New deal could be rugby’s life-saver
With professional rugby facing an uncertain financial future, a new £120m (R2.56bn) partnership between Guinness PRO14 and CVC Capital could prove to be a life-saver for cash-strapped clubs. Amid the financial devastation caused by the onslaught of Covid-19, the lucrative deal will be welcomed by all clubs in the global five-nation tournament.
Just how much of the cash will find its way to the Isuzu Southern Kings remains to be seen.
Because the CVC deal is for stakeholders only, SA Rugby Union clubs will not experience an immediate benefit.
The first beneficiaries will be Celtic League origin clubs, and not sides who recently joined the previous PRO12 competition.
The Saru clubs are board members of Celtic Rugby DAC (PRO14 Rugby), but not stakeholders.
However, the long-term benefits to the Kings and Cheetahs are expected to be huge.
PRO14 bosses have promised the cash injection will be of assistance to all their clubs in the years ahead,
After fears that the deal might be put on ice because of the pandemic, all 14 PRO14 clubs will be breathing a sigh of relief.
The pandemic has put rugby under intense financial pressure, and the Kings have to adapt to unusually challenging circumstances in austere times.
They already got a taste of the effects of Covid-19 when salary payments were delayed until after the franchise received R6m in additional funding from the Nelson Mandela Bay metro.
In light of the pandemic, clubs have been forced to implement pay cuts and rethink their business models.
Insiders say the new PRO14 deal will benefit fans, players, clubs and unions as the sport battles to stay afloat.
Under the share agreement, CVC will acquire a 28% share of PRO14 Rugby from Celtic Rugby DAC while the unions will retain a 72% majority stake.
The partnership commitment will allow both PRO14 Rugby and the national unions to continue to invest in the sport — both at professional and amateur level — to achieve its potential over the long term.
A portion of the investment will be held centrally at PRO14 Rugby, for the board to invest in further capabilities for the business and in upgrading league operations in line with its growth ambitions.
As part of this agreement, the Federazione Italiana Rugby will also become a member of Celtic Rugby.
After a delay in the payment of the players’ April salaries, Kings chair Lotiso Dotwana said he was planning a strategic review of the franchise.
The Kings know their continued presence in PRO14 will hinge on how they fare in the new season.
Such is the gravity of a prolonged lockdown that some observers believe Welsh rugby is at risk of going bust.
The PRO14 deal could not have come at a more opportune time.