Aerios: The decline in 'value' of Newlands

By Jan de Koning

Monday 29 Jun 2020

SPOTLIGHT: In Part two of his chat with Aerios Chief Executive Costas Constantinou, Jan de Koning looks back at where it all started and what rights WP Rugby held.

At the heart of the dispute between Aerios and SA Rugby (or SARU) - and by extension, WP Rugby - is advertising and in-stadium broadcast rights.

There has been - and still is - the perception that the South African Rugby Union (also known as SA Rugby) holds all the broadcast rights.

These rights have been sold on, exclusively, to pay-TV station MultiChoice (DStv).

However, Constantinou disputes that and he feels that the unions hold those rights.

He aims to prove that WP Rugby legally sold certain broadcast rights to Aerios - which resulted in actions that caused WP Rugby to declare bankruptcy in 2016 in an attempt to extract itself from a binding agreement with the stadium technology and administration specialists.

When Aerios (Pty) Ltd, the agency which managed the advertising rights of the WPRFU since 2012, filed damages claims amounting to ZAR183-million earlier this month, it submitted reams of evidentiary documents.

It is when you start examining the annexures to the summons that some extraordinary and peculiar information comes to light.

In one of the first annexures to the summons, there is a sale agreement dating back to 1999 - when the Western Province Rugby Football Union sold all its right to WP Rugby (Pty) Ltd.

The sale was for ZAR75-million and it included all the assets - specifically the intangible assets (trademarks, trade names, broadcast rights, sponsorship rights, etc).

These same assets were - in 2016, after WP Rugby declared bankruptcy - sold by WPRFU to a newly-formed Newco, which is wholly owned by WPRFU and have WPRFU officials on its board, for a meagre ZAR19-million.

Another oddity, from that first annexure, is that Ronnie Masson (as President of WPRFU) entered into an agreement with Ronnie Masson (as Director of WP Rugby (Pty) Ltd) to sell the business as a going concern.

Masson signed the sale agreement on behalf of both WPRFU and WP Rugby.

"It included all the assets, specifically the intangible assets - trademarks, trade names, broadcast rights, sponsorship rights, etc," Constantinou explained to @rugby365com.

"These rights were legitimately sold by WPRU to WPR (Pty) Ltd and, under the ARMA agreements, WPR (Pty) Ltd had sold certain mobile digital rights to Aerios.

"This will also form a part of our court action.

"We will set out to show who these rights legitimately belong to.

"We will also demonstrate the effect this had at the time and would continue to have in the future, given the manner in which SARU deals with the broadcast and advertising rights of the unions."

The Aerios boss is adamant that he can prove that the legitimate owner of these rights was WP Rugby.

He claimed SARU/SA Rugby CEO Jurie Roux had been notified, in writing and verbally by both WP Rugby and Aerios, not to sell these limited mobile rights on to a third party.

"It is also important to note that their [SA Rugby/SARU] member is WPRFU, not WP Rugby [Pty Ltd]," Constantinou told @rugby365com.

"WP Rugby was an independent company, with independent private shareholders.

"WPRFU sold certain mobile digital and other commercial rights to WP Rugby and they, WP Rugby along with Aerios, notified SARU as to the deal that was done and that they should be aware of the rights provided to Aerios in the renewal agreement with broadcasters or mobile digital networks."

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