Agents will want CVC’s cash to drive up wages
In the absence of facts, it’s fun to speculate, and when The Times broke the news that CVC wanted to invest in the Premiership, everyone had an opinion.
On balance fans seemed to be against the idea, but when it comes to supporting ‘our’ team, we tend not to want any change. Last week I wrote about the parlous state of the Premiership’s finances, so you can hardly blame the owners for wanting to take a serious look at an offer that could, on paper at least, be a game changer.
The figure of £550m that’s being bandied about as the valuation of Premiership Rugby seems to me to be pretty low, but it’s only an opening salvo, and that being rejected and a counter-offer coming in looks the likely way forward.
If you take a look at the profiles of the clubs’ owners, there are some hard-nosed businessmen among them and it’s difficult to envisage them letting their product go on the cheap. The big news isn’t the specific offer, but the confirmation that Premiership Rugby is very firmly in play, and I’m certain that other investors will be taking a close look.
If the Premiership owners acquire a new partner, whether it’s CVC or another similar private equity firm, one thing is certain: their focus will be on their future exit.
In a previous life I was in a business that had such an investor, and every board meeting revolved around building value, and how that would ultimately lead to the business being sold. Some people will undoubtedly object to that, but increasing the value of the Premiership surely has to be a good thing?
I’ve believed for a long time that the end of promotion and relegation was coming, and that it was just a matter of when it happened. A deal like the proposed one would seem to me to be a trigger for that. A bigger league would mean more rugby and probably bigger broadcasting revenues, and that’s what investors would want.
With London Irish being a shareholder, that might well be the price of their support for such a deal.
I do have a couple of worries about how the deal, if there is one, might pan out. I am violently opposed to what is, after all, the English Premiership playing more games overseas. By all means take a few pre-season or exhibition matches abroad if it will help the cause, but the serious stuff must stay in England.
My other worry is that the opportunity might be missed to increase squad sizes. Even with the current number of Premiership and European games, clubs are stretched to the limit in terms of resources.
We’re two weeks into a long season and already the injuries are mounting up. We simply need more players, and if the season got even longer then the pressure would increase further. A future deal would be the perfect opportunity to boost the size of the clubs’ squads.
Players’ agents will see this as a golden goose, and will try to further drive up salaries and their commissions, but this has to be resisted.
On balance the arrival of a serious investor into English rugby has to be a good thing – and it’s best for fans to come to terms with it, as it’s going to happen at some stage. This is just another logical stage in the professional game’s evolution.
Matt O’Connor’s departure from Leicester Tigers was hardly a surprise, although the timing was somewhat inept. It was clear last season that things weren’t going well, and some serious questions need to be asked about the judgement of the Tigers’ board.
After Richard Cockerill was fired, they put in Aaron Mauger as caretaker, but then after two months appointed O’Connor. Now he has gone after not much more than a season. On one level it’s good that their ambition is so strong, but on the other hand, why did they get it so wrong?
Exeter are a great, and brilliantly-coached team, but they should not be sticking 40 points on a Tigers side that was stacked full of quality talent.
It’s inevitable that O’Connor took the rap for Leicester’s decline, but hopefully the board members are asking themselves some serious questions.