RugbyRebels

Interesting.

From what is in the public domain (Irish Companies house equivalent) the legal entity that owns the commercial rights to Pro14 is Celtic Rugby DAC (designated activity company). The three shareholders (equal shares) are the SRU, IRFU, WRU.

The FIR (Italy) and SARFU receive participation payments but as it stands are not currently shareholders. There was press on Oct 18 suggesting that the FIR would become a full shareholder “in the coming year” but unless public filings are not up to date this hasn’t happened yet.

If this transaction goes ahead it will be interesting to understand how any consideration for the CVC minority stake will be divvied up - to the three existing shareholders or whether the commercial rights will be transferred to a Newco in which FIR / SARFU have an economic interest and therefore stand to benefit. You would have to think that the Italians in particular have to insist on economic benefit. What about the Jonny come lately Saffers?

The next question is how the unions including the SRU will spend the proceeds. Grassroots / existing pro teams / new pro teams / mini-Murrayfield. FWIW I still think the chances of a new pro team remain slim even if this goes ahead.

The chance of joint sale of tv rights is zero unless there's a built in formula to advantage the English. They are clearly the dominant market just by virtue of numbers. There's zero chance they'll forget about that.

As for a "grand final", do we really need more rugby? What's wrong with the Heineken Cup final?

Eugene Wrayburn wrote:The chance of joint sale of tv rights is zero unless there's a built in formula to advantage the English. They are clearly the dominant market just by virtue of numbers. There's zero chance they'll forget about that.

As for a "grand final", do we really need more rugby? What's wrong with the Heineken Cup final?

Well of course there will be a formula in favour of the English however you can see how a broadcaster may be prepared to pay a premium for exclusive access to pro club rugby in Britain and Ireland.

Agree with your second point but he who pays the piper and all that.

ARM wrote:

Eugene Wrayburn wrote:The chance of joint sale of tv rights is zero unless there's a built in formula to advantage the English. They are clearly the dominant market just by virtue of numbers. There's zero chance they'll forget about that.

As for a "grand final", do we really need more rugby? What's wrong with the Heineken Cup final?

Well of course there will be a formula in favour of the English however you can see how a broadcaster may be prepared to pay a premium for exclusive access to pro club rugby in Britain and Ireland.

Agree with your second point but he who pays the piper and all that.

They may pay a premium. On the other hand a rival broadcaster might pay a premium to spoil the party. In any event whilst the European rights are still up for grabs separately it remains difficult to corner the market and not just because there are 2 different tv markets.

I can see club rugby ending up with a structure incorporating conferences like the NFL.
Scottish/ Italian conference.
2 or 3 English.
1 wales
1 Ireland
1 or 2 saffa.

Play offs

Superbowl.

If it takes off, maybe others will join. It would also reduce the amount of rugby played at club level and, if done correctly, increase the revenue. Would free up more time for international rugby where I can see Georgia being welcomed into a 7 Nations with relegation.

So deal seems to be going ahead. 120m for 27%.

£35m each for SRU, WRU, IRFU according to reports (they are the three shareholders of the relevant legal entity. Remainder must be divvied up between Italians and South Africans in some form.

With a rumoured additional 50m from the 6N deal the finances of the SRU will be transformed.

Now - how to ensure this is invested for the long term health of the game in Scotland?
Does this mean commercial/leisure development at Murrayfield - a hotel has been long mooted?
There will be calls for more pro teams of course but this will burn cash quickly. Has to be up for consideration though.
London Scottish?

The other risk is that this just leads to further wage inflation and the monies dissipate in part into the players pockets without a long term return.

ARM wrote:So deal seems to be going ahead. 120m for 27%.

£35m each for SRU, WRU, IRFU according to reports (they are the three shareholders of the relevant legal entity. Remainder must be divvied up between Italians and South Africans in some form.

With a rumoured additional 50m from the 6N deal the finances of the SRU will be transformed.

Now - how to ensure this is invested for the long term health of the game in Scotland?
Does this mean commercial/leisure development at Murrayfield - a hotel has been long mooted?
There will be calls for more pro teams of course but this will burn cash quickly. Has to be up for consideration though.
London Scottish?

The other risk is that this just leads to further wage inflation and the monies dissipate in part into the players pockets without a long term return.

What happened to the idea of buying a stake in Newcastle so we could stack the team full of Scots?

