Saracens put up for sale - South African investors want to pull out with club losing millions a year.

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Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by Artful_Dodger on Tue 03 Apr 2018, 12:19 am

It has been reported in The Times newspaper that Saracens are being sold due to large financial losses. The South African investors who own 50% of the club are apparently pulling out.

https://www.thetimes.co.uk/article/saracens-put-up-for-sale-3n9p7xxhf





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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by Heaf on Tue 03 Apr 2018, 12:45 am

Inaccuracies in the article however - LI are not up for sale - the owners are looking for additional investment, not a sale. Might change of course with the moves rumoured around relegation/promotion.

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Post by Pot Hale on Tue 03 Apr 2018, 1:41 am

Times Article:


The future stability of the leading club in English rugby has been thrown into question after the South Africans who own 50 per cent of Saracens told The Times that they want to sell their stake in the club.

Saracens have been England’s top club in recent seasons. In a poor year for English teams in Europe, they were the last side left in the Champions Cup until they were knocked out by Leinster in the quarter-finals on Sunday. The success of the English club model will come under further scrutiny as Saracens join a number of others either up for sale or seeking investment.

Eleven of the 12 Premiership clubs operated at a loss last year, with Exeter Chiefs the exception. Saracens recorded losses of £2.74 million, which was a considerable improvement on previous years. Other clubs for sale, such as London Irish and Worcester Warriors, have struggled to find buyers.

Nigel Wray, the chairman and owner of the other 50 per cent of Saracens, said that his co-owners’ decision to sell will have no immediate effect as he can step in to buy them out. However, Wray is looking to the longer term and wants to persuade other investors to come forward because he cannot indefinitely be the club’s sole financial foundation.

The South Africans’ arrival at Saracens ten years ago triggered the most successful period in the club’s history. The north London side have won the Premiership three times since 2010-11 and were European champions for the past two seasons.

The investment was led by Johann Rupert, a businessman rated by Forbes, the business magazine, as the third wealthiest man in Africa with a net worth of $6.9 billion (about £4.9 billion).

The investment caused controversy due to the large number of South Africans who joined the club. Rupert wanted the ownership to provide a home for South Africans wishing to play abroad and yet maintain their links with the Springboks. However, the players who came tended, instead, to be cut off from the Springbok system. Therefore, for two reasons, the original justification for the investment no longer holds: because the number of South Africans has dwindled and because of the continuing operating losses.

When Rupert walks away, he will be writing off debts of about £25 million. However, it was not personal debts that have persuaded him to sell. The 50 per cent share is not owned by him but by a public company, Remgro, of which he is chairman and a 7 per cent shareholder.

“Remgro is a public company,” Rupert said. “Is it therefore right to support a rugby club? One should not be using public shareholders’ money for your own loves.”

The club management has always been more closely operated by Wray. “The club is really Nigel’s baby and everyone knows that,” Rupert said.

It therefore seems to make sense for Wray to buy back the 50 per cent that he sold to Remgro ten years ago. The South Africans may retain a smaller stake, though Wray has indicated that he could go back up to a short-term holding of 100 per cent.

The club are looking for two backers. One would be a property investor to help to finance the rebuilding of the west stand at Allianz Park, the club’s ground in north London. The intention is that the new west stand will generate its own income, some of which would offset the club’s losses.

That would make it a more attractive investment for a second (or more) investor(s). The Saracens ownership comes under the name of a holding company, Premier Team Holdings, whose losses in the past four financial years were £5.31 million, £3.99 million, £3.27 million and £2.74 million. The intention, with money generated by the new west stand, is that the losses will shrink to the point where the club will start to break even.

