CVC Capital Partners, the private equity firm that has already unsettled World Rugby with the big-money deals it has signed with the Six Nations and the English Premiership, is said to be in talks with SA Rugby about a similar deal.
The details about the proposed agreement are still scarce, what with SA Rugby having decided to keep the contents of the negotiations away from its own shareholders, the rugby unions.
But if CVC’s buying into the Six Nations and the Premiership to the tune of £300 million (R5.8 billion) and £200 million, respectively, is anything to go by, this is the kind of deal that should set South African rugby up for the foreseeable future.
Several senior officials in the game have admitted to being aware of the talks, but were not aware of the contents of the negotiations, a situation they hope will be rectified at SA Rugby’s meeting with the unions on February 20.
If CVC’s buying into the Six Nations and the Premiership to the tune of £300 million (R5.8 billion) and £200 million, respectively, is anything to go by, this is the kind of deal that should set South African rugby up for the foreseeable future
One of the officials said of SA Rugby’s potential new equity partners: “They’re a private equity fund and they invest in sport. They’ve just bought 20% of the Six Nations and English Premiership Rugby, and I’ve been told they’ve done the same with SA Rugby.”
CVC has invested in Formula One and MotoGP in the past. Also, if the sums being spoken about regarding Six Nations and English Premiership Rugby are anything to go by, this is the kind of cash injection SA Rugby is desperate for.
That said, there is a note of caution among the game’s officials, with one saying: “Because it’s a private equity firm, which works on return on investment, what they’ve done with their other investments is they’ve bought their revenue stream.
“So, while it sounds unbelievable, it’s not actually all that clever because they give you a big number upfront – if it is – but then you have to pay 20% of your revenue a number of times.”
There had been talks about concerns of the deal affecting SA Rugby’s Pty Ltd status but, while, the officials did not think it would, they were essentially in the dark about the details of the proposed move by the two parties.
When asked about the negotiations yesterday, SA Rugby president Mark Alexander dismissed talk of the deal as “disruption and speculation”.
But the UK’s Daily Mail published a story on Friday night claiming that it, too, was aware of SA Rugby being in equity talks. It did not name CVC as the potential equity partner, the understanding being that the new partnership would give South Africa “additional credibility on their arrival at Europe’s top table”.
When you have a high-funding commercial owner of the sport that isn’t the governing body, certain calls can be made that we might think aren’t in the interests of the sport’s growth, player welfare
World Rugby chief executive Brett Gosper
The point of the story was to claim that South Africa would join the Six Nations, which would then become the seven nations, in 2024, the year after the next Rugby World Cup.
Given that the Six Nations is already partly owned by CVC, it would make sense for the Springboks to migrate north.
World Rugby, which failed in its own talks with CVC to fund its World League project, has already expressed concerns about CVC buying up the rugby landscape.
The fears stem from a big money investor having more influence than the league does and making calls that aren’t good for the game.
World Rugby chief executive Brett Gosper told the Guardian last year: “When you have a high-funding commercial owner of the sport that isn’t the governing body, certain calls can be made that we might think aren’t in the interests of the sport’s growth, player welfare or other areas.
“We would want to make sure things are being done for the right reasons and that our influence wasn’t usurped. We can’t really comment at this stage whether it’s good or bad. But many of our biggest members have welcomed this increased funding, so we can recognise it only as a positive.”