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Author Topic: CVC deal for 35% of Prem  (Read 1400 times)

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Gone

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CVC deal for 35% of Prem
« on: Wednesday 12-Dec-2018, 20:39* »
Here we go - the beginning of the end of the sport we love. Don’t say I didn’t warn you when there are midweek games, games abroad, law changes.

Here’s the killer paragraph:

“a landmark moment that will allow clubs to make the next wave of investment on grounds and fan experience.“

Rugby is....(insert swear word)


From the Guardian.


Premiership Rugby hopes to conclude a £230m agreement with a private equity firm before Christmas after a board meeting on Tuesday failed to tie up a few loose ends.

When the 13 shareholders in Premiership Rugby, made up of the 12 clubs in the top flight plus London Irish, first discussed the proposal in September they rejected it, not least because CVC Capital Partners wanted a 50% stake.

This week’s meeting at Heathrow agreed the deal – which would give CVC a 35% stake – in principle, leaving the executive arm of Premiership Rugby to sort out the unresolved issues in the next two weeks.

“There remains unanimity about our approach and our desire to enter into a requirement for a significant investment which we think will herald a new era for the league,” said the Premiership Rugby chairman, Ian Ritchie. “We remain on track in achieving our objectives but nothing has yet been concluded.

“These discussions are inevitably complex and take whatever time is necessary. We had a good meeting and have a shared objective. We are still in discussions and they will continue. We have to take time to make sure things are done in the right way.”

Clubs would each receive around £18m if the deal goes through but they would be better off in the long-term only if income from central funds rose by significantly more than the 35% stake CVC is looking to take.

The company would take that percentage from the pot each year, meaning that if it did not grow the clubs’ annual income would shrink. They were reassured the lump sum they receive will be a windfall with proceeds from sponsorship and broadcasting deals expected to rise significantly if CVC gets involved.

CVC, which used to own Formula One, would have no say in the running of the league but would lead its commercial arm. “We are not there yet because discussions like this one are not straightforward,” said the Premiership Rugby chief executive, Mark McCafferty. “It is a question of time rather than principle and we would like to resolve this before Christmas.

“It always comes down to a few issues and we will work through them. Nothing is done until it’s done and it will not drag on. With the collective will around the table today, we can find the answers to those items. If we get there, it will be a landmark moment that will allow clubs to make the next wave of investment on grounds and fan experience.

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DOK

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Re: CVC deal for 35% of Prem
« Reply #1 on: Thursday 13-Dec-2018, 09:01* »
Is this the end of rugby on free to air then?

deadlyfrom5yardsout

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Re: CVC deal for 35% of Prem
« Reply #2 on: Thursday 13-Dec-2018, 10:10* »
FTA channels still have to pay to broadcast I'd imagine?

Fearless Fred

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Re: CVC deal for 35% of Prem
« Reply #3 on: Thursday 13-Dec-2018, 10:34* »
Remember, this is for the Premiership only. It won't impact on the current International broadcast rights. At the moment we've only had Premiership rugby on FTA for something like a year (I think I'm right in saying BG10 was the first game broadcast by C5). Before that you have to go back decades to the days of Gradstand for *any* rugby on TV, and it was predominantly RL that was broadcast at a club level. We currently have 5 games a year on C5, alongside the highlights show. That's not a lot. If CVC want to get their money back, they need to get a) bigger/more sponsors involved and b) more eyes to see that sponsorship.

Gone

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Re: CVC deal for 35% of Prem
« Reply #4 on: Thursday 13-Dec-2018, 10:42* »
Yeah there is/hasn’t been any free to air club rugby worth watching other than the tiny bits thrown to C4 as part of their deal as a secondary rights holder.

AllyMac

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Re: CVC deal for 35% of Prem
« Reply #5 on: Thursday 13-Dec-2018, 11:16* »
Discounting the £18m per club initial windfall (which based on my experience of how agents work, a substantial part of which will make its way into the players hands, rather than being spent on infrastructure and improving the fan experience), simplistically speaking if CVC take 35% of the money generated from the central pot at the end of year one, unless they have managed to generate an additional 47% additional income during that first year, the clubs will all be worse off. An earlier Guardian article (from September 2018 I believe) showed how little CVC Capital Partners have actually contributed to Formula One, and how, instead of growing the sport, they have made it less popular, both amongst fans and amongst sponsors. It sounds to me like Premier Rugby are opting for short term gain in return for long term pain.
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Gone

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Re: CVC deal for 35% of Prem
« Reply #6 on: Thursday 13-Dec-2018, 11:22* »
Discounting the £18m per club initial windfall (which based on my experience of how agents work, a substantial part of which will make its way into the players hands, rather than being spent on infrastructure and improving the fan experience), simplistically speaking if CVC take 35% of the money generated from the central pot at the end of year one, unless they have managed to generate an additional 47% additional income during that first year, the clubs will all be worse off. An earlier Guardian article (from September 2018 I believe) showed how little CVC Capital Partners have actually contributed to Formula One, and how, instead of growing the sport, they have made it less popular, both amongst fans and amongst sponsors. It sounds to me like Premier Rugby are opting for short term gain in return for long term pain.

