Private equity giants circling likely 12-team trans-Tasman rugby

Private equity giants CVC Capital and Silver Lake appear to be on a collision course for a share of a 12-team trans-Tasman rugby competition.

Brumbies prop Scott Sio tussles with the Western Force defence. Both teams, who have been mentioned as victims of a culling process, should survive

Private equity giants CVC Capital and Silver Lake appear to be on a collision course for a share of the trans-Tasman rugby competition which now seems certain to go ahead with five teams apiece from Australia and New Zealand, but not until 2022.

All indications are that New Zealand Rugby has swallowed its reservations about the lack of depth across the five Australian Super Rugby franchises and is expected to sign on for a 12-team competition model, with Japan and a Pasifika team also coming in to round off the package. But because of continuing uncertainty around COVID-19 and the fact Australia and NZ are both are having to make regular adjustments to their biosecurity precautions, the trans-Tasman model is not to be introduced until the 2022 season.

Both countries are likely to continue next year with their purely domestic models that were used this year, New Zealand playing a second season of Super Rugby Aotearoa and Australia continuing with the Super Rugby AU competition that will reach its peak with the September 19 grand final in Canberra.

There already has been considerable speculation that if another season of Super Rugby AU is played, a sixth team, the Sunwolves of Japan, might be brought in for added variety.

In that event, it would also make sense for a Pasifika side to join the New Zealand competition next year to ensure that all 12 teams would be fully up to speed by the time the 2022 season arrives. But for that to happen, World Rugby would need to stop making pious statements about the need to give Pacific Island rugby a helping hand and actually come through with sufficient funds to get a team up and running.

The deadline for expressions of interest in the NZ model closed at the end of August and while Australia showed no interest in any competition which did not involve all five Australian teams, behind the scenes negotiations look to have achieved a breakthrough. Certainly relations between Rugby Australia chairman Hamish McLennan and interim CEO Rob Clarke and their NZ Rugby counterparts, Brent Impey and Mark Robinson, appear to have defrosted considerably since the early days of trans-Tasman negotiations.

Now a second deadline is about to come into play. Friday, September 4, was the date set by Rugby Australia for expressions of interest in the broadcast package it has taken to the open market.

“That’s the deadline and then I anticipate we would be entering into a period of negotiation and we’ll see how that plays out,” Clarke told The Australian. “My discussions with potential broadcast partners have been very positive so we’ll see what the situation looks like at the end of the week.”

While Fox Sports has for some time expressed a clear preference for a trans-Tasman model, they have also been moderately impressed with the ratings achieved for Super Rugby AU. If a 2022 trans-Tasman competition can be announced within the next week, with a domestic series holding the fort in the meantime, it would deliver a degree of certainty to broadcasters for the foreseeable future.

The one thing Rugby Australia needs to avoid at this point is to antagonise broadcasters as Cricket Australia has done with Seven, promising a program that Seven does not believe it will deliver.

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McLennan has made no secret that he believes there is already competitive tension among private equity firms and that is certain to intensify now that the trans-Tasman competition model looks set to be green-lit.

CVC Capital Partners, which already owns a huge chunk of northern hemisphere rugby – having paid $543m for a 14.5 per cent share in the Six Nations tournament, $362m for a 27 per cent share of the English Premiership and another $217m for a 28 per cent share of the Pro14 competition – is intent on securing a sizeable portion of the prime southern hemisphere competition, with a trans-Tasman series would surely be.

Western Force owner Andrew Forrest looks to have backed a winner

Silver Lake, a global technology investment firm with a portfolio of investments that collectively generates more than $200 billion of revenue annually, has made it clear it wants to thwart CVC’s grand plan. All of which could produce a solution to the cash flow problems of Australia and NZ rugby should they choose to go that way.

Closer to home, Perth mining billionaire Andrew Forrest also will be heartened that Rugby Australia looks to have contrived the rebirth of the Western Force as a fully-fledged member of a major international competition. He had made it clear that there also needs to be constitutional reform of Australian rugby before he would consider investing in the game nationally but he must be delighted that McLennan’s “five or no one” condition looks like proving a winner.

The Force is waiting an official announcement before launching its recruitment program. If the trans-Tasman competition is delayed until 2022, it will give coach Tim Sampson time to get a more balanced squad together.