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Volume 7 No. 149

Finance

Premiership club owners are likely to vote for a proposal to give a minority stake to the private equity firm CVC in return for more than £200M ($254.8M), "two months after they turned down a takeover bid," according to Paul Rees of the London GUARDIAN. CVC, which held a majority stake in Formula 1 between '06 and '17, came back with a new offer that "would mean it ran the commercial arm of the Premiership but not the league itself." This would keep the agreement within World Rugby’s regulation governing ownership and mean the 12 clubs "enjoyed a greater proportion of profits than under the original bid." Premiership Rugby held talks with CVC in recent weeks and it is understood a firm offer will be tabled at the next board meeting, which is to be attended by the clubs’ owners, on Dec. 11. The 12 would each receive "an immediate cash injection" of around £20M ($25.5M) at a time when only Exeter is in profit. The debts of most clubs have grown in recent years, "largely because of wage inflation which has accounted for most of the growth in turnover." CVC’s money "will not go into the pockets of players because the salary cap is pegged for the next two seasons but will be used to improve infrastructure and pay off debt." Bath is "hoping to redevelop the Recreation Ground," Harlequins are planning a new stand and Leicester hopes to start a £22M ($28M) project next summer to build a hotel and a car park alongside its Welford Road Stadium. Contracts have been exchanged with a developer and the project "hinges on planning permission." A question the owners "have to weigh up is whether the cash injection would leave them worse off in the long term." They have to balance the money they would receive from CVC against the reduction from central funds each year -- the money which is generated from TV and sponsorship deals for the league. How long would it take to make up the £20M? CVC believes the tournament has "undervalued itself and that the TV market in particular has been underexplored" (GUARDIAN, 11/27).

The RFU announced there was a £900,000 overspend on the national team in '17-18.
Photo: GETTY IMAGES

Eddie Jones was ordered to "moderate his spending" in the build-up to the 2019 Rugby World Cup after the Rugby Football Union announced losses of £30.9M ($39.3M), according to John Westerby of the LONDON TIMES. Jones "safeguarded his job" as England's head coach with three wins in four autumn internationals but the RFU put "strict" measures on his budget after a £900,000 ($1.15M) overspend on the national team. The governing body's losses for '17-18 were offset by a "one-off cash windfall" of £31.6M ($40.2M) but the union is "braced for a harsh economic future," which is expected to lead to a £13M ($16.6M) reduction in overall investment. RFU CEO Steve Brown said, "It is true that the England budget in the previous financial year was overspent. ... It did happen in the previous financial year, but we have got control of it and everyone is clear about that from Eddie and his team downwards. We have been very clear there is a strict budget to the World Cup that is more than sufficient for us to deliver a successful outcome" (LONDON TIMES, 11/27).

Sport Australia is "under pressure to shelve until after the Tokyo Games a contentious new funding model" that could potentially strip more than A$1M ($722,700) from the athletics team in the "critical 12 months leading up to the 2020 Olympics," according to Chip Le Grand of THE AUSTRALIAN. Athletics Australia President Mark Arbib said that the model was based on a "bureaucratic obsession with winning medals" rather than a "fair assessment" of the sport and its leading athletes -- javelin thrower Kathryn Mitchell, discus thrower Dani Stevens, high jumper Brandon Starc, and hurdler Sally Pearson. Arbib said, "The new funding system should be immediately suspended and reviewed after the Tokyo Games. To move ahead like this provides great uncertainty for Olympic sports and will threaten the preparation of our athletes." The high-performance funding model, unveiled last Friday, includes a financial boost for 12 Olympic and Paralympic sports from Jan. 1, with women’s football, women’s rugby sevens, para-athletics, diving, shooting and softball "among the big summer sport winners." Australian Institute of Sport Dir Peter Conde said that while the new model contained "tough decisions," these were necessary for Australia to secure the best Olympic and Paralympic return from a "tight sports budget." He said, "We are here to fund for podium success. That is what we are charged with doing. None of the sports that have been cut are in that frame" (THE AUSTRALIAN, 11/27).