The question for Saracens is therefore twofold: will they be able to find a new buyer? And, until they do, is Wray happy to continue covering the losses required to keep a squad that can compete at the top of the game together? For now at least, Wray insists that he will stand by the club that he has done so much to build.
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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by mikey_dragon on Tue 03 Apr 2018, 3:05 am

Yeah kinda misleading title seeing as Nigel Wray can afford 100% of the upkeep, although he would prefer someone else to take it off his hands (sensible). There is no guarantee that someone will step in however, and Nigel won't be around forever. Weren't a lot of us slated for saying the English model isn't sustainable when they were all gloating about being on top? The Irish and NZ models are the way to go - that said I still don't think France and England need it as there will always be enough money men to support a handful of their 12-14 teams, which will also provide England with enough players.

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by yappysnap on Tue 03 Apr 2018, 6:49 am

Interesting to see how all this pans out. Seems like a lot of things are in flux at the moment especially in the English game.

But remember that success is often cyclical, Irish clubs have been all conquering in the past and dropped off, there's nothing to say that won't happen again in Europe.


What worries me more about the English game isn't the money or players but the coaching. It really feels like there are a heck of a lot of sub standard coaches in the Prem.

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Post by formerly known as Sam on Tue 03 Apr 2018, 8:46 am

Agree with the concern over coaches Yappysnap. There's a few coming through but not really breaking into first teams with any success. Instead we're seeing some old boys like Gaffney and Solomons come and do poor jobs on big money.

I think the AP clubs who are reliant on a large benefactor were always under threat. Those clubs backed by fans and a number of shareholders are always in a better position. The RFU have missed to boat in taking control of the English game and could in no way support 12 clubs.

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Post by BamBam on Tue 03 Apr 2018, 9:21 am

Would be a great time to re open the salary cap investigation now Nigel may be lacking the funding to bully everyone else

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by Heaf on Tue 03 Apr 2018, 10:08 am

Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

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Post by Brendan on Tue 03 Apr 2018, 10:17 am

I hear the SRU would have money if he is interested boxing

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Post by stub on Tue 03 Apr 2018, 10:23 am

Heaf wrote:Inaccuracies in the article however - LI are not up for sale - the owners are looking for additional investment, not a sale.  Might change of course with the moves rumoured around relegation/promotion.

As I understand it Worcester are also looking for further investment rather than being up for sale....

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Post by carpet baboon on Tue 03 Apr 2018, 10:43 am

Interesting reaction on twitter to this news.
Quite a few saying you don't get nto rugby to make a profit.
Does that mean Exeter are doing it wrong?

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Post by beshocked on Tue 03 Apr 2018, 10:50 am

Nigel Wray is so invested in Saracens - the biggest danger if he pulls out though the likelihood of that is currently low.

People don't quite realise what Nigel Wray has. Allianz Park is in his home territory - it's near his and Nick Leslau's old school.

You say Nigel Wray won't be around forever but Nigel Wray has a son and daughter who are involved in Saracens almost as much as Nigel himself.


I personally never saw Johann Rupert at a Saracens game, lost count of the amount of times, Nigel Wray has been.

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Post by stub on Tue 03 Apr 2018, 10:53 am

Interesting times, I can’t see Saracens struggling to attract the investment they need though. I think a few factors have hit home at the same time which are perhaps making things look a bit bleaker than they really are. In my opinion the English players are clearly tired and do need to be managed better and this has been accentuated by resurgent and impressive Irish, Welsh and Scottish sides. Therefore I think that lessons need to be learnt from this situation and implemented as quickly as possible within the constraints of the structure that we are working with. Finances are obviously part of the problem - could the RFU financially encourage improved player management? Also ring fencing, even if temporary, could lead to better stability and more financial certainly for some clubs. I know there’s an agreement in place until 2020 so how about expanding the Premiership over the next 2 years (no relegation only promotion) bringing it up to 14? The championship would be exciting for those years whilst the premiership could build...

Just musing out loud really and looking forward to seeing how the English structure evolves to meet the obvious challenges it faces. I’m sure that solutions will be found and necessary improvements will be made. I’m hopeful that these changes will protect smaller teams like Worcester and give aspirational championship teams a possible route in.

