Prem rugby in talks to sell 51% share in the league for £275 million

[Stom]

More here from McCafferty, sounding quite bullish - “I can’t see it is in the interests of our shareholders to do anything other than protect the values of the game and support the England team. It doesn’t make sense to dismantle any of that. But clearly there are opportunities out there to attract significant amounts of capital that can accelerate growth and make us bigger, better and stronger. We’ve got a variety of options as to how to achieve that.”

“As has always been the case, the fortunes of the clubs and England will be linked. I don’t see us changing that particularly.”

https://www.theguardian.com/sport/2018/ ... m-takeover

Something is going to happen. What, and what impact it will have on the game, remains to be seen. What should be obvious is that the success of the national side is the greatest driver in growing the sport in England.

That sounds good. But why, then, are a company like CVC even under consideration? They don't give a toss about fans or experience: just about making money in the simplest way possible...

[Mellsblue]

More here from McCafferty, sounding quite bullish - “I can’t see it is in the interests of our shareholders to do anything other than protect the values of the game and support the England team. It doesn’t make sense to dismantle any of that. But clearly there are opportunities out there to attract significant amounts of capital that can accelerate growth and make us bigger, better and stronger. We’ve got a variety of options as to how to achieve that.”

“As has always been the case, the fortunes of the clubs and England will be linked. I don’t see us changing that particularly.”

https://www.theguardian.com/sport/2018/ ... m-takeover

Something is going to happen. What, and what impact it will have on the game, remains to be seen. What should be obvious is that the success of the national side is the greatest driver in growing the sport in England.

That sounds good. But why, then, are a company like CVC even under consideration? They don't give a toss about fans or experience: just about making money in the simplest way possible...

Because the clubs can’t keep making losses. The terms of the initial injection will be that the money must be used on infrastructure that will derive an/increase income, eg ground development (Sarries and Quins) or hotel on site (Leicester and Worcester). They then want a outfit that will continue to generate money and CVC are very good at that. You only have to look at what the Glazers have done at Man Utd to see how much you can sweat an asset if you get the right people to do it.

[Digby]

£20 million is a decent sum, but is it that much when it comes to ground and or hotel development on a per club basis? What sort of return on capital are we looking at?

Which is why I wonder in the first instance what would the money be spent on in order to take a view on whether I like the idea

[Digby]

Essentially giving a loss making business a cash injection mostly I'd assume results in a business continuing to make a loss. So if the argument is used that the clubs cannot continue to make a loss I'd hope the various boards offer their genitals as surety that post receiving funds that wouldn't simply carry on as before

[Stom]

More here from McCafferty, sounding quite bullish - “I can’t see it is in the interests of our shareholders to do anything other than protect the values of the game and support the England team. It doesn’t make sense to dismantle any of that. But clearly there are opportunities out there to attract significant amounts of capital that can accelerate growth and make us bigger, better and stronger. We’ve got a variety of options as to how to achieve that.”

“As has always been the case, the fortunes of the clubs and England will be linked. I don’t see us changing that particularly.”

https://www.theguardian.com/sport/2018/ ... m-takeover

Something is going to happen. What, and what impact it will have on the game, remains to be seen. What should be obvious is that the success of the national side is the greatest driver in growing the sport in England.

That sounds good. But why, then, are a company like CVC even under consideration? They don't give a toss about fans or experience: just about making money in the simplest way possible...

Because the clubs can’t keep making losses. The terms of the initial injection will be that the money must be used on infrastructure that will derive an/increase income, eg ground development (Sarries and Quins) or hotel on site (Leicester and Worcester). They then want a outfit that will continue to generate money and CVC are very good at that. You only have to look at what the Glazers have done at Man Utd to see how much you can sweat an asset if you get the right people to do it.

They will take a higher and higher amount of money directly out of the game, however...

I think it's far more sensible to get a much smaller sum and spend that on PR and financing a few more years of low TV deals to grow exposure to the club game.

I don't think selling out to venture capitalists is beneficial to the long term health of the game.

[Scrumhead]

This is true.

In any normal business situation, it would be a lot easier to look at the reasons behind the losses and find ways to address these but it isn’t as simple as that.

For example, ever-increasing player wages are a key issue which seems to be at odds with the commercial value of the game in England. In effect, if the amount of money clubs are able to generate in TV rights, ticket sales and sponsorship (to put it simply) is not growing, then player wages shouldn’t be rising. The problem is that other leagues (most notably France) will pay their players a lot more, so our clubs either keep up or risk losing their best players overseas.

