Alas, poor rugby

Bad news, rugby fans. CVC Capital Partners has bought into Six Nations Rugby Ltd, the company that runs the Six Nations championship. This is an Irish-based firm that is co-owned by the various national rugby federations involved. It was set up in 2002 in order to promote and organise the championship and to manage the centralised commercial rights. It is, in effect, a partnership between the Rugby Football Union (RFU), the Fédération Française de Rugby (FFR), the Irish Rugby Football Union (IRFU), the Federazione Italiana Rugby (FIR), the Scottish Rugby Union (SRU) and the Welsh Rugby Union (WRU).

The deal is for £365 million, to be paid over five years, which means that it works out at about £10 million a year for each national body. This has bought CVC 14.3 percent of the business, which means that it has a one-seventh share of the business, equal to the six clubs. What this means in terms of commercial control remains to be seen, but it is clear that the private equity group will be in a position to push for commercial change. And rugby needs to be careful to avoid the problems that F1 had to go through.

At the moment the rugby world seems to think this is a good idea. If one follows the story of CVC Capital Partners in Formula 1, it was a similar story at the beginning. It was not long before they began squeezing every penny they could get out of the sport, putting coverage behind pay-walls and loading the business with debt by borrowing against future earnings. It may not be quite as easy in rugby because of the need to keep the other six partners happy, but money talks loudest and the kind of numbers being discussed will turn heads in the rugby world.

The clubs are hopefully aware that they are dealing with people who don’t actually give a toss about sport and will not waste much energy trying to grow and develop it. It is naive to think that they will do anything other than helping themselves. If this happens to grow the sport as well then it will be fortunate, but the sport is not their primary aim: money is all that matters.

CVC Capital Partners is efficient – but did not seem to care what state it left F1 in, as long as there was a buyer at the end. They paid $2.1 billion for control of the F1 group and took multiples of that out, but the sport gained little in return.

Perhaps rugby thinks it is a risk worth taking in order to join other big international sports, but it is a risk that few involved in F1 would consider worth taking. One thing is clear in F1 circles: Liberty Media has a much more enlightened way of doing business.

Perhaps CVC Capital Partners has picked up some tips – but it isn’t very likely. Leopards don’t changed their spots. Vultures are vultures.

18 thoughts on “Alas, poor rugby

  1. I think CVC already have equity in 2 other European based Rugby Tournaments. Not alone New Zealand Rugby Union just inked a similar deal with an American based investment fund……….one keeps ones fingers and toes crossed…………..

  2. OMG – I had seen that, but hoped it wasn’t that “CVC”. Oh well, it seems that most professional sport is going that way in the pursuit of the money to pay the participants, but neglecting the fans. Some Rugby Union Championships are already behind pay walls for TV coverage with highlights only on free to view. I wonder which TV companies will pay for rights? Was there any concern about the monetary return to TV companies televising F1 when CVC were involved?
    It’s not so much the paying to view I object to, it’s the multiple platforms and the overall fee payable – eg to watch Sky Sport in the UK a wider very expensive package is required with all the extra equipment and if you want to add on BT Sport to watch MotoGP and WRC highlights from Eurosport that’s an expensive extra. OK, streaming services are also available, but I and I’m sure a lot of others want to be able to record to enable viewing at a sensible time.

  3. Really worrying for the game of Rugby. I agree; I really hope that CVC have mellowed a little and are as concerned about the sport as they will be about the $$$$€€€. I know that’s highly unlikely and they will simply do to Rugby what they did to F1. Leopards don’t change their spots. Just follow the money…….

  4. As I don´t like either rugby or venture capitalists, shall watch this with interest. Images of a fat cow swimming with piranhas come strangely to mind….

  5. Joe, you’ll be getting no Christmas cards from the board of CVC this year! Scathing commentary! Though well-deserved. One wonders if the Rugby folk wouldn’t have made a call or 2 to the F1 guys prior to signing off.

  6. As a big rugby fan as well as F1 I’ve been telling people about the pitfalls of CVC but they just see the money going to each club and think it’s all good. Hopefully it will stay that way but given their history….

