CVC bid to invest in Six Nations may lead to conflict of interest: lawyer
CVC Capital Partners’ bid to invest in the Six Nations – which would appear to kill off World Rugby’s proposed global league – could lead to a conflict of interest, according to a leading sports lawyer.
CVC’s offer for 30% of the Six Nations for around £500m comes only three months after it bought 27% of Premiership Rugby for £230m. It also comes on the eve of World Rugby’s emergency meeting on Thursday where attempts will be made to salvage the governing body’s proposed Nations Championship.
Having acquired the commercial arm of Premiership Rugby, it is expected CVC would look to do the same with the Six Nations. But the private equity firm may leave itself open to challenge, depending on the nature of its proposed investment.
“If they are just providing funds and are simply there as a bank, then no,” said Darren Bailey, part of the sports law team at Charles Russell Speechlys and previously the first legal director of the then International Rugby Board. “However, if they have the ability to influence, to make assessments on scheduling [of fixtures] which impacts on both competitions, then I could see an argument.”
World Rugby’s proposal of a 12team tournament is expected to be rejected on Thursday amid opposition from within the Six Nations, even before CVC’s bid was tabled. The Six Nations instead favour “Project Light” – a proposal to pool TV rights from the championship and autumn internationals – which they believe can generate more revenue than the Nations Championship. The Six Nations also insist CVC’s offer has not been accepted at this stage and is not the only one on the table.
Crucially, there is opposition from within the Six Nations to promotion and relegation, which is a fundamental part of World Rugby’s proposal. In addition, leading players have voiced their opposition on welfare grounds while the French and English clubs have threatened legal action on the basis it contravenes the global calendar agreed at a meeting in San Francisco in 2017.
However, CVC’s offer to the Six Nations – and its timing – has been perceived in some quarters as an attempt to eventually hijack the Nations Championship. World Rugby has previously dismissed the possibility of private investment and it is believed to have lined up a broadcaster for its global league which would generate up to £7m in revenues for all nations involved. Effectively, World Rugby does not believe it needs private investment but CVC’s latest bid considerably weakens the governing body’s hand at the negotiating table on Thursday.
Bailey believes CVC’s offer to the Six Nations could result in a broadcasting deal with a tech giant such as Amazon. “I suspect this is a longer-term broadcast play,” he said. “Their idea would be real global growth to try and make as much money as they can and keep 30% of the profit. That could mean less rugby on terrestrial TV.”
The southern hemisphere nations are believed to be in favour of World Rugby’s proposal and will be desperate for the Six Nations to join them on Thursday. They do not have the bargaining power of the Six Nations but a boycott of the autumn internationals – New Zealand’s trip to Twickenham in November generated well in excess of £10m for the Rugby Football Union – has been mooted as a nuclear option. “The northern hemisphere nations have got to be mindful, even with their Project Light, that they depend on New Zealand, South Africa and Australia showing up to play,” Bailey said.