Looking at the figures, I’m shocked at how cheap Premiership Rugby is in comparison to other, seemingly less popular sports. This suggests two things - 1) the product isn’t seen as having a high demand and 2) whoever is negotiating isn’t doing a good enough job. I suspect both are true, but it’s difficult to grow the popularity of the club game without investment - hence the attraction of CVC’s offer.

I don’t want Premiership Rugby controlled by venture capitalists, but the market forces at work mean investment from somewhere is imperative.

[Mellsblue]

That sounds good. But why, then, are a company like CVC even under consideration? They don't give a toss about fans or experience: just about making money in the simplest way possible...

Because the clubs can’t keep making losses. The terms of the initial injection will be that the money must be used on infrastructure that will derive an/increase income, eg ground development (Sarries and Quins) or hotel on site (Leicester and Worcester). They then want a outfit that will continue to generate money and CVC are very good at that. You only have to look at what the Glazers have done at Man Utd to see how much you can sweat an asset if you get the right people to do it.

They will take a higher and higher amount of money directly out of the game, however...

I think it's far more sensible to get a much smaller sum and spend that on PR and financing a few more years of low TV deals to grow exposure to the club game.

I don't think selling out to venture capitalists is beneficial to the long term health of the game.

They will of course take money out of the game. The gamble is obviously that you get 50% of a pie three times the size of the pie you currently 100%. That’s before you take into account the lump sum is designed to be invested in ways that will see a return so, you will have another income stream.
As previously said, I’d rather they brought in a Scudamore, Kenyon etc and did it themselves. The Premier League did it that way. That said, there are so many egos involved in the current set-up hiving off the commercial aspect might make sense.

[Mellsblue]

£20 million is a decent sum, but is it that much when it comes to ground and or hotel development on a per club basis? What sort of return on capital are we looking at?

Depends how big the hotel is. Wuss and Leicester own the land so they’re 50% of the way there. As for ground redevelopment, this seems too much of a coincidence:
https://www.standard.co.uk/sport/rugby/ ... 25456.html

[Mellsblue]

According to the times they are meeting today and Craig, Orange, Lansdowne and Rowe, ie the richest owners, will vote it down.
Unsuprisingly, Brucey has his own bigger, betterer and shinier plan.

[Mellsblue]

According to the times they are meeting today and Craig, Orange, Lansdowne and Rowe, ie the richest owners, will vote it down.
Unsuprisingly, Brucey has his own bigger, betterer and shinier plan.

Sorry. I forgot to quote myself.

[jimKRFC]

Kitson from the Guardian has an article on it:

https://www.theguardian.com/sport/blog/ ... g-cvc-275m

The premiership shield as a 2nd division sounds plausible, I'd rather mix the current Championship & Shield and have two conferences that have play offs to go up myself. Guess it would mean splitting the game North/South from there down though.

[Mellsblue]

Second division is utter bollox. Who is going to watch their ‘A’ team if it means every weekend is spent watching the rugby. Not enough to make it worthwhile that’s for sure. If you want two division pick the strongest Champ teams - on and off field - and help them make a success of it.
Also, funny who they want to lessen the teams in the Champions Cup but not in the Prem. I wonder why....oh, yeah ££££££.

[Puja]

The clubs reckon they have an answer to that as well: the squads of the future (some are already doing so) will contain over 60 players to enable them to field competitive teams in the newly recast and expanded Premiership Shield (formerly the A League)

That is stupid. Clubs will either flog their best players into the ground, as the top ones will always be needed for crunch games, or they'll end up doing what the French do and playing a shadow XXIII for away games and devaluing the league entirely. And where will the money for these larger squads come from? If it begins with r and ends with aising-the-salary-cap and you genuinely believe that won't just result in wage inflation for the top players, I've got a bridge I'd like to sell you. As I recall, "We'll have bigger squads and more rotation," was part of the rationale for the last salary cap hike. Plus, where is this extra money coming from - they're already losing money hand-over-fist with the current salary cap.

The Premiership Shield as a second tier is risible - just ringfence and be damned if that's what you want, don't insult us with this. And the idea of an extra set of home fixtures - do clubs turn any profit from A league games? What makes them think they'll get mass public support for their development XVs?

If clubs wanted more fixtures and more bar income, then there's a way to do it without thrashing the playing pool to death - stage the women's premiership on the off day that the men aren't playing and build crowds by including it in the season ticket for free and charging half the price for others for the first year or two. Hell, if we're ringfencing, rejig the women's prem to have the same teams as the men's and have the same fixture list so the men play away and the women at home and vice versa.

Puja

[Mellsblue]

So, it’s a unanimous no. The sticking points were the majority share and the £££££ on offer. The Times believe that PRL will now only sell a minority share and value the company at £800 mil rather that the £550 mil of the CVC offer.

