Guma, Lions fall out over ‘transformation’

The Guma group and the Golden Lions have parted ways. They say they could not agree overall direction on Guma’s shareholding, and as such they have agreed to dissolve their intended multi-million rand partnership.

Late on Tuesday, Guma issued this statement:

“Guma TAC confirmed they have withdrawn from the Lions transaction. We also confirm that Guma TAC has provided a detailed letter of withdrawal with several fundamental reasons to Golden Lions Rugby Union (GLRU).

“The proposed Guma TAC Lions transaction has been conditional to South Africa Rugby Union (SARU) approval.  This (SARU) approval came through on 9 June 2011.

“The driving force behind our investment has been the total transformation of Lions Rugby and South African rugby in general. We feel sad that our effort to bring same to the Lions has been rendered unsuccessful in spite of our effort.

“Guma TAC has always behaved in a professional and ethical manner when issues pertaining to the Lions were exposed in the media.  We felt it dignified not to comment. We believe it is the Lions who are in a better position to reveal the real reasons for our withdrawal.”

Those close to the deal say, and no one will go on the record as yet

• The relationship did not pan out as expected. Clearly.
• That the deal fell off due to bad-faith, separate negotiations to move the Golden Lions to Soccer City from its current post-apocalyptic site at Coca-Cola Park.

SportsCentral will continue to work on this story during the next 24 hours, but it would seem, based on off-the-record conversations with those close to the deal, that each party wanted a slice, independently, of the revenues that would flow from the move of the Golden Lions to Soccer City. In other words, Guma and the Lions were both trying to negotiate a move to Soccer City and gain a slice of the revenue independent of their partner.

Guma, a consortium between Robert Gumede and Ivor Ichikowitz, bought 49,9% of the Golden Lions with the stated aim of bringing more black fans to the game. The value of the transaction was never disclosed, but it was in the tens of millions of rand.

(See TechCentral article here: http://www.techcentral.co.za/it-billionaire-buys-into-lions-rugby/17770/)

Where this leaves the cash-challenged and playing-challenged Lions is hard to say. President Kevin de Klerk has tried to put a positive spin on the events: “Producing a trophy-winning Lions team remains our top priority, but there’s always a danger that you can throw the baby out with the bathwater, and our duty as a union is to promote and develop rugby at all levels in the Golden Lions region.”

De Klerk tried to stress that the dissolving of the arrangement would not have a negative impact on the team’s preparations for the ABSA Currie Cup and that the decision would free the union from the negotiating table to concentrate on their core responsibilities.

How they can pay the salaries of vastly inflated, head-high cowboys such as Butch James is another issue.

– We will follow this story to its inevitable conclusion. – Frank Heydenrych, SportsCentral