loaned the WPRFU R112-million to settle outstanding debts. The title deeds to 11 of the WPRFU’s properties were provided as security for the loan. Flyt paid the money over soon after the deal was consummated in the form of a contract.

Marais trumpeted at the time that “it is clear that this proposed deal is far less risky than previous arrangements [with Investec] as it not only allows the WPRFU significantly more control, but also due economic benefits as a 50% partner”.

Yet, fewer than six months on, Flyt has declared a dispute with the WPRFU which is trying to change the terms of a deal it sought and signed off on. The deal is on the brink of collapse, with Flyt seeking hundreds of millions in damages if the WPRFU does not stick to the terms of the contract.

“In my naivety when I joined I treaded onto things that were not in my jurisdiction and it’s not a mistake I would want to repeat,” Rasool said. “Flyt and MVM are primarily in the domain of the WPRFU, our shareholder, and we should leave it there.

“My job is to establish a separation of powers between the company and the union and vice versa. That is absolutely crucial. We have confidence that the WPRFU will act… in our collective best interests.

“Every turnaround has to have a beginning. Our board is determined to create the firewall between the two entities.”

Crumbling alliance

Rasool, a former ANC premier of the Western Cape, was brought into the fold by Marais earlier in 2020 as a strong ally. Within weeks Rasool was appointed chairperson of the board of directors at WPR, although the machinations that led to that outcome are still unclear.

Since Rasool’s arrival five directors either resigned or were pushed out, adding to the general malaise at the organisation.

While all this was happening the New York-based MVM consortium offered to buy an equity stake in WPR. MVM’s non-negotiable clause was having a controlling 51% stake in WPR. The deal could not be concluded because WPR, steered by Rasool and Marais, would not cede controlling power to an equity partner.

That was their prerogative as leadership of the organisation, but against a backdrop of staggering debt, player unhappiness, a potential legal case against Flyt and the prospect of losing its entire property portfolio in that confrontation, the recriminations are starting.

The relationship between Marais and Rasool, who were initially allies in taking WP in a new direction (which was never fully spelled out), has cooled. According to several sources the pair are locked in a power struggle at the union.

It was interesting that after an all-day board meeting on Saturday, WPR called a press conference to publicise its new vision for the future. Marais was not included in the briefing (which shouldn’t be unusual in itself as it was company business) but it was revealing.

“There will be an increased focus on sustained and meaningful engagement with players, staff, sponsors and the public,” Rasool said.

“The board will endeavour to ensure financial viability into the future by engaging positively with all stakeholders, thereby ensuring confidence and a shared understanding of our common objectives.”

Player security

One of the most pressing problems is that the senior players do not want to start contract renegotiations until the boardroom issues are resolved. At least, resolved enough to open dialogue.

“Off-the-field actions must be underpinned by sound governance and good leadership,” Rasool said. “It must be done while seeking to achieve the goal of sustaining a world-class rugby team, capable of at least being in the final of the Currie Cup next year, and a major contender for international competitions in the season after.

“Player happiness and security must be linked with financial accountability and sustainability, transparent governance, engagement with stakeholders, and goals of inclusive transformation.”

Stormers and WP coach John Dobson added: “We are enthused and excited by recent developments. We have had some tough times out there in the media, but as a playing group we know that we are blessed – due to the goodwill of shareholders and the board – with a world-class team. We have not been in the business of acquiring players from outside, but we want to retain what we have.

“We’ve engaged with every single player and all have indicated a desire to stay – and that’s a great reflection on the union and franchise. This strategy of the board will give enormous confidence to the players to retain their futures here.” DM