Leicester Tigers for sale

[backdoc]

"One of English rugby union’s most venerable clubs is to be put up for sale with an estimated price tag of more than £60 million amid growing interest in the sport.

The Times has learnt that Leicester Tigers, winners of a record ten English championships and twice crowned European champions, have appointed Zeus Capital, the advisory firm, to run a formal sale process.

The decision, expected to be announced today, is understood to have been taken after the recent sale of a minority stake in Premiership Rugby, England’s top league, by CVC Capital Partners, a private equity firm, sparked interest in Leicester.

CVC paid an estimated £230 million for a 27 per cent stake in the league, handing a windfall of about £13 million to each of the 12 clubs.

The club was formed in 1880 and moved to its present Welford Road home in 1892. It remains the best-supported club in the Premiership with more than 11,000 season ticket-holders.

The biggest shareholders are Tom Scott, 44, a businessman and lifelong fan, holding 46 per cent, and Peter Tom, 78, its chairman, who made 130 first-team appearances, owning about 9 per cent. It also has about 10,000 shareholders, mainly supporters, with between 250 and 300 shares.

Although an outright sale to private equity or a family office is regarded as the likeliest outcome, the club also will consider a partial sale.

There is growing interest in the game with the Rugby World Cup, being held in Japan this year, the third biggest spectator event after the Olympic Games and the Football World Cup.

Leicester has long been one of England’s top clubs, though it has underperformed recently, culminating in an 11th place finish last season, only one place above bottom team Newcastle.

Its turnover is about £20 million. Like most clubs, it tends to make a loss, but the Tigers’ share of the CVC Premiership deal means it is debt-free."

[Neils]

Somebody tell SISU - ready made stadium.

[backdoc]

Bearing in mind the financial stability that Tigers have, is this really saying that they cannot compete with the 'off menu cuts' available at some other clubs when it comes to player recruitment?

A direct result of Sarries, Bristol and Bath recruiting power.

[Heathen]

It has a lot to do with it. When you look at the wealth of some club owners, to whom £50M+ is small change, the rest are at a disadvantage.

[BG]

Wow - Didn't see that coming.

When there's not much of interest on our forums I do visit the Tigers and Saints forums as they sometimes have some interesting topics and there has been an underlying sense of dillusionment amongst the fans about where Tigers are going. They feel there has been massive missmangement from the very top.

Of all the PRL clubs, Tigers should be the club that should able to prosper given their attendances and STH numbers.

It is slightly worrying to think that the club is being put up for sale with the possible reason that they feel they can't compete with the richer owners in the PRL. Or can they foresee things getting worse once the CVC money runs out and overall PRL income doesn't increase (which is what I think will happen)

The spectre of a private equity firm buying tigers should worry Tigers supporters.

SISU would love to buy it.. Leic own the stadium and land (I think they have an outstanding loan repayment on their newest stand) in the middle of the City.. it must be worth a fortune! Maybe Tigers could ground share with Leic FC 

I might have a look on their forum and make a few posts as some of their supporters have been very acerbic regarding Wasps drastic re-location due to financial reasons.

What I find interesting is that it appears they don't have any potential suitors.. else the sale and purchase would have been announced together

[Rossm]

SISU would love to buy it

But only if on the cheap

[BG]

SISU would love to buy it

But only if on the cheap

£60m seems a lot considering they are making a loss, but they presumably have a massive asset sheet but as with all sports clubs, a lot of the perceived value is associated with the success of the club on the pitch.

It maybe that the current owners felt the time was right to sell with the CVC money coming in.. but this is a very short term cash injection that will most likely be swallowed up by most clubs over a 2 - 3 yr period.. after which that money has gone and potentially each club will face reduced PRL income due to CVC taking their 27% out.

A "SISU" type  entity might like to invest but they will have one eye on the current balance sheet and the asset value for the various land tigers own.

[Neils]

Also depends how much SISU are paying for rent over a few years. Might make it viable whilst sticking one on us.

[Trevs Big Tackle]

Are there any restrictions / guidelines over who can own a rugby club? I understand football has tried to bring in a "fit and proper" code, or something. Sisu may have snuck through in the past but I can't see any governing body being too thrilled at having Sisu, or a company with a similar past, buying a club now.

Guidelines might be relaxed if a club faces bankruptcy, like CCFC were before Sisu. But Leicester don't seem to be at any risk so can pick and choose their new owner with more consideration.

[Brandnewtorugby]

I think this could drive some of their support away, especially supporter share holders, they are not in it for profit. There were some very harsh words from some of their supporters about Wasps moving and calling Wasps a 'franchise'. With an almost ringfenced league, we will take a big step towards all actually being franchises. Then for a team that many supporters own a bit of being sold from under their feet, for some I suspect it will be a step too far.

[Chunky24]

I wonder if the Thai owners of the football club might get involved, they have done a lot in and for Leicester.

[BG]

There is a "fit and proper" ownership rule in football but from what I can see its completely ignored. I'm not sure if there is such a thing in rugby.

Some of the Wuss supporters are still unsure and nervous about the intentions of their new owners who are also owners of Morecombe FC.

Would a SISU type entity be permitted to buy a football or rugby club now. I can't see any league or union standing in the way of new owners unless there was a blatant conflict of interest.

I think a proposed buy-out of Glos was blocked but it would be quite easy to hide who the real investors are looking to buy a club.. which comes back to a short conversation I had with someone on the other site.

No-one knows who the investors are behind SISU or what other things they invest in.

There is a distinct possibility that the SISU hedge fund was set up with the backing of an entity that wanted to keep the origin of the investment secret.. with the sole purpose of buying a potential premiership football club.

An entity that might otherwise not be allowed to buy an English football club.

[Rifleman Harris]

I may be wrong, but I believe the Nottingham Forest owner has been charged with match fixing in his homeland (Greece). Some charges have been dropped, others have gone forward to the next stage...but they were all in place when he passed the fit and proper persons test. 

Munto was a fictitious consortium fronted by a con man who was wanted in several countries (and currently behind bars). They passed the Fit and Proper Persons Test, even though some members didn't even exist!

I would say it is meaningless test. At the end of the day anybody turning up with some cash (real or imagined) will be waved through to ownership.

[Trevs Big Tackle]

Extraordinary! But, sadly, not at all surprising.

[baldpaul101]

There seems to be an assumption that CVC will be able to grow interest in The Prem and increase everyone's cash income. On what basis do they think that exactly?

They are scheduled to take 27% of prem income, so will need to grow the income to the Prem as a whole by at least 30% before any team sees any more cash surely?

They made a lot of money from F1 but left the sport in mess with teams going bankrupt and races moving from traditional European circuits to whoever had the most cash, Russia, the Middle East & the far east mostly. They reportedly made little effort themselves at promoting the product, just squeezed everybody else involved to take their cut.

Given that & the fact that professional rugby has so far failed to make even reasonable profits anywhere, how exactly do those owners & administrators involved think this is going to end well?