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Southern Kings go into voluntary liquidation

Howard Mnisi, Southern Kings

The future of Southern Kings, the struggling Guinness PRO14 franchise, has been plunged into further turmoil after the board of SA Rugby placed the insolvent company into voluntary liquidation to secure the longer-term financial future of rugby in Eastern Province.

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The Kings shareholders, the Eastern Province Rugby Union (EPRU) and SA Rugby, took the decision in the face of an accumulated deficit of R55m, and with zero income in prospect for the remainder of 2020.

“The hard fact is that the Kings are insolvent, with significant debts and zero assets and it would have been reckless of the board to continue to trade,” said board chairman Andre Rademan.

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“Its continuation would have required loans from the EPRU and loans additional to the R45m that the company already owes to SA Rugby. In the absence of any rugby in 2020, and without any guarantees as to income prospects for 2021, it would have been financially irresponsible of the shareholders to have pumped in further funding.”

Mark Alexander, SA Rugby president, added that extending additional credit to an insolvent entity at a time when the rugby industry is required to make a saving of R1.2bn to stay afloat this year was not an option.

The history of the Kings has been one of expectation and anticipation but unfortunately the parallel story of commercial failure couldn’t be wished away any longer,” he said. “The debts the organisation has accumulated over the years are considerable and in the current environment, the only certainty was that they would grow.

“The membership of SA Rugby has invested heavily in the Kings project but it is now time for a re-examination of what is the appropriate and sustainable pathway for rugby in the Eastern Province.”

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SA Rugby resumed ownership of a 74 per cent shareholding in the PRO14 Kings in June following the failure of the previous owners – the Greatest Rugby Company in the Whole Wide World (GRC) – to honour contractual commitments in relation to its purchase of the shares.

The GRC had acquired the shareholding in January 2019 but was unable to deliver on the promised turnaround strategy. The Kings’ struggle to build a sustainable business model had twice seen it fall into management control by SA Rugby.

Rademan said: “It’s time for the Eastern Province rugby community to consolidate and take stock. We have managed to put in firm foundations at the EPRU, after historic financial troubles, and we can look to build rugby in the region from that platform.

“It gives us the opportunity to re-focus on creating a business model that is sustainable and right for rugby in the Eastern Province. This is very difficult news to give to people and the board would not have wanted it this way. But sport is a business and we are in unprecedented times. There was no other option.”

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JW 22 minutes ago
'Passionate reunion of France and New Zealand shows Fabien Galthie is wrong to rest his stars'

Where? I remember saying "unders"? The LNR was formed by the FFR, if I said that in a way that meant the 'pro' side of the game didn't have an equal representation/say as the 'amateur' side (FFR remit) that was not my intent.


But also, as it is the governing body, it also has more responsibility. As long as WR looks at FFR as the running body for rugby in France, that 'power' will remain. If the LNR refuses to govern their clubs use of players to enable a request by FFR (from WR) to ensure it's players are able to compete in International rugby takes place they will simply remove their participation. If the players complain to the France's body, either of their health and safety concerns (through playing too many 'minutes' etc) or that they are not allowed to be part in matches of national interest, my understanding is action can be taken against the LNR like it could be any other body/business. I see where you're coming from now re EPCR and the shake up they gave it, yes, that wasn't meant to be a separate statement to say that FFR can threaten them with EPCR expulsion by itself, simply that it would be a strong repercussion for those teams to be removed (no one would want them after the above).


You keep bringing up these other things I cannot understand why. Again, do you think if the LNR were not acting responsibly they would be able to get away with whatever they want (the attitude of these posters saying "they pay the players")? You may deem what theyre doing currently as being irresponsible but most do not. Countries like New Zealand have not even complained about it because they've never had it different, never got things like windfall TV contracts from France, so they can't complain because theyre not missing out on anything. Sure, if the French kept doing things like withholding million dollar game payments, or causing millions of dollars of devaluation in rights, they these things I'm outlining would be taking place. That's not the case currently however, no one here really cares what the French do. It's upto them to sort themselves out if they're not happy. Now, that said, if they did make it obvious to World Rugby that they were never going to send the French side away (like they possibly did stating their intent to exclude 20 targeted players) in July, well then they would simply be given XV fixtures against tier 2 sides during that window and the FFR would need to do things like the 50/50 revenue split to get big teams visiting in Nov.

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