Tony McKeever is nothing if not persistent. The guy at the forefront of the Southern Spears fight against SA Rugby (nose84), is back on the warpath: hes determined to force SA Rugby to pay up what is rightfully owed (or some of it), and see Spears back where they belong on the field.
To recap: After SA Rugby, under new president Oregan Hoskins, stopped financial assistance to the Spears, reneged on a deal to get them into the Super 14, and excluded Spears from the 2006 Currie Cup, Spears, led by McKeever, took SA Rugby to court.
But when Judge Dennis Davis held that the agreement was binding and left it to the parties to sort the matter out, SA Rugby simply threw more money at the problem. When mean tricks didnt work, they persuaded Spears to go into voluntary liquidation. SA Rugbys victory came at a cost McKeever reckons theyve spent some R8m trying to kill off the Spears. And it aint over yet!
But the wily McKeever has a couple of smart new stratagems.
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Firstly, in October, he lodged a formal complaint with the Competition Commission. His basis for this move is the argument that with SA Rugby and the five franchises being run by commercial companies, the Competition Commission has jurisdiction over them, just as it has over any big business.
McKeevers charging that, under its new presidency, SA Rugby and the five major franchises have collaborated, colluded and conspired as a cartel to financially suppress, subdue and deliberately prevent the Southern Spears from competing in the 2006 Currie Cup and 2007 and 2008 Super 14 competitions.
They did this, says McKeever, by depriving the Southern Spears of assets granted to it by the 2005 agreement, namely three years of rugby fixtures; they also terminated financial support for Southern Spears just three months into a 12-month agreed period.
McKeever argues that, as the Competition Commission has imposed fines of R100m against SAA and R692m against Mittal Steel, why shouldnt it fine SA Rugby R40m being 10% of its annual turnover of R400m?
In addition, the big five franchises could collectively be fined an amount of some R30m. And the various parties might still be required to make reparations to the Southern Spears.
This could be disastrous for SA Rugby says McKeever, because its reserves have inexplicably dropped from R45m four years ago to R18m today (this doesnt take into account any windfall from last years World Cup, which McKeever thinks could be in the order of R43m), whereas the administration budget has shot up from some R30m per annum to some R80m.
So McKeever is suggesting instead that a settlement be reached, where SA Rugby is fined just 5%, some R20m. Of this, R3,7m could be used to get the Spears out of liquidation, and the balance towards preparing for a Super 14 season.
McKeever certainly seems to have done his homework. An interesting feature of the case is that Dennis Davis is now president of the Competition Appeal Court.
Easily applying the language of competition law to the world of rugby, McKeever argues that competition law is designed to promote and maintain competition within SA, with the aims inter alia of:
- Promoting the efficiency, adaptability and development of the economy in this case Southern Spears attracting commercial sponsorship and generating significant revenues in the Eastern Cape.
- Providing consumers with competitive prices and product choices Southern Spears becoming a Super 14 Rugby franchise in the Eastern Cape, where no franchise has existed before.
- Promoting employment and advancing the social and economic welfare of South Africans Southern Spears offering close to 50% of registered rugby players in South Africa the chance to play for a franchise in their own area.
Expanding opportunities for South African participation in world markets and recognising the role of foreign competition in South Africa allowing the Southern Spears to host foreign Super 14 teams. - Ensuring that small and medium-sized enterprises have an equitable opportunity to participate in the SA economy Southern Spears being granted rights to develop a franchise in the Eastern Cape.
- Promoting a greater spread of ownership, and in particular the ownership stakes of historically disadvantaged people Southern Spears would clearly promote such ownership possibilities.
McKeever further claims that SA Rugby is abusing a dominant position, and points out that SA Rugby enjoys market power as defined by the law, namely the power to exclude competition or to behave to an appreciable extent independently of its competitors.
He says its unlawful for a dominant firm like SA Rugby to refuse to give a competitor like Southern Spears access to an essential facility when it is economically feasible to give such access. SA Rugby is also engaging in exclusionary acts, for example by requiring Southern Spears three member companies to abandon a court order, and by refusing to supply Spears with scarce goods, in this case finance.
McKeevers second approach has a political theme. Since Jake White was told Thanks mate but now piss off!, its been apparent that SA Rugbys version of transformation two darkies out on the wing will no longer cut it.
On 2 January 2008 McKeever wrote an open letter to the SA Rugby presidents council (in anticipation of its 9 January meeting at which Peter de Villiers was announced as the new Springbok coach without mention that hed coached Spears for eight months) and copied it to the minister of sport and the Competition Commission.
The emotional letter reminds the council that, in terms of clause 1 of the SA Rugby constitution, it is required to ensure that rugby is played, administered and promoted on a non-racial, non-political and democratic basis, and that all persons, irrespective of race, colour, creed or gender, should have the right in whatever capacity to participate in the game of rugby.
McKeever goes on to tell those members of the 19-member council who arent completely in the loop, like deputy-president and likely next president Mike Stofile, that a group of six individuals at SA Rugby has waged a clandestine campaign against Southern Spears, in concert with SA Rugbys legal counsel De Klerk & van Gend (erstwhile attorneys to ex-president PW Botha no less), a firm which generally costs SA Rugby over R6m per annum, and has cost it some R8m on this issue alone.
He claims that this group of six has recklessly exposed SA Rugby and the five franchises to paying penalties of over R70m. McKeever singles out SA Rugby president Oregan Hoskins, vice president Koos Basson, SA Rugby (Pty) Ltd CEO Jonathan Stones, SA Rugby Union CEO Johan Prinsloo, chief financial officer Basil Haddad, and general manager of legal affairs Christo Ferreira.
McKeever describes their conduct as a repeated failure to comply with, and a systematic contravention of, the SA Rugby Constitution and a display of gross negligence and mala fides. He calls on the council, on behalf of over 200 000 rugby players in the Eastern Cape, and supporters around South Africa, to either hold rugby as an example of sportsmanship, transparency and transformation or to continue along the path of discrimination and exclusionary acts as has been the case with Spears.
It is, warns McKeever, inconceivable that the Eastern Cape rugby, business and legal communities, as well as the national authorities would stand idly by and permit the pillaging of the Southern Spears by a monopolistic body, SA Rugby, and the collusive cartel made up of the other five Super 14 franchises.
Once again McKeever proposes a solution one that should go down like a lead balloon in Jozi. His suggestion is that Southern Spears should play in the 2008 Super 14 season. The Lions (the last-placed South African team for the past two years) should stand down and become a junior partner of the promoted Southern Spears, with 50% of home games being played at Ellis Park and a 50/50 revenue split between the franchises on Ellis Park revenue (McKeever claims this concession will alleviate the economic isolation suffered by the relegated side). Up to eight Lions players can be drafted into the Southern Spears squad. The new Springbok coach should assist the Southern Spears with its preparations, which will have the added advantage of getting the national coach directly involved with Super 14 and therefore with all of South Africas top players. SA Rugby will be responsible for finding sponsorship for the Southern Spears, and in return, the Southern Spears will drop all its claims against SA Rugby. Was McKeevers letter discussed at the 9 January meeting? Who knows. SA Rugby simply wont talk.