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Cain column: It is about time CVC told us what they are up to

Six Nations

THE most visible face of CVC, the private equity firm currently investing huge sums in Rugby Union’s gold standard competitions, is the three block capitals in their corporate name.

Other than that, the strategy, and those authorising and implementing it, are virtually invisible.

Despite acquiring shareholdings in Premiership Rugby, paying more than £200m for 27 per cent, and the PRO14, paying £120m for 27 per cent, as well as being in negotiation with the Six Nations for a 14 per cent share worth £300m, in terms of their Rugby Union plans CVC have no public profile.

The Luxembourg-based company have so far put forward no senior management figures to explain why they have invested in Rugby Union, and what they hope to achieve.

Crucially, despite the scale and significance of their acquisitions, CVC have provided no detail of their purported ambition to change the face of global rugby while maximising on broadcast revenue and commercial partnerships.

The same is true of the changes to existing competition structures that they want to make, and the broadcasting model they intend to employ.

Given that CVC have had more than a year in which to get their public relations and media communications script out there, the only conclusion that can be drawn is that these considerations are a long way down their list of priorities.

In the CVC world money does the talking, and the company would clearly prefer to make the acquisitions they need to, before leveraging them to create the competition structures in Rugby Union that will deliver the massive increase in revenue they hope to generate.

For the record, CVC are listed as being seventh in the top ten private equity firms in the world, and are the biggest in Europe, with total assets of US$75 billion.

According to a report in the Financial Times, CVC have a fund of over £14 billion, which they raised in 2017 to finance their rugby investments.

That puts them off the financial charts in terms of any previous investment in this sport, and makes them potentially such a big player in Rugby Union that in terms of clout they would make a million-strong army of Billy Vunipolas look miniscule.

At the moment, reports from South Africa and New Zealand suggest strongly that CVC are in dialogue with SANZAAR, the southern hemisphere partnership that runs their annual Rugby Championship (South Africa, New Zealand, Australia and Argentina), as well as their struggling Super Rugby tournament.

There is no doubt, given the volume of CVC’s existing investment, and their ambition to expand it much further, that their plans to redraw the Rugby Union map in terms of competition structures, and broadcast and commercial partnerships, are well advanced.

There is also no doubt that CVC aim to make a shed-load of money from their Rugby Union masterplan, because that is what private equity firms do.

What the rugby administrators have to do is ensure that the game also benefits equally from any financial uplift, and that any changes in competition structures, and the broadcast and commercial landscape, are beneficial for Rugby Union, not just now, but going forward.

To make headway CVC first have to unravel the spaghetti of often conflicting national union interests, as well as jealously guarded international and club competitions.

They will have discovered already that meritocracy is not the name of the game in many Rugby Union competitions. In fact, their prospective Six Nations associates, and their new Premiership partners, are the most glaring examples of a cartel mentality, with neither organisation prepared to countenance a fairly funded promotion-relegation system.

CVC’s voyage of discovery will also reveal that World Rugby, the so-called governing body of the global game, is in reality a ‘hostage’ organisation in which the biggest national unions protect their interests by horse-trading with each other over lucrative spoils, such as World Cup venues and the allocation of the financial dividend from the tournament.

World Rugby have a chief executive and a chairman, but neither are roles comparable to that of an independent commissioner of the sort that exists in big American sports, mainly because the major national unions are the brokers who decide on those appointments.

Premiership Rugby - CVC TV rights
Away from the majority: The masses could find it hard to watch the Six Nations with CVC pursuing a mega TV rights deal that free-to-air broadcasters can’t compete with. Getty Images

CVC are said to be considering including all major rugby competitions in a single package for broadcasters around the world, and exploring streaming deals with digital outlets like Amazon.

The private equity firm are also contemplating a second push to establish a new annual global international tournament along the lines of the Nations Championship that World Rugby were forced to abandon last year due to Six Nations opposition.

Another of their plans is to establish a Club World Cup. Neither of these concepts are new.

What will be new is if they can persuade World Rugby, the Six Nations, SANZAAR, the Lions, FIRA, European Rugby Cup, the Premiership, the Top 14/LNR, and PRO14 to surrender their fiefdoms, because CVC can answer all their questions, and will deliver a bright, prosperous Rugby Union future for everyone.

It will not be an easy sell. Brett Gosper, World Rugby’s incumbent chief executive, put out this guarded statement: “There is an understanding that CVC are an investor in the sport, and a supporter of important member unions of ours. Therefore, it’s best that we work together with them where possible, rather than be in a situation that that we’re not in dialogue.”

Just how much dialogue is going on between World Rugby and CVC, and how much agreement there is between them, is unclear.

What is clear is that it is time that a CVC spokesperson outlined their Rugby Union plans to the wider world, because there is a significant public interest in this sport, and the direction it takes, both within this country and globally.

NICK CAIN

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