With many of the smaller and even bigger rugby unions in dire straits financially and the country housing the biggest number of professional rugby players, Alexander believes that these unions have no option but to change their financial models and cull players.
The change in the funding model means that the smaller unions are going to have to forfeit monies emanating from the Super Rugby broadcast deal and that of the PRO14 competition leaving the Super Rugby franchises with a greater claim to the pie of the money they bring in.
At the same time, the very same small unions will in all likelihood have to limit their operations to a semi-professional one with all of their players being part-time rugby players.
“Provinces have got money. I know it is another story with the smaller unions but the question is where to cut the money?” said Alexander earlier in the week.
“You have to pay the people who are generating the funds more. Where are our funds generated? Super Rugby and now PRO14. That’s unfortunate but we are not here to kill the smaller unions; we are finding other mechanisms to sustain them.
“That is why the new contracting model allows a player to work during the day and plays rugby in the weekend and still gets paid. But is not sustainable to have 990 players playing professional rugby in the country – we are the biggest in the world.”
Alexander denied that Saru and its affiliates woke up too late to the realities of the professional game and the importance of ceding much of the misplaced powers to amateur administrators into the hands of equity partners.
While Saru have seemingly relaxed their own rules that barred equity partners from owning more than 49 percent of franchises and unions, the recent acquisition of the Southern Kings deal by a black consortium proves the greater need for rugby is to no longer be run by administrators but by appointed professionals.
“I don’t think we woke up too late. We had to clean up the mess first. You can’t go and sell something that is broken. We had to fix what was broken and now we put it up for sale,” Alexander said.
“I think when you have equity partners and you have something that is broken and your equity partners have a deep pocket, it’s different.
“We cannot deliver professional rugby on our own. We need franchise partners and to bring in professionalism running businesses.
“We’ll see more companies coming in to run franchises and I know there is negotiations with two others.”
But getting equity partners on board doesn’t necessarily mean that franchises and unions will be financially sustainable but there will be money going about to ensure that rugby survives and thrives as long as the financial burden is no longer reliant on the game itself.
In fact, Alexander believes a change in the structure, a decrease in professional players, an increased number of franchises with two more likely to join the Cheetahs and Kings in the PRO14,and handing over the running of the rugby business to professionals, will undoubtedly bring in more money and also stem the tide of players being lost to the overseas market.
Alexander pointed to the fact that many English and French clubs are struggling with the ballooning wages bills which has been brought on by the influx of foreign players and will now hold back on luring players from South Africa and New Zealand with exorbitant pay cheques.
This is where Saru and its affiliates will cash in says Alexander and even though they will enjoy their Christmas at the cost of some of their turkeys, there is the promise of a lot more Christmas feasts ahead than the dire outlook of nothing to look forward to even with a lot of turkeys about.
“Most organisations get a return on ego more than a return on investment. In Europe they published figures and they are all running at a loss. The cost of players has sky-rocketed and it’s driven by the north especially England and France. I think France has pulled that back and you will see the difference with the limited number of foreign players in the leagues and then the prices will go back to normal. They’ve outpriced the market for players and we cannot sustain that,” said Alexander.