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SBD Global/April 14, 2014/Leagues and Governing Bodies

European Rugby Strikes Deal Establishing Three New Elite Club Competitions

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European rugby has announced three new club competitions that will replace the Heineken Cup.
European rugby experienced a "'historic' new dawn" after the "striking of a long-awaited deal to establish three new elite club competitions to replace the Heineken and Amlin Challenge Cups next season," according to Gavin Mairs of the London TELEGRAPH. After almost two years of "at times torturous negotiations, the nine stakeholders of the European game assembled" to iron out the "remaining minor areas of contention to sign a heads of agreement for a new eight-year deal that includes a two-year notice period." The deal establishes three new "cross-border tournaments, the European Rugby Champions Cup, the European Rugby Challenge Cup and the Qualifying Competition." The agreement confirmed that the tournaments would be "run by a new association, which replaces the Dublin-based European Rugby Cup Limited, called the European Professional Club Rugby, based in Switzerland" (TELEGRAPH, 4/10). REUTERS' Keith Weir reported the European club rugby competition "will not have a title sponsor but instead seek a group of backers, emulating a model that has proved lucrative for Champions League" football. Premiership Rugby Commercial Dir Dominic Hayes said that the plan was to "look for backing from up to six companies" to maximize income from the competition. Hayes: "We already know that there is enormous potential to drive the commercial value of the competitions." Heineken reportedly pays around $13.9M per season for its naming rights. Bringing in a "group of sponsors would not only provide additional revenue, but also allow the competition to be marketed to a wider audience across a range of businesses." The organizers, however, face a "race against time to get sponsors signed up in time for the start of next season" (REUTERS, 4/11).

U.K. TV RIGHTS: In London, Paul Rees reported BT Sport and Sky have agreed to a "deal for the British rights, which will be confirmed when Sky is formally released from its existing contract" with the Heineken Cup organizers, European Rugby Cup Ltd., and an agreement for the TV rights in France is "close to being signed." That is expected to "raise the value of the tournament's international rights" (GUARDIAN, 4/12).

CLUBS DEMAND COMPENSATION: Also in London, Hugh Godwin reported England's Premiership clubs are demanding £14M ($23.4M) from the Rugby Football Union as "compensation for the disruption caused by next year's World Cup in England and Wales." The clubs, "having paid tribute" to RFU CEO Ian Ritchie for "smoothing the new European Professional Club Rugby (EPCR) accord," are set to test the resolve of the Int'l Rugby Board, with plans to "create a World Club Cup" in June '18. The month-long tournament, "which has been discussed" with broadcasters Sky in the U.K. and Supersport in South Africa, would see the eight quarterfinalists from the European Champions Cup "meeting eight crack southern-hemisphere teams from what by then will be the Super 16" (INDEPENDENT, 4/13).

'HARDLY A SURPRISE': Also in London, Steve James opined the details "were hardly a surprise, and in both rugby and financial terms it is hard to quibble with the changes." Qualification and distribution of revenues will "now be significantly fairer." Both competitions -- the second-tier competition will be called the European Rugby Challenge Cup -- "will now be stronger and more lucrative." What "is there not to like?" (TELEGRAPH, 4/12).
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