6N to CVC

[Neils]

Its an Owen Slott article so behind the paywall. If nobody can cut and paste might have to buy a paper in the morning unless the BBC ...... nah that is days away!

[backdoc]

"The Six Nations unions have agreed to sell a significant share of their business to CVC Capital Partners, the private equity firm, who have already bought a stake in the Gallagher Premiership and have nearly completed a similar deal with the Guinness Pro14.

CVC has therefore succeeded in gaining an influence over European rugby that no outside organisation has ever had before.

The six unions that make up the Six Nations Championship have agreed to pool all their business into one commercial entity. This means that CVC does not just own a share of the winter Six Nations Championship, it also has a stake in the autumn internationals and the summer tours.

The deal with the six unions is now in exclusivity and going through the transactional technicalities which all sides expect to be completed after the World Cup. The deal with the Pro14 is slightly ahead and is expected to be completed in October.

CVC is buying a 15 per cent stake in the commercial arm of the six nations’ business. The agreed figure is more than £300 million.

The private equity firm will pay £115 million for a 27 per cent share of the Pro14.

The only significant player in European rugby that has not done a commercial deal with CVC is the French professional club competition, the Top14.

As CVC is now in a commercial partnership with two of the three leagues that constitute the Heineken European Cup, the European competition is, to a large extent, already part of CVC’s European business.

Now that all the home unions, and their clubs, are commercial partners with CVC, it is likely that the British and Irish Lions will be a successful target for CVC’s rugby portfolio too.

CVC believes that it can crank up the value of its rugby holdings by amalgamating all elements of rugby business. Its biggest gain will be to wrap all the TV rights from its various different competitions and sell them as one mega-package.

The Six Nations Championship is currently on free-to-air TV. A commitment will be made to retain free-to-air broadcasting though it likely that some of the Championship will move to paid-for TV channels."

[Neils]

Thanks. A little worrying where this is all going.

[BG]

Thanks. A little worrying where this is all going.

I can't help but feel the same. Its good that there is now one commercial enterprise that has a level of influence in the various competitions/leagues but they aren't investing huge amounts of money for altruistic reasons. They will be looking to take as much money out of the sport for themselves.

If they manage to increase turnover/profit then all well and good but having secured a % of the various leagues etc then they've guaranteed an income already.

I dare say they've worked out they will get their investment back over a 10yr period regardless of whether they manage to increase turnover or not.. and if they don't, the clubs are going to be in big trouble (along with the prospect of clubs being given the unofficial green light to find other ways to increase the disposable income of players which most clubs simply can't afford to do, but will feel they need to do so to compete with other clubs).

Realistically how much more are BT or Sky going to pay for TV rights. There is a limit to how much subscribers are will to pay for TV subs to watch rugby as well.

CVC might point to expanding demand in other TV markets but realistically is there much demand for UK club rugby outside of the UK. Apart from ex-parts scattered around the globe I'd argue very little.

The fact that NBC (or is it CBS??) felt they could only charge $60 for a season subscription for EPL viewing says it all about the current demand in the US.

Rugby demand in the US will be limited to watching their national team be that in 15's or more likely 7's.

[baldpaul101]

Whilst CVC do this stuff for a living and we ( well I ) don't, I cannot see where extra income is going to come from. Given the poverty of the home unions in general at the moment I think they could all find themselves in trouble if revenue doesn't go up......

[westwaleswasp]

Am I the only one worried about this?

[matelot22]

Am I the only one worried about this?

No you're not. This could put cash at the forefront of the game and ruin it in the way domestic football had been.

[BG]

Whilst CVC do this stuff for a living and we ( well I ) don't..

You say that but do they actually? They invest in all sorts of businesses around the world but apart from F1, sports isn't something they get involved in.

In the case of F1 they effectively did  nothing but employed Bernie Ecclestone to arrange contracts with circuits, teams and TV companies and then sat back and counted the money rolling in. During their onwnership they took billions and billions out of the sport but it would be interesting to see how many F1 teams failed or were bought out on the point of failure during that period. I wouldn't be surprised if the number was near 10. F1 in my opinion is in a worse position now compared to the period before CVC became involved.

CVC will presumably employ someone to sit on the PRL board but if its the same characters on the PRL board is much going to change?

I suspect Sky will be awarded the next tv contract but are they really going to pay a huge lump more than BT? I doubt it.

[baldpaul101]

I think most people will be worried:

1. because we dont like change
2. as stated above & on previous discussions about CVC on here, they may do it for a living, but how they do it may or may not work for rugby
3. "commercialisation" is a worry given what has happened to other sports

However, I don't think theres a lot we can do is there?

[welsh wasp]

The big issue will be TV rights. Or should I say TV & internet rights. Potential customers are not just Sky & BT but Amazon & maybe Disney. Would CVC offer one big package or make more money by splitting it up. The latter seems more likely.
The likely losers will be non-subscription channels like the BBC and, maybe for future RWCs, ITV. Roundball has disappeared from BBC etc other than highlights.
And the concern seen in cricket about fewer people playing will extend to rugby as well.
Have 6N & Premiership Rugby learned nothing from what happened to cricket?

[Neils]

CVC are allegedly working with Sky. I can see them bringing Pro 14 into a bundled rugby package. 6N - will be interesting to see if the free to air is dropped.

[BG]

If Sky's approach in F1 is anything to go by they are extremely protective of their "exclusive" broadcasting rights. F1 has a live streaming service but its blocked in the UK because of Sky.

I doubt Sky themselevs will want to offer rugby only or rugby streaming packages either.

If another company (amazon, disney , netflix ) wants to stream/broadcast matches then I can't see Sky allowing it being legally accessed here and how much is that service worth if not being access by the UK market?

6n is almost certainly going to be bundled to Sky as well.

Sky did at one point have the rights to show England home 6N games but not for the other unions. You would think CVC would want to bundle all the unions together which might be a difficult task as naturally Eng and Fra will want a bigger slice of the pie.