CVC moves closer to acquiring Six Nations stake
Six Nations Ltd, the organiser of the annual European national teams rugby union competition, is reported to have decided to enter into exclusive negotiations with CVC Capital Partners, the private equity firm which is targeting a 15-per-cent stake in the business.
A deal between the two parties would result in each member union (England, Scotland, Ireland, Wales, Italy and France) receiving £100 million ($125 million) and give CVC, which has already secured a 27-per-cent stake in England’s Premiership Rugby worth around £200 million, and is also in talks to invest in the Pro14 tournament, involving clubs from Ireland, Scotland, Wales, Italy and South Africa, considerable influence over the sport.
The Six Nations took the decision to commence negotiations with CVC earlier this week, according to the UK's Daily Telegraph newspaper.
The board had been reviewing the CVC proposal, alongside one from IMG, the international sports marketing agency, as well as an offer from World Rugby, the sport’s international governing body, since February.
However, World Rugby last month abandoned plans for a global Nations Championship that would have pitted teams from both hemispheres against each other across the year, citing a lack of support.
Since initial contact between the two parties was made, the proposed CVC stake has halved from 30 per cent to 15 per cent.
A key factor behind the decision to go with CVC’s offer is apparently the fact that the equity firm is already deep into talks regarding a £120-million acquisition of Pro14. It was reported in April that CVC was in exclusive negotiations with the Pro14, and that terms for a deal had been agreed.
The offers all spring from the belief of multiple sports agencies around the world that rugby remains undervalued compared with other sports such as soccer.
In February, it was reported that negotiations between the Six Nations and CVC were ongoing, and that the various individual unions were discussing pooling their rights for Six Nations and autumn home international matches against touring sides, mostly from the southern hemisphere.
The unions are thought to see this move as an opportunity to dramatically increase the value of their rights by creating a centrally-negotiated model akin to English soccer’s money-spinning Premier League. The unions presently negotiate their deals for the autumn internationals individually, albeit the Six Nations rights are centrally negotiated.
The Telegraph claims that the Six Nations has insisted that any deal with CVC would not affect its overall control of the championship, or the autumn matches, and that the future of the Six Nations on free-to-air television is not at risk.
It quotes a Six Nations source saying: “The Six Nations agreed a preferred direction to enter into an exclusive window of negotiation subject to the rapid board ratification of each union. While we will not make any further comments on on-going confidential discussions, the Six Nations reaffirm that the need for investment in the game is at the heart of its decision making process.”
The IMG proposal, worth £1.75 billion and known as Project Light, went beyond the Six Nations and included all of the world’s leading rugby nations, although a detailed competition format has not been made public
The World Rugby proposal included a guarantee of £7.8 billion over 12 years from Infront, the international sports marketing agency, and would have involved launching a top division of 12 countries worldwide.
If the Six Nations had decided to go ahead with this proposal (the organisers did perform due diligence), it would have been unable to go forward with the CVC offer.