THE long courtship between CVC Partners private equity house and the Guinness Six Nations rugby championship appears to be finally moving towards consummation, with Fédération Française de Rugby [FFR] President Bernard Laporte telling the organisation’s AGM this weekend that a deal for a 14.5 percent stake in the tournament is on the precipice of being agreed.
The transaction was expected to be concluded soon after this year’s Six Nations but was delayed by the global coronavirus pandemic. In an interview with Midi Olympique, Laporte, who is also World Rugby vice-President, said that France will pocket around €75 million (£67.5m) over five years, and indicated that the distribution would be weighted ‘in proportion to the number of licensees in each country’. He also said that there had been a small reduction in the value of the deal due to the uncertainty caused by the Covid-19 crisis.
While the deal will provide a valuable cash-injection at a time when rugby is feeling the pinch of a global economic downturn, there is concern about whether CVC assuming the commercial rights will herald a shift away from the current free-to-air broadcast arrangements for European rugby’s flagship competition, which could have a significant negative effect on the sport’s visibility (and therefore general health) in the longer-term.
“We are still in negotiations because of Covid,” Laporte told Midi Olympique. “CVC wanted to review its offer, which is logical considering the period without a match that we have just experienced.”
“A Six Nations Tournament committee is in charge of the file. They just made a counter proposal last week. A meeting is to take place in the coming days, but I am confident that within two months it will be signed.
“We are talking about a capital gain of around 14.5% in a company created by the Six Nations Tournament committee in which commercial rights will be managed.
“The sum invested by CVC will be distributed among the six shareholder federations in proportion to the number of licensees in each country. In the first discussion, there was talk of 79 million euros over five years. With the renegotiation, we will be closer to 75 million, but this represents a substantial sum which will allow us to continue the redistribution to the clubs and to carry out new projects.”
Six weeks ago, the Guinness Pro14 agreed a deal with CVC for a 28 percent stake in that league which was worth ‘north of £20 million’ to the SRU, and around £30 million to Ireland and Wales, who have four teams in the competition as opposed to two. CVC also bought a 27 percent share in the English Gallagher Premiership for around £200 million in December 2019.
The private equity firm previously owned – and made a lot of money out of – Formula One racing between 2006 and 2017, but not everybody involved with the sport was happy with how it was managed during that period, with Bob Fernley, former principal of the Force India F1 team, accusing CVC of “raping the sport”.
“All their actions have been taken to extract as much money from the sport as possible and put as little in as possible,” he said in 2016.