CVC scrums down for rugby shake-up after securing Pro14 deal

CVC Capital Partners is pressing ahead with plans to reshape global rugby, completing a deal for a stake in the Pro14 club competition and seeking to get a £300m Six Nations deal back on track within weeks even as fixtures have been suspended during the pandemic.

The Luxembourg-based buyout group was forced to re-examine its appetite for deals in the sport at a time when matches are suspended and teams have been left struggling for cash.

However, its completion on Friday of a delayed £120m acquisition of a 28 per cent share in Pro14 Rugby, an annual tournament featuring teams from Ireland, Scotland, Wales, Italy and South Africa, is being seen as a green light.

Nick Clarry, head of sports, media and entertainment at CVC, said in a statement that the group had a “strong belief in the long-term potential of rugby for the fans, the players and the clubs, and what we can achieve in partnership with Pro14” .

The move is a sign that the buyout group has decided to stick with its strategy of backing rugby and will target further deals. Its investment thesis is that the media and commercial rights of competitions that command the attention of millions of fans will continue to rise in the aftermath of the pandemic.

CVC, the former owner of Formula One and Moto GP, is now seeking to finalise the postponed Six Nations deal, its biggest proposed rugby deal to date, which was delayed amid the disruption caused by coronavirus.

Two people involved in the process said the deal could be completed within the next six weeks and before games are restarted, though it is not clear whether the terms would be the same as before.

The Pro14 deal may also pave the way for an expansion of the tournament to include more clubs from South Africa, while “greater collaboration” between competitions in CVC’s portfolio could create a springboard for a rugby “club world cup”, a person familiar with the matter said. 

Six Nations did not respond to requests for comment.

Pro14 represents CVC’s second transaction in rugby union. It paid £200m in 2018 for a 27 per cent stake in Premiership Rugby, the top tier of the English club game.

Martin Anayi, chief executive of Pro14 Rugby, said the deal represented a “show of faith” on the part of CVC, which is persisting with investment plans across sport, even as fixtures have been suspended because of the pandemic.

Last month, the Six Nations said it had “not agreed to either take a break nor to push through a completed agreement” with CVC but that discussions “obviously take into account the new environment.” 

CVC tends to take minority stakes in sporting competitions, seeking commercial control in a way that will allow the group to bundle together TV rights for different competitions and sell them on to broadcasters. 

Last week, the group also entered exclusive negotiations over a €2.2bn deal to acquire a minority stake in Italy’s Serie A football league, according to people familiar with the discussions. It had initially begun talks with the organisation two years ago.

CVC has previously held conversations with Fifa, world football’s governing body, and Spanish football club Real Madrid, about forming new global tournaments, though those talks have stalled.

The private equity group has made more significant progress in rugby, with plans to become the biggest commercial player in the game. CVC has also held talks over its investment plans with other important sports organisations, including South Africa and New Zealand, two of the biggest southern hemisphere rugby nations, as well as with World Rugby.

On Friday, the Six Nations and Sanzaar, the body that represents the big southern hemisphere nations — New Zealand, Australia, South Africa and Argentina — released a joint statement vowing to work together to agree proposals for an “aligned global calendar”, in a move that could create space for a new international club contest.

Sports matches around the world have been on hold since March but organisers are in talks about a return to action. This month, chief medical officers from sporting bodies in football, cricket, rugby and horseracing met government officials to discuss safe ways to hold events, even in empty stadiums.

The owners and chief executives of Premiership Rugby clubs held meetings about a return to action this week, but it was decided players and coaches would not be able to return to full training for at least two weeks, casting doubt over plans to resume games in July.