Rugby up for sale: raiders move in

The Rugby Championship and Super Rugby could end up partially in private hands as private equity ventures circle.

Super Rugby could be a target for overseas investors

The Rugby Championship and Super Rugby could end up partially in private hands as SANZAAR conducts due diligence on these and other options as private equity ventures circle the southern hemisphere rugby giants ahead of a vital meeting in London next week.

Private equity giant CVC Capital is close to buying stakes in the Six Nations and Europe’s Pro14 club competition as part of a global competition restructure that now, seemingly, is on the brink of including the southern hemisphere nations of Australia, New Zealand, South Africa, Argentina and Japan.

Rugby Australia chief executive Raelene Castle on Wednesday would not confirm that her organisation had met with any private equity firm, but she did indicate that Australia has been seriously investigating what a potential deal might look like.

“At this stage we’re doing some due diligence on what the options could look like and all of those things that you have suggested (partial private equity ownership of the Rugby Championship and Super Rugby) could be options,” she said.

“And that’s what we will be discussing in more detail in London next week.”

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It is understood that CVC Capital is only one of several private equity firms believing there is an awful lot of money to be made in southern hemisphere rugby, but given its interest in both the Six Nations and Pro14, it is the one attracting most attention.

The company is set to put a 14 per cent share in the Six Nations tournament for $592 million, while a 27 per cent share of the Pro14 tournament is expected to cost it $237m.

Given that, since December 2018, it already owns a 27 per cent equity in the English Premiership, seemingly the way could soon be open for the formation of a world club tournament.

Ironically, the planned World Rugby Nations Cup tournament, which would have solved the bottom line for a whole lot of rugby nations — Australia included — was actually scuttled by the Six Nations because it was considering the CVC proposal. But CVC might yet demonstrate that there may be more than one way to skin the elusive cat of a truly global Test championship, in which all internationals count.

Although the private equity option has come to light during the period when RA has gone to the market with its broadcast rights, there will be suspicions raised about any action RA now takes to secure its financial position.

Chief Executive Officer of Rugby Australia Raelene Castle.

Still, it is believed CVC is looking to bundle rights for rugby competitions around the world into a solitary package. Interestingly, one of the firms that RA is hoping will enter the broadcast contest, Amazon, could join with CVC in a streaming rights deal, according to European reports.

While a private equity deal would remove much of the uncertainty around RA’s financial viability, there also are genuine concerns that the southern hemisphere giants, who have won every World Cup save for the 2003 tournament won by England, could be left behind by the financial might of the North if they do not act swiftly.

The private equity discussions at the SANZAAR meeting in London on Friday week won’t be the only urgent topic of discussion.

SANZAAR is also considering relocating the Japanese Super Rugby side, the Sunwolves, to Queensland as fears of a coronavirus pandemic continue to grow.

As Japan yesterday postponed all J-League soccer matches until March 15 out of concern for the growing health crisis and is reluctantly weighing up the threat to the Tokyo Olympics in July, thought is now being given to relocating the Sunwolves to a safer region — Queensland has been discussed — until the crisis passes.

The Sunwolves are expected to host the Brumbies in Osaka on March 8 before returning to Australia for matches against the Rebels and Waratahs in Melbourne and Sydney on March 20 and 27 respectively before taking on the Reds in Tokyo on April 5.

The Japanese side has played 10 of its scheduled home matches in Singapore, primarily to ensure South African sides did not have to catch more than one international flight, but another Asian venue would not bring any reasonable guarantee of a coronavirus-free environment.

“Are we thinking of what could happen?” Castle asked.

“Yes, we are because it is the responsible way for us to behave but as far as any decision is concerned, it’s a wait and see scenario.”

But given that four of their next five opponents are Australian, it make sense for them to relocate to Queensland until the coronavirus crisis is, hopefully, resolved.