They’d make more money out of this sort of thing (a design for Murrayfield I’ve not seen before).

http://stadiumdb.com/stadiums/sco/murrayfield

I think it looks decent, but think they could do more to increase the overall capacity too. Maybe even bring in safe standing in a couple of the corners all the way back to the top - should improve atmosphere and create a bit of a buzz about going to Murrayfield generally.

I know we spunked a load of money on Murrayfield when the game went pro and have been playing catch-up ever since, but I think judicious investment in the stadium to make it fit for the next 20 years would be sensible now, otherwise it’s more catch-up. We don’t have to go mental, but seeing even Ireland take in more in corporate than us is a competitive advantage to them.

I think that design is decent, but I’d want to increase the capacity significantly at the same time. If we have to play at Celtic Park for a year, so be it.

General Zod wrote:They’d make more money out of this sort of thing (a design for Murrayfield I’ve not seen before).

http://stadiumdb.com/stadiums/sco/murrayfield

I think it looks decent, but think they could do more to increase the overall capacity too. Maybe even bring in safe standing in a couple of the corners all the way back to the top - should improve atmosphere and create a bit of a buzz about going to Murrayfield generally.

I know we spunked a load of money on Murrayfield when the game went pro and have been playing catch-up ever since, but I think judicious investment in the stadium to make it fit for the next 20 years would be sensible now, otherwise it’s more catch-up. We don’t have to go mental, but seeing even Ireland take in more in corporate than us is a competitive advantage to them.

I think that design is decent, but I’d want to increase the capacity significantly at the same time. If we have to play at Celtic Park for a year, so be it.

SRU will get a windfall from 6N CVC deal shortly - that is where money to refurb and upgrade Murrayfileld should come from. This is pro14 money, should go to help our pro 14 teams in some way - not just on wages although some will apparently be needed for those if as is likely there is a short term reduction as CVC take a cut of income

The member clubs of the SRU deserve their fair share too, however small a share that may be. The grass roots clubs have done a power of work in local schools, sometimes to their own detriment and although the SRU do offer some support more would always be welcomed.

The SRU have to make sure the money is spent wisely across the board and investment well planned especially as there is another body going to be taking a cut of the income.

Big D wrote:The member clubs of the SRU deserve their fair share too, however small a share that may be. The grass roots clubs have done a power of work in local schools, sometimes to their own detriment and although the SRU do offer some support more would always be welcomed.

The SRU have to make sure the money is spent wisely across the board and investment well planned especially as there is another body going to be taking a cut of the income.

Loose wording on your part perhaps but CVC will not take a cut of the income directly (other than management/director fees)

They will become a shareholder in Cetic Rugby DAC, or more likely a newco, set up to manage the commercial interests of Pro14 rugby. They will seek to support management to increase the commecial revenue streams, broadacasting and sponsorship in particular, leveraging their part ownership in the GP (and potentially the 6N) to secure enhanced bundled rights packages. The SRU (along with the IRFU and WRU) will be looking at higher participation payments from this increased pot - this will be an expense of Celtric Rugby DAC/Newco. Whilst CVC will be entitled to dividends from net earnings within the appropriate legal entity it is much more likely that they will generate a return from refinancing (debt) the higher maintainable earnings or a capital return from disposal of their (more valuable) equity at some point in the future (again perhaps bundled with 6N/GP interests). Exit options for CVC are interesting to consider - most likely a media company (eg sale of F1 by CVC to Liberty Media) as content ownership is now king followng sector disruption in the last five years.

Anyway...your central point is right. the SRU has to invest sensibly to grow its own long term revenue streams - broadcasting/sponsorship as above but investing in the stadium infrastructure, ideally to boost ticket revenues but also including improved hospitality and leisure provision, hotel, conferencing etc.

septic 9 wrote:

General Zod wrote:They’d make more money out of this sort of thing (a design for Murrayfield I’ve not seen before).

http://stadiumdb.com/stadiums/sco/murrayfield

I think it looks decent, but think they could do more to increase the overall capacity too. Maybe even bring in safe standing in a couple of the corners all the way back to the top - should improve atmosphere and create a bit of a buzz about going to Murrayfield generally.

I know we spunked a load of money on Murrayfield when the game went pro and have been playing catch-up ever since, but I think judicious investment in the stadium to make it fit for the next 20 years would be sensible now, otherwise it’s more catch-up. We don’t have to go mental, but seeing even Ireland take in more in corporate than us is a competitive advantage to them.