  7. Something even worse than Sky having exclusive F1 coverage! You wouldn’t believe it but it is. They’re just asset strippers and once they’ve fed on Rugby for a few years they’ll move on with just a jar of marmite and water biscuits that no one really wants. The RFU are crazy to think of taking the money, they should resign.

  8. CVC already have a big stake in English domestic rugby union, which now lives behind a pay wall and struggles to get five-figure attendances.

    Ah well.

    English football can live behind the paywall so all sports seem to think they can. But no. Look at cricket. Or rugby league.

    1. The Rugby frderations will probably need lots of money to settlr lawsuits brought by fomer players who are now suffering from varing levels of dementia one suspects that this will precipitate rule changed that could affect the game to the detriment of the spectator experience. Thure future for rugby is not clear bur CVC seem happy to take a punt.

  9. I couldn’t agree more being both an avid f1 and rugby fan; particularly as the base for rugby is historically less wealthy than motorsport / F1 and thus less likely to be able to afford paywall sport. I wish the main stream media would critique such purchases and future plans by cvc instead of just re-publishing the marketing spiel.

  10. Rugby has been run by idiots for a very long time, that they’ve allowed CVC to get a sniff of their money doesn’t come as a surprise.

    Coincidentally an American billionaire, Henry Engelhardt, who owns Admiral Insurance, along with Catherine Read of Royal London Asset Management, have joined the board of the Welsh Rugby Union today. Looking like a carve up from here.

  11. I kinda agree with everything you say Joe. I played rugby as an eight year old until I was 52. I remember the £5 match fees and then £50 at the Chiropractor wasn’t sustainable on my bank balance or my body. I love the sport and paid the £45 BT sports and the £70 Sky package for 25 odd years but enough is enough. I stopped paying about 2 years ago. I rely on ITV for F1 and Channel 5 for Premiership Rugby highlights and the odd live coverage…… If 6 Nations goes behind paywall (but will British Government allow that?) then its down the pub or around a Mates house with a crate of beer and an Uber home. I used to watch ALL the boxing back in the day but always refused to pay the extra “box office” on top of the subscription so have no idea and not much interest in the boxing world now…… I would say that boxing is now a minority/niche sport along with cricket which seems to be reversing its way out of paywall. From what I read, no broadcaster wanted to pay the fees because nobody watches cricket now because it went behind paywall. Its done enormous damage to cricket….
    Having said all that, World Rugby and rugby in general is very vey badly run……. and all the individual unions are badly run…… Twickenham is practically bankrupt which took a phenomenal amount of incompetence to achieve….CVC is like a jackal looking for easy prey….. all very depressing but rugby only has itself to blame…..😩

    1. Excellent points by Joe and most of the redpobses. It all stems from how the International Rugby Board (now World Rugby) made such a mess of the end of amateurism (or as it had become shamateurism) in 1995.

      There was no guidance or plan, it all started with a reaction to 🇿🇦, 🇦🇺 and 🇳🇿 made the initial pact with Kerry Packer. In Europe it was even worse with England allowing the club’s to dictate how the professional game was set up.

      Let’s hope the 6 Nations (12 nationalities at least 😃) can survive. It’s already been through a learning curve in the early 2000’s where England did its own broadcast deal that nearly broke the championship. It would be the F1 equivalent of a race starting on the BBC but ending on Sky.

      Sadly Joe writes this with the absolute benefit of seeing how the revenue maximisation and asset stripping actually changed the sport and how Liberty may want to change the model, but the bills have to be settled. Rugby is about to find out the same lesson.

      There seems a lot of 🇺🇸 interest in rugby union now as well as an 🇺🇸 hedge fund has bought the Sharks here in South Africa. They don’t do it for the love of the game.

  12. Well spoken Joe but I think you’re being unkind to vultures ! Short term gain long term loss but then too many people have always been seduced by £, $, E signs. It is how the spivs, charlatans and Rich are able to go on plying their evil deeds, somehow we never learn.

  13. Union clubs in GB and Ireland has been in trouble for years financially and they’ve just just made things worse. They’ve taken the bait and are in for a very unpleasant few years.

  14. According to Rugby’s Ben Morel:

    “[…] moving the Championship off free-to-air TV in order to maximise revenue is not a foregone conclusion.”

    I don’t know whether to marvel at his optimism or despair at his naivety.

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