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Post by TJ on Tue 03 Apr 2018, 12:27 pm

Its not "investment" when what you are doing is subsidising deficit funding ie covering the difference between income and expenditure. Investment has a return. Putting money into rugby clubs so they can outspend their rivals does not

Personally I believe this should be banned otherwise rugby teams become toys for rich men and clubs who cannot attract one and have to live within their means cannot compete

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by BamBam on Tue 03 Apr 2018, 12:40 pm

Nige has retaken 100% control and is looking for investment apparently, rather than Saracens being "for sale"


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Post by carpet baboon on Tue 03 Apr 2018, 12:45 pm

So 50% of Saracens was sold to Nigel. So half of the club was for sale?

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by BamBam on Tue 03 Apr 2018, 12:49 pm

Trust me, I'm no fan of Saracens or that idiot Wray

Just think the headline doesn't quite marry up to what is actually happening

A far less sexy but more accurate headline would be - Muppet buys out his business partner, and seeks future investment

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by beshocked on Tue 03 Apr 2018, 12:53 pm

No, Nigel and Nick Leslau had 49% - it's just now the South Africans are selling to make Nigel Wray majority shareholder again.

Nigel as chairman has always been the main spokesman.

If I was CEO of Saracens I'd look to improve the fan experience. I enjoyed my time going to games at Sarries but there's still a lot of work that needs to be done.

Surely someone has to try and improve attendances, get away support up etc.

It will ease the financial burden to boost sales and fan satisfaction.

It's not rocket science.


Bambam you might not like Nigel Wray but he's no idiot.

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Post by BamBam on Tue 03 Apr 2018, 1:08 pm

Is tw4t more accurate?

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Post by No 7&1/2 on Tue 03 Apr 2018, 1:19 pm

What don't saracens do that others do to increase fan experience?

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Post by LondonTiger on Tue 03 Apr 2018, 1:30 pm

No 7&1/2 wrote:What don't saracens do that other do to increase fab experience?

Saracen's seem to try a lot harder to make the matchday experience enjoyable than say Leicester do, so not sure. Now of course with Leicester they have the crowds and they have the stadia, so much of what they do is to try and keep people happy. Being tee-total for the last 15 years or so it does not affect me, but the beer queues do annoy people at WR.

There are some issues that Saracens have to overcome to improve the match day experience:

1) The stadium is poor and needs to be improved. (Arguably the players are affected more than the fans with the changing rooms still being portakabins)
2) It is a long walk to the ground from nearest parking/transport through housing estates (ie limited pubs etc)
3) It is Barnet.

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Post by LondonTiger on Tue 03 Apr 2018, 1:38 pm

beshocked wrote:
Surely someone has to try and improve attendances, get away support up etc.

It will ease the financial burden to boost sales and fan satisfaction.

Need to develop the ground first, which costs. Saracens have played 7 matches at Allianz this season so far with total ticket sales of just over 67k equating to 96% of total capacity.

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Post by Recwatcher16 on Tue 03 Apr 2018, 2:12 pm

Saracens costs are dominated by having to pay/invest for their stadium. Not sure folk appreciate what an achievement that is in North London - £30M ground with a 10k capacity.
To give some context Tottenham, 7 miles east have spent a reputed £800M for a 61k capacity. That is not entirely a like for like comparison but it certainly gives a good indication.

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by RugbyFan100 on Tue 03 Apr 2018, 3:15 pm

Heaf wrote:Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

What do you mean they can't afford the losses? Where has this been reported?

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Post by GeordieFalcon on Tue 03 Apr 2018, 3:44 pm

Maybe they could stay within the wage cap.... Whistle

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Post by BamBam on Tue 03 Apr 2018, 3:44 pm

GF, don't you know there's no proof and its very rude to accuse Saracens of such a thing?

