APRIL | THE COMMENTATOR
Martin Fullard
on the possible
takeover of the
Six Nations by
CVC Capital
Partners
O
ver in the world of
exhibitions, the subject
that seems to get the
juices flowing is private equity
(PE). The organisers love it. They
start a show, run it for a few
years, and live in hope that some
snappily dressed businesspeople
will turn up one day with a
briefcase full of cash.
In business-land, PE is all
perfectly fine, but when it mixes
with sport it can cause, shall we
say, problems.
Do you remember CVC Capital
The Private
Equity stakes
Partners? The British firm worth
roughly US$111bn?
They owned Formula 1 for a
while after gradually buying up
shares during the early 2000s
(at a hilariously overpriced rate
from Bernie Ecclestone).
In September 2016, CVC
Capital Partners agreed to sell
control of the Formula One
Group to John Malone’s Liberty
Media in a deal worth US$4.4bn.
In 2017, a second payment of
$354mn in cash and $3.3bn
in newly issued shares in a
Liberty Media tracking stock
saw Liberty Media assume full
control of Formula One.
Anyway, during CVC’s tenure
it was clear that they were only
interested in the pure profit
and failed, repeatedly, to invest
back into the sport. Payments to
teams were inconsistent and, in
some cases, poor, causing several
to go out of business. They
were keen to get the TV rights
over to pay-tv companies like
“Tickets for the England v
Australia game at Lord’s
are being sold on a site
called Viagogo for 104
times their face value of
£115 – madness.”
Sky, abandoning the terrestrial
market altogether. Circuits were
charged stupid-money size fees
to host races, causing many to
turn their backs on the sport…
it was the best example of bad
capitalism.
In March, however, we have
learned that CVC are looking
to buy the Six Nations rugby
tournament. Rugby Union has
done a good job in bringing the
sport closer to fans in recent
years, and TV coverage in the
UK is actually very good. It
hasn’t got the same appeal in
quite the same way as football,
42
but it is certainly on the right
path.
The Six Nations is considering
an offer from private equity firm
CVC to sell a stake in rugby’s
oldest championship.
It is said that it could provide
a windfall of more than £100m
to each union but would mean
partly surrendering control of
the competition.
However, if the Six Nations
decide to sell to private equity, it
would almost certainly kill the
chances of the mooted Nations
Championship getting off the
ground.
The Six Nations unions -
England, Ireland, Scotland,
Wales, Italy and France - have
been in talks for the past 18
months over pooling their
commercial interests. The
interest from CVC - one of a
handful of possible options -
means the Six Nations face a
dilemma between selling to
private money or embracing the
World Rugby-sanctioned Nations
Championship.
It is understood CVC’s offer is
for an approximate 30% share in
the Six Nations. Sources at the
unions have not denied an offer
is on the table but insist a deal is
not imminent.
CVC bought a minority
shareholding of 27% in England’s
Premiership Rugby in December.
If CVC continue to buy
influence in rugby, I hope the
sport is demanding in their
expectations…