I think that design is decent, but I’d want to increase the capacity significantly at the same time. If we have to play at Celtic Park for a year, so be it.

SRU will get a windfall from 6N CVC deal shortly - that is where money to refurb and upgrade Murrayfileld should come from. This is pro14 money, should go to help our pro 14 teams in some way - not just on wages although some will apparently be needed for those if as is likely there is a short term reduction as CVC take a cut of income

Technically its not Pro14 money. Its a return to the shareholders in the Pro14 commercial vehicle (CRDAC). The shareholders are SRU, WRU, IRFU. The italians and Saffers are not shareholders but a suitable bung will have been structured to keep them sweet. The announcements have suggested that of the £120m "investment", £35m goes to each of SRU, WRU, IRFU with the remainder divided accordingly.

ARM wrote:
Loose wording on your part perhaps but CVC will not take a cut of the income directly (other than management/director fees)

They will become a shareholder in Cetic Rugby DAC, or more likely a newco, set up to manage the commercial interests of Pro14 rugby. They will seek to support management to increase the commecial revenue streams, broadacasting and sponsorship in particular, leveraging their part ownership in the GP (and potentially the 6N) to secure enhanced bundled rights packages. The SRU (along with the IRFU and WRU) will be looking at higher participation payments from this increased pot - this will be an expense of Celtric Rugby DAC/Newco. Whilst CVC will be entitled to dividends from net earnings within the appropriate legal entity it is much more likely that they will generate a return from refinancing (debt) the higher maintainable earnings or a capital return from disposal of their (more valuable) equity at some point in the future (again perhaps bundled with 6N/GP interests). Exit options for CVC are interesting to consider - most likely a media company (eg sale of F1 by CVC to Liberty Media) as content ownership is now king followng sector disruption in the last five years.

Anyway...your central point is right. the SRU has to invest sensibly to grow its own long term revenue streams - broadcasting/sponsorship as above but investing in the stadium infrastructure, ideally to boost ticket revenues but also including improved hospitality and leisure provision, hotel, conferencing etc.

Shorthand. CVC will get a cut as a shareholder, agreed. But that shareholder cut means less than 100% of commercial income goes to the other shareholders,and unles there is an immediate large uplift in commercial income, that will mean an initial reduction for current shareholders.. Our share of the 35m needs to fund that, or something else does, or we cut budgets.

The exit strategy for CVC is an interesting subject on its own. Guys !old these have a reputation for a quick buck and slash and run. Yet they stayed with F1 for 12 years IIRC,until the price was right, and although not exactly loved by the FI fans, I think F1 is much better financially now than before them. The downsides seem to be a lot about new venues and other stuff thAt they could do becuase they had full control, we have the benefit of them I only having a minority stake so should be able to stop any really bad ideas - frankly still a worry as pro14th management seem to be clueless about what are bad ideas anyway

Big D wrote:The member clubs of the SRU deserve their fair share too, however small a share that may be. The grass roots clubs have done a power of work in local schools, sometimes to their own detriment and although the SRU do offer some support more would always be welcomed.

The SRU have to make sure the money is spent wisely across the board and investment well planned especially as there is another body going to be taking a cut of the income.

This money for playing in the pro14. It needs to be focussed on making the teams more sustainable and competitive. The SRU will get another lump from the 6N CVC deal, and can do with that as they will.
Rewarding clubs for developing players is a fair issue but should be discussed separately on it own merits, it must not become one of many snouts in the trough issues. If it's right it's right with or without 35m and needs to be sustainable.

septic 9 wrote:

Big D wrote:The member clubs of the SRU deserve their fair share too, however small a share that may be. The grass roots clubs have done a power of work in local schools, sometimes to their own detriment and although the SRU do offer some support more would always be welcomed.

The SRU have to make sure the money is spent wisely across the board and investment well planned especially as there is another body going to be taking a cut of the income.

This money for playing in the pro14. It needs to be focussed on making the teams more sustainable and competitive. The SRU will get another lump from the 6N CVC deal, and can do with that as they will.
Rewarding clubs for developing players is a fair issue but should be discussed separately on it own merits, it must not become one of many snouts in the trough issues. If it's right it's right with or without 35m and needs to be sustainable.