[Mellsblue]

CVC now in a exclusivity period with PRL until the end of the month. That would suggest a deal is close.

[Digby]

We wait with whatever level of interest as to what creative shenanigans see the clubs and cvc both have a controlling interest

[fivepointer]

https://www.theguardian.com/sport/2018/ ... ugby-union

Premiership club owners are likely to vote for a proposal to give a minority stake to the private equity firm CVC in return for more than £200m, two months after they turned down a takeover bid.
CVC, which held a majority stake in Formula One between 2006 and 2017, came back with a new offer that would mean it ran the commercial arm of the Premiership but not the league itself. This would keep the agreement within World Rugby’s regulation governing ownership and mean the 12 clubs enjoyed a greater proportion of profits than under the original bid.
Premiership Rugby has held talks with CVC in recent weeks and it is understood a firm offer will be tabled at the next board meeting, which is to be attended by the clubs’ owners, on 11 December. The 12 would each receive an immediate cash injection of around £20m at a time when only Exeter are in profit.

[Raggs]

Surely it would be split 13 ways?

[Puja]

I am in favour of this only if the money is ringfenced for either investment or paying down expensive debt. It only makes sense to sell future profits if it is used to restructure the businesses so they make money (or at least lose less). If any of this is used on marquee players, then there will be mass failures among the clubs in the near future.

Alas, the Guardian is reporting that there are Prem clubs now looking to gazump Racing 92 for Kieran Read. Jam today, as always.

Puja

[Stom]

I am in favour of this only if the money is ringfenced for either investment or paying down expensive debt. It only makes sense to sell future profits if it is used to restructure the businesses so they make money (or at least lose less). If any of this is used on marquee players, then there will be mass failures among the clubs in the near future.

Alas, the Guardian is reporting that there are Prem clubs now looking to gazump Racing 92 for Kieran Read. Jam today, as always.

Puja

Even if the Prem club is Leicester?

There aren't many clubs with a sustainable financial model, but Tigers are one of them. And they could do with a good 8.

[Tigersman]

Leicester tigers sign Manu to a new contract worth £15 million citing 3rd time the charm

[Mellsblue]

Please tell me that’s missing a decimal point.

[jimKRFC]

The 12 would each receive an immediate cash injection of around £20m at a time when only Exeter are in profit.

According to another article Bristol also made a profit (before tax) of £1.2M - slightly more than Exe managed.
https://www.theguardian.com/sport/2018/ ... nd-verdict

If they are only talking to 12 teams then who's been cut off? It should surely be the 13 "P" Share holders.

[Puja]

I am in favour of this only if the money is ringfenced for either investment or paying down expensive debt. It only makes sense to sell future profits if it is used to restructure the businesses so they make money (or at least lose less). If any of this is used on marquee players, then there will be mass failures among the clubs in the near future.

Alas, the Guardian is reporting that there are Prem clubs now looking to gazump Racing 92 for Kieran Read. Jam today, as always.

Puja

Even if the Prem club is Leicester?

There aren't many clubs with a sustainable financial model, but Tigers are one of them. And they could do with a good 8.

Even if it's Leicester. This isn't a windfall - it's selling future profits. It needs to be invested so we're not screwed if CVC don't actually increase the overall pie.

And you say sustainable financial model, but we still lost money last year, which is terrible considering the base we have. Thankfully, it looks like our share of the CVC money is already earmarked for the hotel/car park development which should prove a good earner.

Puja

[Stom]

I am in favour of this only if the money is ringfenced for either investment or paying down expensive debt. It only makes sense to sell future profits if it is used to restructure the businesses so they make money (or at least lose less). If any of this is used on marquee players, then there will be mass failures among the clubs in the near future.

Alas, the Guardian is reporting that there are Prem clubs now looking to gazump Racing 92 for Kieran Read. Jam today, as always.

Puja

Even if the Prem club is Leicester?

There aren't many clubs with a sustainable financial model, but Tigers are one of them. And they could do with a good 8.

Even if it's Leicester. This isn't a windfall - it's selling future profits. It needs to be invested so we're not screwed if CVC don't actually increase the overall pie.

And you say sustainable financial model, but we still lost money last year, which is terrible considering the base we have. Thankfully, it looks like our share of the CVC money is already earmarked for the hotel/car park development which should prove a good earner.

Puja

I thought the losses were on the hotel/car park development.

Much like Quins losses were mainly down to a restructuring.

But, then again, I've been out of the country for long enough now. When I left, Quins were in a very healthy state. Now I'm not so sure.