A point I've made endlessly on here.

This deal is going to see the clubs make less and less money.
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Monte

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Re: CVC deal for 35% of Prem
« Reply #7 on: Thursday 13-Dec-2018, 13:22* »
Well what I don’t want is for Premiership rugby to go to Amazon nor to have it split between Sky and BT. Sky is so expensive per month for anyone not interested in football, BT is working that way but at present much cheaper.

Gone

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Re: CVC deal for 35% of Prem
« Reply #8 on: Thursday 13-Dec-2018, 13:44* »
Well what I don’t want is for Premiership rugby to go to Amazon nor to have it split between Sky and BT. Sky is so expensive per month for anyone not interested in football, BT is working that way but at present much cheaper.

Will be interesting to see what happens next round. BT's strategy of buying a lot in order to increase broadband subscribers hasn't worked, and Sky have got new owners, football is everything to both of them.

AllyMac

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Re: CVC deal for 35% of Prem
« Reply #9 on: Thursday 13-Dec-2018, 14:30* »
Well what I don’t want is for Premiership rugby to go to Amazon nor to have it split between Sky and BT. Sky is so expensive per month for anyone not interested in football, BT is working that way but at present much cheaper.

According to the September Guardian article, the only ways in which CVC managed to increase the income generated through Formula One was via the TV rights and by staging races at circuits where the owners were prepared to pay more, hence the fact we now have a Russian GP, Bahrain GP, Azerbaijan GP, and so on (countries with alleged histories of serious Human Rights abuses). Also, from the 2019 season onwards, Formula One will only be seen on Pay to View TV.

If this is the model that CVC intend to follow with rugby, (as under the terms of the deal it would appear that they will be heavily involved with the commercial aspects of the league) expect the cost of watching our team play on the TV to skyrocket and for us to be playing teams from countries who are willing to pay the most to host games. Fancy a trip to Azerbaijan anyone?
« Last Edit: Thursday 13-Dec-2018, 14:33* by AllyMac »

Gone

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Re: CVC deal for 35% of Prem
« Reply #10 on: Thursday 13-Dec-2018, 14:45* »
Yeah for fear of being a broken record. The deal is because they think there are marketing and TV rights opportunities. That is it. That's their only interest, in exploiting those areas for maximum revenue then cashing out at the peak of the market.

This is why only corrupt dictatorships can now afford to host F1 races and why the global audience for F1 has fallen by more than 100m viewers.

JammyGit

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Re: CVC deal for 35% of Prem
« Reply #11 on: Thursday 13-Dec-2018, 20:00* »
Don’t say I didn’t warn you when there are midweek games, games abroad, law changes.

So the only difference with modern pro rugby is... midweek games?

AllyMac

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Re: CVC deal for 35% of Prem
« Reply #12 on: Thursday 13-Dec-2018, 20:48* »
Yeah for fear of being a broken record. The deal is because they think there are marketing and TV rights opportunities. That is it. That's their only interest, in exploiting those areas for maximum revenue then cashing out at the peak of the market.

This is why only corrupt dictatorships can now afford to host F1 races and why the global audience for F1 has fallen by more than 100m viewers.

I’m trying to reinforce what you are saying Blucherquin, and agree with all of the points you are making. There will always be those who will disagree and that’s one of the great things about living in a democracy.

Gone

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Re: CVC deal for 35% of Prem
« Reply #13 on: Thursday 13-Dec-2018, 22:53* »
I’m trying to reinforce what you are saying Blucherquin, and agree with all of the points you are making. There will always be those who will disagree and that’s one of the great things about living in a democracy.

Huh? I didn’t say anything about it did I?

RodneyRegis

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Re: CVC deal for 35% of Prem
« Reply #14 on: Friday 14-Dec-2018, 08:09* »
BT were far too greedy. They should have collected more market share before raising their prices. I got BT sport when it first came out, with sky sports, and it was 21 quid a month. Now it's more like 50, without sky.

 

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