Rugby’s future? Private equity buying up players
Alex Lowe, Rugby Correspondent
Tuesday December 07 2021, 12.01am, The Times
One of the deals that landed Saracens in trouble with the authorities during the salary cap investigation was Nigel Wray’s decision to buy 30 per cent of Maro Itoje’s image rights for £1.6 million, giving him a share of the England lock’s future commercial earnings. The authorities concluded that the deal had been overpriced by £800,000 and was tantamount to income that should have been recorded under the salary cap.
Saracens were punished heavily for the full scandal, fined £5.4 million and relegated for a season from the Gallagher Premiership, yet Wray was on to something. Nick Garcia, the chief executive of Ospreys, predicts a future whereby private equity firms invest in players, in addition to clubs, leagues and unions.
It is not an entirely new concept in sport, with recent high-profile examples in football of businessmen investing in the economic rights of players.
The brands of stars such as Cristiano Ronaldo, LeBron James and Tom Brady drive a new type of fandom, where followers are loyal to the player ahead of the team. Garcia has a vision for rugby moving in the same direction.
Formerly in charge of expanding Manchester City’s global network of clubs, Garcia is a director of Y11 Sports & Media, the investment firm based in Hong Kong that bought a 75.1 per cent stake in Ospreys last year.
Advertisement
His mission with Ospreys is to turn the Welsh region into a “global rugby powerhouse”, an ambitious project he sees being driven by improving fan engagement and creating superstars of the players.
“Will we see private equity start to get into player rights? I think 100 per cent we will. The player management side of things is a huge opportunity. The ownership of those players will be an interesting place going forward,” Garcia said. “Roc Nation, which is owned by Jay Z, have gone big into athlete management [including Itoje], so it is already happening.”
Eddie Jones, the England head coach, recently suggested that off-field commercial interests can be a distraction to young players, and have a detrimental effect on their high performance, but Garcia disagrees.
“There’s a split opinion in rugby right now about whether players should be the stars. Maybe that goes back to the old values of ‘No one’s bigger than the club’. In reality, sportspeople are stars and do have bigger social media followings than clubs,” he said. “I think that’s great, and I will do whatever I can to make our players into stars.
Sponsored
“Rugby needs more younger fans. We are working very hard to say, ‘What do these kids want to experience when they come to a game? Is it club first or player first?’ I can tell you it is the latter.
“How do we build that up? Someone said to me, ‘Would you centrally contract the players in Wales?’ I said, ‘Absolutely not.’ Players are assets, not liabilities, and that’s a really, really important thing for sports organisations.”
Garcia said that Y11 has no immediate plans to start investing in player rights, but the company’s ownership of Ospreys is thought to be just the beginning of its interest in rugby.
Like CVC Capital Partners, which has spent close to £1 billion buying a stake in Premiership Rugby, the United Rugby Championship (URC) and Six Nations, Y11 sees growth potential in the sport and the possibility for external investment to drive rugby into its second phase of professionalism.
When Garcia was approached to become a director of Y11 and charged with “turning around” the Ospreys as chief executive, his initial reply was, “I am not a rugby guy.” His sports business experience had been working in football, F1 and golf. But Y11 did not want a rugby guy.
“That piqued my interest,” he said. “When I look at rugby, it is a phenomenal sport and commands a really interesting demographic — but not a lot has changed. Ospreys is a big rugby club. It has a great brand, it has won a lot of trophies; the URC is really exciting — five countries, two hemispheres — and we are in Europe. Everything looks brilliant, so it should be smashing it. But it’s not.
“I take a look at the Ospreys and see a lot of the problems that were in football 15 or 20 years ago.”
The City Football Group now includes 11 teams, spread from Bolivia to India to Australia and the United States. Y11 sees the benefit of a global rugby portfolio and has been linked with a deal to buy Melbourne Rebels.
“Rugby is a really exciting proposition,” Garcia said. “We think what CVC is doing is smart. We have a sleeping giant and the opportunity for that is immense. Our vision [for Ospreys] is to become a global rugby powerhouse.
“We have a partnership with Wave TV in North America, which is a youth sports site, and since we started that partnership a year ago we have had 17 million views of our content.
“I think fan sentiment is changing, especially when you go global. When I was at City we talked about followers as well as fans. We had 400 million followers around the world, probably now closer to 650 million [at City].
Advertisement
“They were 97 per cent outside of the UK. There was more of an equal male/female split and they probably followed up to four clubs — where the players were moving to.
“We’ve now got a three-year roadmap [at Ospreys] that looks at how we will start uncovering these global fans. It will be digital and content led. Winning is clearly the engine that drives everything.”
Ospreys host Sale Sharks in the Heineken Champions Cup on Sunday, when they will be reliant on “core fans” buying tickets, and Garcia wants to improve both the in-stadium experience and television coverage.
“Rugby is a complicated game and as a barrier to entry that is a challenge. We can educate more on what’s going on in the game, pull out the moments and explain it better,” he said.
“We need to be feeding insight and data. I know that the URC will look at that because they’re trying to drive that younger audience without alienating the core.”
Topic: Rugby’s future? Private equity buying up players (Read 2189 times)
Always a Wasp