Rugby union’s broadcast rights value tumbles in eyes of private equity firms
The money that was hoped to come from private equity to fund grassroots and the women’s game is no longer on the table, JAMIE PANDARAM reports on where to now for the code.
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Rugby Australia’s finances are again under strain, with private equity investment gone and the game trying to raise $90 million to keep going.
This masthead can reveal that RA has decided against private investment after failing to secure the money they’d sought, understood to be between $150-200 million, in exchange for giving up to 20 per cent ownership of the game to investors.
RA will now seek to raise up to $90 million of debt. Several lenders are understood to be willing to lend that money.
Private investors were not convinced that RA will yield a significant increase on their next broadcast deal, from 2026 onwards.
The current agreement, worth around $33 million a year with Nine and Stan Sport, concludes at the end of 2025.
RA chairman Hamish McLennan is adamant that major home events will deliver more than enough to revitalise rugby.
“We’ve paused on PE and are executing a debt plan, as we couldn’t provide enough accuracy around the next cycle of broadcast rights,” McLennan told News Corp.
“With a men’s and women’s home World Cup in 2027 and 2029 as the centrepiece of our plans, we didn’t want to undersell ourselves.
“The Matildas showed the incredible interest in home World Cups and rugby will be even bigger.”
RA received a $40 million loan from World Rugby, in anticipation of the revenue they’ll raise from the 2025 British & Irish Lions tour to pay that back.
They have already spent around $25 million of that loan, so will need to refinance with a new lender, while raising an extra $65 million to keep the game going, sources said.
RA had been in talks with up to seven private investment firms including Silver Lake, CVC and Andrew Forrest’s Tattarang, but the money offered was well short of expectations.
McLennan and new chief executive Phil Waugh were among executives to tell the game’s stakeholders via a video call this week that private equity was no longer an option, despite months of negotiations.
With the Lions series coming in 2025, and Australia hosting the men’s Rugby World Cup in 2027 and the women’s in 2029, RA has decided to move forward with the debt raising model and bank all future profits instead of sharing with private firms.
Network Seven bought the rights to the Matildas in this year’s home World Cup for peanuts, and ratings broke several records.
One source said revenue from the big rugby tournaments could exceed $200 million.
However, it leaves RA cash-strapped in the interim, and the money they’d hoped would flow from private investment into grassroots rugby and the women’s game is now in jeopardy.
Add to that the woeful form of the Wallabies, who are in danger of being bundled out in the pool stage of the World Cup for the first time in history if they lose to Wales on Monday (5AM AEST).
While RA is hoping to create a bidding war between broadcast rights holders Nine and Stan, with others including Foxtel - owned by News Corp, publisher of this website – poor performances by the national team and Super Rugby clubs could drastically reduce the sport’s value.
Broadcast rights expert Colin Smith, who has advised RA is previous deals, said: “If the Wallabies don’t make it out of the first stage of the World Cup, and there is the continued drubbing of the Super Rugby clubs, the attractiveness of rugby is going to decline significantly.”
Already, moves are afoot for RA to take over the running of the NSW Waratahs and Brumbies, who have been struggling financially for years.
It’s understood there will be a streamlining of operations, leading to job losses.
But RA faces stiff resistance from other Super Rugby clubs, who are happy for centralisation of the high performance rugby and strength-and-conditioning programs, but wary of a commercial takeover.
Waugh announced a centralised model had been agreed to by all clubs last month, but there is no signed agreement in place yet and the sticking point will be the control of the clubs’ money and assets.
The disappearance of private equity funding, and the poor performance of Australia’s teams, has sunk the code to an all-time low.
“This will be a hit for them, but if they can prove a turnaround strategy that Hamish McLennan is espousing, on the pitch – starting to be really competitive in Super Rugby and competitive in Tests in future years, there is a comeback from this,” Smith said.
“But if it continues to go backwards like it did this year, then it’s in a really sorry state.”
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Originally published as Rugby union’s broadcast rights value tumbles in eyes of private equity firms