The money isn't directly for playing in the Pro14, it is a selling of shares. It isn't Glasgow and Edinburghs money. Small difference but a difference none the less. There no doubting a good chunk of the money should be spent on the pro sides but that shouldn't mean all of it.

It also would not be about rewarding clubs for developing players, it is helping clubs ensure they aren't only just surviving but thriving so the game stays played across the country. It shouldn't be left to regional league level clubs to fund development officers, coaches embedded in schools etc.

I am not saying the pro teams shouldn't have money invested in them, they should. But the SRU also has a duty to make sure grass root rugby sees it's fair share.

Big D wrote:

septic 9 wrote:

Big D wrote:The member clubs of the SRU deserve their fair share too, however small a share that may be. The grass roots clubs have done a power of work in local schools, sometimes to their own detriment and although the SRU do offer some support more would always be welcomed.

The SRU have to make sure the money is spent wisely across the board and investment well planned especially as there is another body going to be taking a cut of the income.

This money for playing in the pro14. It needs to be focussed on making the teams more sustainable and competitive. The SRU will get another lump from the 6N CVC deal, and can do with that as they will.
Rewarding clubs for developing players is a fair issue but should be discussed separately on it own merits, it must not become one of many snouts in the trough issues. If it's right it's right with or without 35m and needs to be sustainable.

The money isn't directly for playing in the Pro14, it is a selling of shares. It isn't Glasgow and Edinburghs money. Small difference but a difference none the less. There no doubting a good chunk of the money should be spent on the pro sides but that shouldn't mean all of it.

It also would not be about rewarding clubs for developing players, it is helping clubs ensure they aren't only just surviving but thriving so the game stays played across the country. It shouldn't be left to regional league level clubs to fund development officers, coaches embedded in schools etc.

I am not saying the pro teams shouldn't have money invested in them, they should. But the SRU also has a duty to make sure grass root rugby sees it's fair share.

is it reading you have a problem with or just comprehension? Is as if my post which you quoe didn't say
"Rewarding clubs for developing players is a fair issue but should be discussed separately on it own merits, it must not become one of many snouts in the trough issues. If it's right it's right with or without 35m and needs to be sustainable."

If we didn't play in the pro14, we wouldn't be getting this money. And that is why this money should go to securing the future for the Edinburgh and Glasgow in that competition and european ones.
We cannot set up a system to reward clubs foreverafter on the basis of a one off payment. That is lunacy; but if we want to do that, do it with the specific SRU windfall which will come from he 6N windfall from a share sale to CVC.

Both windfalls should be to secure the future, not to spunk on current account, the sort of shite that got the SRU into trouble years ago - blazer management by snouts in tough

It isn't about rewarding clubs for player development, it's about ensuring the game continues to be played across the country because if it doesn't it will eventually hurt the sports popularity. Without rugby clubs doing what they do far fewer people would be interested in the game never mind playing the game.

The grass root clubs are introducing 1000s of kids in to rugby. They often will stop playing at 16-18 but keep an interest in the game. Parents who have never watched rugby in their life are now interested because the local club has been in at the school and got the children interested.

I'm not advocating one off payments to each club. Member (and associate member) clubs getting their "fair share" of the money could be new regional development officers being partly paid for, or additional club development managers to offer more advise as clubs try and improve. At the moment many, if not all FT development officers rely on council funding. I've seen 1st hand how close the SRU came to having no DOs in a region until clubs kicked up a fuss and the council back tracked.

Dodson and the SRU have said before at AGMs and SGMs they'll invest income across the board and there is no reason why they wouldn't with both these large payments.

In saying that, as ever with large sums of money there are many ways to spend it.

No doubt the SRU will fuck it up by buying Wasps or something daft.

Big D wrote:In saying that, as ever with large sums of money there are many ways to spend it.

No doubt the SRU will fuck it up by buying Wasps or something daft.

Or London Scottish!

If it’s “pro14 money”, something they could look at is helping the super6 teams develop decent stands with proper changing rooms, gyms (for the community) and some sort of corporate experience lounge. Give them the means to generate income.

Also, while I’m fixated with corporate, if they do manage to get Scotstoun from the hard-up council, surely they could improve that offering. My mate went for a Euro game last year and said it was a joke. Like a sports hall or something. I didn’t tell him that if he wanted a sports hall, he could have gone to a real sports hall in the corner!