Financial ‘dire straits’ open door to CVC buyout

PREMIERSHIP clubs are bracing for an emergency buyout by private equity firm CVC if the league fails to cope with the loss of revenue caused by coronavirus.

Millions more pounds will be lost through matchday takings and broadcast rights if the league goes into long-term lockdown.

Club finances were already tight but the epidemic could force some to the brink of collapse. CVC bought a 27 per cent stake in the Premiership for £230million and there is a growing feeling among clubs that the private equity firm will increase their investment during the market crash.

There could also be an opportunity for the RFU to bail out clubs and propose a central-contracting model, however, the struggling governing body are unable to compete financially with CVC.

Players are already signing up to collective 25 per cent pay cuts as clubs struggle to make ends meet.

Central funding is also under threat because BT Sport have no games to broadcast — leaving some organisations staring into a black hole. ‘There are so many ways things could go in these dire straits,’ said Newcastle fly-half Toby Flood (right). ‘If the system gets through and stays in one piece until September, I don’t think anything drastic will happen.

‘If a couple of clubs get really close to the brink, we could see a big, big shift in the dynamic. What you don’t want is kneejerk reactions but, if clubs can’t afford to pay their wage bills, then that’s exactly what you might get. It could be pulled in the CVC direction or the RFU could come in and say we want the Championship, Premiership and everything else as a singular unit for the good of the game. This is a great time for a private equity firm, if we ever need one, to dangle a carrot in front of a Premiership clubs. Some people are opportunistic in times of trouble so they may offer the same amount of money as last time for a larger stake.

‘Alternatively, the RFU could throw out a big safety blanket of a loan of four or five million.’