CVC Deal is Done

[RBB]

https://www.bbc.co.uk/sport/rugby-union/46626471Premiership Rugby has moved into a "new era" after a deal was concluded for private equity firm CVC Capital Partners to invest £200m.

CVC have bought a minority shareholding, understood to be about 27%, after member clubs had previously rejected an offer to buy 51%.

"This is a landmark new partnership," Premiership Rugby chairman Ian Ritchie said of the deal.

"It is positive news for the league, the clubs and the game."

He continued: "It takes the clubs to a new level and is the heralding of a new era."

CVC has previously led investments in Formula 1 and elite motorcycling series Moto GP.

"They know global sports, and that is one of the things that attracted us to them," said Premiership Rugby chief executive Mark McCafferty.

"They have a track record in helping sports develop."

Premiership Rugby says the extra money will not result in a hike in player wages, but will instead go towards improving facilities at club level and growing the league globally.

"They key thing for the next few years is to build the facilities, the infrastructure and the investment in central marketing," added McCafferty.

Ritchie, who was previously CEO at the Rugby Football Union, says the deal will not damage relations between the clubs and the RFU.

"There has to be a partnership between clubs and the RFU, and that is the best way it works for English rugby," Ritchie added.

"I see this as complementary and not in any way competitive."

[BlackCountryWasp]

Good news that it's been concluded. Sensible use of the new money is the order of the day. I'd use it for the training ground and whatever is left to service some of the debt. Two things that will aid the long term future of our club.

[wasps]

So, £200m investment, 12 clubs.
Even if every penny of that money is spread equally among the clubs, it's just over £16m each... However I doubt that every penny will find its way to the clubs.

Have there been any figures announced about how much the training ground will cost?

The £16m is about half what is owed to Derek and about a third of our net debt.


It's obviously hugely handy and clears some of our debts, but let's not think it's gonna make us super profitable

[Vespula Vulgaris]

I see this as a ringing endorsement that the Wasps have developed is the right way. We've got the big venue, we've got the off field business support, and we're in prime position to succeed if CVC do to rugby what they've done to other sports.

Most clubs will be looking at spending this money improving their facilities, we're already way ahead on that path thanks to Derek. If this cash injection eases the pressure on his bank balance and allows us to move on with the training centre I'll be very happy indeed.

More than that though I'm excited to see how rugby will develop as a spectator sport now. Big changes are coming, and they're gonna bring success for the club's that manage to ride the wave.

[RBB]

I may have dreamt this, but I think that Premiership Rugby (as a collective body) is made up of the current 12 plus London Irish, so 13 clubs in all, Making the total £200m / 13? I also assume the money will be equally distributed/allocated. Of course I may have dreamt it.

[Rossm]

The Guardian reports 'about £230 million'. The Beeb on the other hand is more conservative with 'more than £200 million'. Hopefully the proceeds (could be up to £18 million per club) will not be splurged on players' wages.

[baldpaul101]

So what exactly do CVC get out of this?
Clubs don't make a profit, but does PRL?

If it does and therefore each club takes a cut of that profit, and CVC will now take their share of that profit won't that mean less for the clubs?

Is the future based on CVC somehow "growing the game" and therefore PRL making more profit?

[Rifleman Harris]

I think that is exactly the plan.

[baldpaul101]

Bit risky, but I guess that's the sort of gamble Investment firms take.

[Raggs]

PRL are the ones who get the television money, and the RFU money, and distribute it. I don't know if CVC get a bite of the RFU money, but they'll definitely get a bite of TV revenues.

[BG]

PRL are the ones who get the television money, and the RFU money, and distribute it. I don't know if CVC get a bite of the RFU money, but they'll definitely get a bite of TV revenues.

The RFU money and TV money goes through PRL who then distribute it to the clubs. If CVC have bought 20 - 30% then that's 20 - 30% less revenue for each club (pro rata) as CVC will be taking their cut. The clubs must be hoping that CVC can somehow increase TV money by said 20 - 30% by reaching into new markets.

The good thing is, the clubs still have a collective majority share of PRL.

[wasps]

If I recall, they wanted a controlling share in prl, but were knocked back.

The idea now is that they get their 27%, prove that they can grow the game over the next few years and generate more income, at which point they can purchase a larger percentage.... Potentially a controlling percentage.


So, if CVC want to make money, it's about them promoting and growing the game