Nelson Mandela Bay Stadium affected by anchor tenant impasse

The bosses of the Isuzu Southern Kings and the Mandela Bay Development Agency, who have clashed over the signing of a new anchor tenant agreement, have 30 days to iron out their differences and finalise the contract.
Until then, the Kings will continue to play their games at alternative venues away from Nelson Mandela Bay Stadium.
The impasse, which has dragged on for weeks, is what led to the Kings playing their last three matches at Nelson Mandela University’s Madibaz Stadium. The team is scheduled to play its next match on November 25, also at the Madibaz Stadium.
The municipality this week stepped in to try to get the parties to reach an agreement as it was ultimately a council decision to have anchor tenants at the stadium to ensure it does not become an under-utilised white elephant.
Acting city manager Noxolo Nqwazi, who is also the executive director of sports, recreation, arts and culture, met representatives of the development agency, stadium management, the EP Rugby Union and Kings on Thursday, when it was agreed that games would return to the stadium as soon as an agreement was signed.
Nqwazi said anchor tenants were important for the financial viability of the stadium and to achieve the city’s sport tourism objectives.
While it costs the municipality for security, traffic and emergency services every time a match is hosted at the stadium, there are profits to be made for the stadium.
“The decision of [renting out suites] is based on the games played at the stadium. Advertising by various companies as well is based on the games.
“The stadium also makes profits when the stadium is in use [if] anchor tenants play all their games at the stadium.
“Therefore, the matters of conflict must be resolved and the Kings must remain as anchor tenants,” Nqwazi said.
“The meeting acknowledged the risk issues, as raised by the MBDA, which needed to be mitigated. There will be a meeting of all stakeholders to look into the anchor tenant agreement to finalise the matter,” she said.
It is unclear exactly which clauses in the contract the Kings and the agency are struggling to agree on, with Nqwazi saying it was around event costs, ticketing and disagreements over who would be responsible for which costs.
The agency, which took over the management of the stadium in January 2017, has been negotiating new anchor agreements with the Kings and EPRU as the Kings recently underwent a change of ownership.
A consortium of predominantly black businessmen bought the majority stake in the franchise.
A joint statement from the agency’s CEO, Ashraf Adam, stadium manager Mpho Mokonyama, EPRU president Andre Rademan and Nqwazi, said the agency had been negotiating a new anchor tenant agreement with the Kings for the 2018-19 season.
“There has been disagreement on some terms and conditions, hence the parties agreed to a one-match agreement (August 2018), pending the finalisation of a new anchor tenant agreement.
“All matters relating to EPRU have been finalised and an agreement will be signed soon.
“As far as an Isuzu Southern Kings agreement is concerned, the acting city manager [Nqwazi] has mandated the parties to a round-table discussion to iron out the various issues in contention.
“A deadline of 30 days has been agreed to by both parties for an anchor tenant agreement to be finalised.”
They added that all were in agreement that the Kings would continue to play matches at alternative venues until a new agreement was in place.
“It is important to note that all parties are committed and engaged to ensure that rugby returns to its rightful place at the iconic Nelson Mandela Bay Stadium,” they said.
MBDA spokesperson Luvuyo Bangazi said on Friday: “We are doing all we can to retain football and rugby as a core component of the stadium business.
“We do not foresee a future without our tenants, which is why we are continuously engaging with them to find win-win scenarios.
“The stadium needs to generate revenue and lessen its burden on ratepayers. That’s the mandate to the MBDA.”
Early last year, the council agreed to a R15m bailout of EP Rugby to help with its financial woes – a move it said would help save professional rugby in the province.
The money was to be paid in tranches of R5m over three years.
Nqwazi said this week that the city could not back out of its funding agreement with EP Rugby, regardless of whether or not an anchor contract would be signed.
She said the funding agreement was in its last year, but the city had not yet paid the money for the 2018-19 financial year.
“It’s a difficult one. We have an agreement in place.
“The funding agreement is in place because we want to support rugby locally at a developmental level but also to support the rugby academy at the university because it then feeds into professional rugby.
“And to support the Kings as well,” she said...

This article is reserved for registered HeraldLIVE readers.

Simply register at no cost to proceed. If you've already registered, simply sign in.

Already registered on DispatchLIVE, BusinessLIVE, TimesLIVE or SowetanLIVE? Sign in with the same details.



Questions or problems? Email helpdesk@heraldlive.co.za or call 0860 52 52 00.

X