Western Province Rugby’s financial meltdown continues as it applies for bankruptcy. At a board meeting in July, WP Rugby (Pty) Ltd announced it would make a loss of R11.2 million for the year. That was expected to worsen if Aerios, a company that sells sports sponsorship rights, was successful in legal action that it instituted against them. Aerios is claiming more than R72m from WP Rugby, after a dispute over the sponsorship contract between WP Rugby and headline sponsor DHL which happened without the consent of Aerios, the holder of the commercial rights of the union. Efforts to mend bridges with Aerios have failed, and now WP Rugby has taken the extreme step of applying for provisional liquidation. – David O’Sullivan
From Sport24
In the biggest financial crisis to rock Western Province rugby in recent history, president Thelo Wakefield has placed all of his faith in CEO Paul Zacks to turn things around.
Wakefield hosted an emergency press conference at Newlands on Monday in which he confirmed that WP Rugby (Pty) Ltd had an application for provisional liquidation granted.
Wakefield confirmed that an ongoing legal battle with commercial partner Aerios was a major contributing factor in the liquidation application.
Sport24 reported last month that Aerios were seeking R72 million in payment from Western Province.
The decision was taken after Wakefield had consulted with legal experts, and the president confirmed that other options including negotiation, arbitration and business rescue had been considered.
Wakefield said that Zacks had attempted to mend the relationship with Aerios, but that those attempts had failed.
“I am satisfied in my mind that we’ve done everything in the book to cement relationships between WP and Aerios,” Wakefield said.
“I’m satisfied that Paul Zacks has gone out of his way to strengthen the partnership between WP and Aerios, but unfortunately we did not succeed.
“I would like to stress the fact that we’re doing this in the best interests of Western Province Rugby.”
Read also:Â Western Province buy their own trophy as Currie Cup qualifiers lack sponsor, prize money
Wakefield was adamant that the running of the Union, including the Stormers Super Rugby side, would not be affected by this latest revelation.
Zacks was appointed as the new CEO of the Union in May after previous CEO Rob Wagner had stepped down in March.
And, on Monday, Wakefield publicly and firmly placed the responsibility of securing financial stability on Zacks’ shoulders.
“We now have a CEO with extensive experience in business and a proven record,” Wakefield said.
“In the short time that he has been with us he has already assisted in addressing key operational requirements that we have made.
“When Paul Zacks was appointed as CEO in May he immediately identified the financial difficulties that WP Rugby was facing and the potential pitfalls that some of the existing commercial contracts contained. It has now reached the point where the relationship with Aerios has broken down irretrievably and trust between the parties no longer exists.
“We’ve done our level best, as we would with any other business partner. We have made sustained efforts over the last few months.”
Western Province RFU confirmed that it had applied for, and obtained, an order for the provisional liquidation of Western Province Rugby
— EWN Sport (@EWNsport) November 7, 2016
Wakefield, unprompted, also responded to any hypothetical suggestions that Wagner and the previous board was to blame for the current financial crisis.
“You might also ask me about the involvement of the former CEO and how much the board of directors are to blame for this situation,” he said.
“All I want to say on this matter is that i have a very comprehensive CV of the new CEO of WP Rugby. You are free to collect a copy and read all about it and see what this man is up to.
“When we recruited the CEO we said we want a person that understands business. We found him in Paul Zacks. Paul will immediately start with a turnaround strategy, will have to develop new business models and also come and present his turnaround strategy to us.
“I can tell you that from my discussions with Paul … it seems very exciting. It’s now up to us to work with Paul Zacks side-by-side and to attain our vision to be the best rugby franchise in the world.
Thelo Wakefield: "I'd rather go bankrupt than privatise over 50%." Fiduciary duties of a Director? No wonder WP rugby in so much trouble!
— Graeme Joffe (@Joffersmyboy) November 7, 2016
“It is our endeavour to make the company financially strong and get financial stability as soon as possible. With the help of my colleague and with his expertise in the business world … I can assure you thought we won’t see the effects immediately, but we will come back to you.”
Wakefield said he was not in a position to discuss any of these turnaround strategies at this stage, but that November would be a “busy month”.
“We have to act. I acted today. There is no time to waste,” he said.
“We need to take Western Province to the next level and that’s what we’re going to do. There is no time to dwell on the past.” – Sport24
Source:Â http://www.sport24.co.za/Rugby/wp-crisis-wakefield-places-faith-in-ceo-zacks-20161108
