British & Irish league a step closer with CVC deal close to completion

THE multi-million pound deal between the Guinness PRO14 and CVC, which could lead to the creation of a British & Irish League, is very close to completion.

Under the agreement, investment company CVC would buy 27 per cent of the competition’s economic rights for a one-off fee of around £90m.

That would mirror the terms of their deal with England’s Gallagher Premiership, where they have acquired a similar percentage for about £200m.

With the PRO14, it would mean that 27 per cent of the tournament’s income would be passed on to CVC each year.

At present, that equates to about £7m per annum.

The league is owned by the three Celtic Unions - Wales, Ireland and Scotland.

So they would all need to agree to the CVC buy-in.

But my understanding is they see it as a good commercial deal and that the agreement is “95 per cent done”.

Once CVC have secured their stake, then the question is what next?

They will want a return on their investment in the two leagues and to potentially get to a point where they will be able to sell their shareholding for a profit.

To do that, they will need to maximise commercial revenue.

There have already been media reports about the possibility of a play-off between the winners of the two competitions.

And looking further down the line, it’s understood their preference is for the creation of a money-spinning British & Irish League.

That would provide them with the opportunity to generate greater income through TV and sponsorship deals.

The likeliest format would be two conferences of 11 teams, made up of 12 English clubs, the four Irish provinces, four Welsh regions and two Scots, with an end-of-season play-off set-up.

Clearly though, there are a number of obstacles that would have to be overcome.

To start with, all four countries would have to agree to come on board.

So CVC would have to put together a commercial deal that would be too good for them to turn down.

PRL – the umbrella organisation for the English top-flight – would be likely to focus firmly on the economics.

As a result of their deal with CVC, they will have the capacity to invest in their facilities.

The question then is whether this new financial strength would be improved or diluted by expansion?

Only one Gallagher Premiership club – Exeter Chiefs – posted a profit in the last round of accounts. But that was before the benefits of the CVC deal.

If yearly income could be increased by expansion that would be very attractive, but it all comes down to the figures on the table.

For their part, the Welsh regions would jump at the idea as it would provide new commercial opportunities.

It would also give their fans the regular Anglo-Welsh fixtures they so crave.

Scotland would probably take a phlegmatic approach, looking at what is best for them both financially and in playing terms.

But the IRFU could take some persuading.

The current set-up works well for them, so they may well be resistant to change.

They are able to use the PRO14 as preparation for the Champions Cup, which is very much their priority.

They can rest star players, keeping them fresh for Europe, while still being able to more than hold their own in the PRO14 through their strength in depth.

Going into a British & Irish League might make it more difficult to do that, while potentially reducing the control of the IRFU.

There’s also a question over what impact such a new competition would have on the Champions Cup.

Might it see it reduced in terms of scale and status?

The IRFU would be unlikely to be comfortable with that.

Taking the soundings of Irish fans over the weekend, there was a lot of opposition to the idea of the new league.

Generally, they appear happy with the status quo and are wary of the proposals.

The fact Welsh fans are so keen on a link-up with the English clubs also provokes a strong reaction in the Emerald Isle.

If the Irish opted not to come on board, it would be very doubtful whether any new league could get off the ground.

Without the likes of Leinster and Munster, it wouldn’t have the same commercial appeal.

Then there’s the issue of the Italians and the South Africans? What happens to them?

Would the Celtic nations be prepared to ditch the Italians, who have been part of the PRO12/14 for the best part of a decade?

There is also a six-year deal in place with the South African Rugby Union, so that would have to be resolved.

A lot of issues to be tackled, then.

But the imminent involvement of CVC in the PRO14 means anything is possible and there are likely to be eventful times ahead.