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Post by GeordieFalcon on Tue 03 Apr 2018, 4:18 pm

Yahoo

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Post by yappysnap on Tue 03 Apr 2018, 8:24 pm

Interesting that for the first time in quite a while Gloucester haven't made a profit. They used to always be the club that broke even at least.

I've been to Allianz and tbh thought it was ok, just really empty. Difficult to have a good experience when it's only maybe half full.

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by Heaf on Tue 03 Apr 2018, 10:17 pm

RugbyFan100 wrote:
Heaf wrote:Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

What do you mean they can't afford the losses? Where has this been reported?

Maybe I paraphrased it badly ...

“Remgro is a public company,” Rupert said. “Is it therefore right to support a rugby club? One should not be using public shareholders’ money for your own loves.”

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Re: Saracens put up for sale - South African investors want to pull out with club losing millions a year.

Post by RugbyFan100 on Wed 04 Apr 2018, 9:42 am

Heaf wrote:
RugbyFan100 wrote:
Heaf wrote:Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

What do you mean they can't afford the losses? Where has this been reported?

Maybe I paraphrased it badly ...

“Remgro is a public company,” Rupert said. “Is it therefore right to support a rugby club? One should not be using public shareholders’ money for your own loves.”

I'm still struggling to see where Saracens "can't afford the losses".

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Post by Pot Hale on Wed 04 Apr 2018, 11:41 am

RugbyFan100 wrote:
Heaf wrote:
RugbyFan100 wrote:
Heaf wrote:Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

What do you mean they can't afford the losses? Where has this been reported?

Maybe I paraphrased it badly ...

“Remgro is a public company,” Rupert said. “Is it therefore right to support a rugby club? One should not be using public shareholders’ money for your own loves.”

I'm still struggling to see where Saracens "can't afford the losses".

Because one of the shareholders decided enough was enough, perhaps? Wray seems determined to keep ploughing on with his intent to buy back the Remgro shares, and hopefully bring in other investors around the new stand. Time will tell if that can happen and if it does, whether it will be sufficient to match his claim of being in the black within 2-3 years.
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Post by RugbyFan100 on Wed 04 Apr 2018, 11:47 am

Pot Hale wrote:
RugbyFan100 wrote:
Heaf wrote:
RugbyFan100 wrote:
Heaf wrote:Also ironic that Sarries pushed for the higher cap and now they decide they can't afford the losses ...

What do you mean they can't afford the losses? Where has this been reported?

Maybe I paraphrased it badly ...

“Remgro is a public company,” Rupert said. “Is it therefore right to support a rugby club? One should not be using public shareholders’ money for your own loves.”

I'm still struggling to see where Saracens "can't afford the losses".

Because one of the shareholders decided enough was enough, perhaps?   Wray seems determined to keep ploughing on with his intent to buy back the Remgro shares, and hopefully bring in other investors around the new stand.   Time will tell if that can happen and if it does, whether it will be sufficient to match his claim of being in the black within 2-3 years.  

But Wray is now 100% owner. He's covering all losses. So how are they not affording the losses?


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Post by No 7&1/2 on Wed 04 Apr 2018, 11:49 am

Just reword it to read there's a heavy implication that continued losses have resulted in a major shareholder leaving and saracens will now be seeking alternative investment.

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Post by stub on Wed 04 Apr 2018, 12:04 pm

No 7&1/2 wrote:Just reword it to read there's a heavy implication that continued losses have resulted in a major shareholder leaving and saracens will now be seeking alternative investment.

Hasn't got quite the same sensationalist ring to it though, has it?

True though!

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Post by LondonTiger on Wed 04 Apr 2018, 12:57 pm

stub wrote:
No 7&1/2 wrote:Just reword it to read there's a heavy implication that continued losses have resulted in a major shareholder leaving and saracens will now be seeking alternative investment.

Hasn't got quite the same sensationalist ring to it though, has it?

True though!

And Wray is surely only looking for alternative investors to help take some of the burden of his shoulders - certainly implying he does not want to keep covering all the losses.

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