Premiership Rugby is in talks over whether to agree to a "game-changing, historic deal for rugby" by selling controlling ownership of the league to a private equity firm for about £275M ($355M), according to Owen Slot of the LONDON TIMES. The deal is regarded by insiders as "potentially the biggest step-change in club rugby since the game went professional 23 years ago," and is being compared to when the Premier League was formed in '92. The exec committee of league owner Premier Rugby Ltd. has been in negotiations for about a year with CVC Capital Partners, the private equity company based in Luxembourg which made about £8B from its decade-long ownership of Formula 1. PRL is owned by 13 member clubs: the 12 sides in the Premiership and London Irish. The 13 club owners will have a special meeting next Tuesday when the exec committee will present the deal with CVC. It is unlikely that a deal will be agreed and signed immediately but the meeting "could give the green light for the completion of the deal." Club sources indicated that their valuation of the Premiership is higher than CVC's offer. It is understood that, if the CVC deal is not approved, PRL has other "equivalent investment to consider from outside of private equity." The Rugby Football Union cannot stop the deal and thus prevent a "new, outside influence from becoming one of the key stakeholders in English rugby" (LONDON TIMES, 9/5).
NO DECISION YET: In London, Ahmed & Espinoza reported Premiership Rugby said, "Inevitably, this will attract interest but a decision is not imminent. This interest is of course very good news for Premiership Ruby and is a reflection of its growing international appeal." CVC was "not immediately available for comment." The proposed acquisition "could prove attractive" to the Premiership's clubs, "most of which are unprofitable." The league's main sources of income are a TV rights deal in the U.K. with BT Sport that is due to run until '21 and a sponsorship contract with U.S. insurance company Gallagher that was signed in April (FINANCIAL TIMES, 9/5). The BBC's Chris Jones reported CVC is looking to buy a 51% share, and values Premiership Rugby at £550M ($710M) (BBC, 9/5).
FOR THE BEST?: Slot wrote for some owners, history "may be irrelevant." What they will see is a deal that "could keep their club alive." Apparently, Bath Owner Bruce Craig is "not too impressed." The other owners will "surely think he has gone mad." It is no secret that club rugby in the Premiership does not "add up." The most recent annual club accounts show that, collectively, the Premiership clubs lost £28.5M ($36.8M). This is a proposal, not a deal. But "is it a good deal?" When "any big, faceless financial organisation comes into sport like this, it is natural to have reservations." Why "does it want us?" What "is it going to do with us?" And if you are Premier Rugby Ltd., losing £28.5M in a year, "what on earth does CVC, this giant of a private equity firm, see in little ol' us?" However, just from the point of view of what it could do for the Premiership clubs, it "could be massive." At least, it could be if the paperwork "delivers everything that has been discussed" (LONDON TIMES, 9/5).
