Premiership rugby clubs to discuss £275m takeover approach from CVC
Premiership Rugby will next week discuss a £275m deal with a private equity firm, CVC, but if it hands over control the Rugby Football Union would need to give its consent.
A report this week said CVC would take a 51% controlling interest in Premiership Rugby in return for the money which would give each club, plus London Irish, which is one of the 13 shareholders, a lump sum of around £17m.
It would also mean the clubs’ income from central funds would be halved, but a year of talks with the equity firm, which used to own Formula One and made £8bn from it in 10 years, has prompted the belief that the value of various commercial and TV contracts will more than make up the shortfall when they come up for renewal.
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Read moreNo decision will be made next week, with clubs saying on Wednesday a deal was not close, but under World Rugby regulations, sponsorship and broadcast deals for competitions in all forms of rugby have to be negotiated by member unions unless they devolve the responsibility to clubs or associated bodies, as the English and French governing bodies did a decade ago to their professional league organisations.
If CVC held a controlling interest it would mean a non-rugby body would be in charge, breaching the regulation.
The RFU declined to comment beyond saying it was monitoring developments, while Premiership Rugby issued a statement that said interest in the English club game was a reflection of its growing international appeal and that it was always considering options for further expansion.
The key issue will be control as the Saracens owner, Nigel Wray, acknowledged, because CVC would be unlikely to part with such a large sum otherwise.
“CVC would only take 50%, not 51,” he told rugbypass.com. “The clubs would still have the balance and a much better business. It is vital to get a trusted financial partner to take the game forward and because of that Saracens would support consideration of this offer. I do not know if the vote has to be unanimous and if there are other proposals that are even better, then great, because we need massive investment.”
The clubs will be publishing their accounts for 2017-18 in the coming months and are expected to record an aggregate loss of £35m. None of Premiership Rugby’s major contracts is up for renewal imminently: Gallagher is in its first season of sponsoring the league, the television contract with BT has three seasons to run and the financially lucrative agreement with the RFU over elite players does not end until 2024.
Overseas television rights are one avenue but it may be that a deal is delayed until the BT contract comes up for renewal, with Sky said to be interested in reclaiming the rights it lost earlier this decade and the likes of Amazon being courted.
“There is not a timeline I am aware of,” Wray said, “but this can be a positive gamechanger.”
Source: https://www.theguardian.com/sport/2018/sep/05/premiership-clubs-to-discuss-takeover-approach-from-cvc-capital-partners-rugby-union
A report this week said CVC would take a 51% controlling interest in Premiership Rugby in return for the money which would give each club, plus London Irish, which is one of the 13 shareholders, a lump sum of around £17m.
It would also mean the clubs’ income from central funds would be halved, but a year of talks with the equity firm, which used to own Formula One and made £8bn from it in 10 years, has prompted the belief that the value of various commercial and TV contracts will more than make up the shortfall when they come up for renewal.
Sign up to the Breakdown for the latest rugby union news
Read moreNo decision will be made next week, with clubs saying on Wednesday a deal was not close, but under World Rugby regulations, sponsorship and broadcast deals for competitions in all forms of rugby have to be negotiated by member unions unless they devolve the responsibility to clubs or associated bodies, as the English and French governing bodies did a decade ago to their professional league organisations.
If CVC held a controlling interest it would mean a non-rugby body would be in charge, breaching the regulation.
The RFU declined to comment beyond saying it was monitoring developments, while Premiership Rugby issued a statement that said interest in the English club game was a reflection of its growing international appeal and that it was always considering options for further expansion.
The key issue will be control as the Saracens owner, Nigel Wray, acknowledged, because CVC would be unlikely to part with such a large sum otherwise.
“CVC would only take 50%, not 51,” he told rugbypass.com. “The clubs would still have the balance and a much better business. It is vital to get a trusted financial partner to take the game forward and because of that Saracens would support consideration of this offer. I do not know if the vote has to be unanimous and if there are other proposals that are even better, then great, because we need massive investment.”
The clubs will be publishing their accounts for 2017-18 in the coming months and are expected to record an aggregate loss of £35m. None of Premiership Rugby’s major contracts is up for renewal imminently: Gallagher is in its first season of sponsoring the league, the television contract with BT has three seasons to run and the financially lucrative agreement with the RFU over elite players does not end until 2024.
Overseas television rights are one avenue but it may be that a deal is delayed until the BT contract comes up for renewal, with Sky said to be interested in reclaiming the rights it lost earlier this decade and the likes of Amazon being courted.
“There is not a timeline I am aware of,” Wray said, “but this can be a positive gamechanger.”
Source: https://www.theguardian.com/sport/2018/sep/05/premiership-clubs-to-discuss-takeover-approach-from-cvc-capital-partners-rugby-union