CVC ready to get Six Nations bid back on track after PRO14 deal
CVC intends to get its bid to buy a stake in the Six Nations back on course, writes ANDY HOWELL.
Talks had been put on hold because of the coronavirus pandemic but the Luxembourg-based buyout group want to reopen them with tournament chiefs.
The Six Nations last month said it had “not agreed to either take a break nor to push through a completed agreement” with CVC, but discussions “obviously take into account the new environment”.
It’s understood CVC Capital Partners – the full name of the investment company – is offering around £300m for a minority stake in Europe’s rugby crown jewel.
When a deal was first mooted more than a year ago the sum was put in the region of £500m in return for around a 15 per cent share-holding.
It had been estimated the Welsh Rugby Union may receive up to £100m but that figure could be nearly halved with less money now believed to be on the table.
It has been claimed the investment, which would result in CVC taking over the commercial arm of the tournament, would be a “gamechanger”.
WRU chief executive Martyn Phillips, in an interview last year, said Wales was “open to the idea” but had warned: “Of all the decisions we have to make, it is the biggest one.
“All you do with a private equity deal is forward sell your profit. It looks attractive, but it will not be as attractive in three or four years. It has to be much more than that if you do it.
“The devil is normally in the detail. If you partner with the right people, you have to believe that you can drive revenues further with them than working on your own.”
CVC paid £200m in 2018 for a 27 per cent stake in Premiership Rugby, the umbrella organisation set up by England’s top clubs, and last week bought a 28 per cent share in the Guinness PRO14 for £120m.
“CVC’s belief in our sport is clear, its commitment is hugely encouraging and this investment is great news for our teams and for Welsh rugby as a whole, although we are under no illusions that Covid-19 has and will continue to have a significant impact on our organisation for some time,” said Phillips after the latter deal was signed.
CVC believes rugby’s television rights have been undervalued and have major growth potential if bundled together as a package for different competitions and sold to broadcasters.
It is understood to hope to complete the deal with the Six Nations within the next few weeks with the coronavirus pandemic not having lessened its belief in what it views as the money-making potential of rugby.
It has also held talks over its investment plans with World Rugby and Sanzaar, the body that represents New Zealand, Australia, South Africa and Argentina, and is negotiating over a near £2bn deal to acquire a minority stake in Italy’s Serie A football league.
CVC is a former owner of Formula One and Moto GP. It builds up the value of a company before aiming to selling its stake at a high profit, which is split between it’s investors.
It made a profit of almost £5bn on its sale of Formula One three years ago.