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CVC to bid 275m for premiership rugby.
primavesi (IP Logged)
05 September, 2018 07:57
Story in the Times today. Its behind a paywall but the deal, if agreed by the 13 club owners would give a 17 million windfall for each club. The money could not be used to increase salaries (no planned cap increase) and could not be pocketed by owners, although could be used to pay off debts.

No doubt a lot of people will complain about this, but in my opinion if CVC can tap into the huge potential of club rugby in terms of marketing the league to foreign markets, it could be a positive step on the road to sustainability. They are not known for failing to grow the sports they invest in.

Bring on the new west stand...?

Link (behind paywall)

 
Re: CVC to bid 275m for premiership rugby.
primavesi (IP Logged)
05 September, 2018 07:59
Having said that, I really hope they are not tempted to go down the ring fencing route.

 
Re: CVC to bid 275m for premiership rugby.
Squawker2 (IP Logged)
05 September, 2018 08:17
I'm a little confused - does this mean them receiving 51% of the television revenue? Because if that's the case, unless we expect CVC to deliver, immediately, a massive increase in yearly revenue it seems a terrible idea even in the short term.

I'd imagine I'm missing something, as I would assume they'd be far more aware of this than I



-----------------------------------------------------

Stuart Barnes is a Cock Womble

 
Re: CVC to bid 275m for premiership rugby.
Barty II (IP Logged)
05 September, 2018 08:31
If CVC's time in charge of Formula One is anything to go by, this is dreadful news. In my opinion of course.

 
Re: CVC to bid 275m for premiership rugby.
derbyshire fan (IP Logged)
05 September, 2018 09:59
Even though i work in financial markets, and am generally a supporter of the private equity industry, i find it hard to see that this could be a good move for the game that we love. The idea of having premier rugby controlled by non rugby interests seems dangerous

 
Re: CVC to bid 275m for premiership rugby.
maynas (IP Logged)
05 September, 2018 10:13
I think you all need to read the detailed articles and Owen Slot comments , as set out it actually seems a very good road to go down for the clubs, as their selling of TV rights around the world had been very poor, behind even the PRO14
Apparently too there are others behind CVC some there’s plenty of competition to ensure clubs get a good deal.Dont decry it just because it’s never and remember rugby as we know it is practically bankrupt

 
Re: CVC to bid 275m for premiership rugby.
primavesi (IP Logged)
05 September, 2018 10:13
Quote:
derbyshire fan
Even though i work in financial markets, and am generally a supporter of the private equity industry, i find it hard to see that this could be a good move for the game that we love. The idea of having premier rugby controlled by non rugby interests seems dangerous

I understand that view, but at the same time one or more of our big clubs going bankrupt would also not be good for our game. The current state of affairs is not sustainable. On the other hand, effectively exporting the league to new markets would be very good for the game. Whatever you say about their record in F1, their strategy was to aggressively sell the sport into new markets and even critics would probably agree that they had some success in that.

 
Re: CVC to bid 275m for premiership rugby.
GazzaFez (IP Logged)
05 September, 2018 10:35
Decide for yourselves. The full story........

[m.rugbynetwork.net]

 
Re: CVC to bid 275m for premiership rugby.
Maroon Tyke (IP Logged)
05 September, 2018 10:41
Quote:
GazzaFez
Decide for yourselves. The full story........
[m.rugbynetwork.net]

and Nigel Wray's views on ruigby pass

 
Re: CVC to bid 275m for premiership rugby.
Waldo (IP Logged)
05 September, 2018 12:30
Alas no detail on the proposal Bruce Craig is backing .

 
Re: CVC to bid 275m for premiership rugby.
Sarriebone (IP Logged)
05 September, 2018 13:02
Quote:
Barty II
If CVC's time in charge of Formula One is anything to go by, this is dreadful news. In my opinion of course.


That was my immediate thought as well

 
Re: CVC to bid 275m for premiership rugby.
Nightwba38 (IP Logged)
05 September, 2018 13:22
Would CVC or oversees markets be happy to see weakened teams playing during parts of the season due to the various RFU commitments or seek to change the status quo?

 
Re: CVC to bid 275m for premiership rugby.
Duncan96 (IP Logged)
05 September, 2018 17:16
Quote:
Nightwba38
Would CVC or oversees markets be happy to see weakened teams playing during parts of the season due to the various RFU commitments or seek to change the status quo?

Very good point. But: like the football premier league, would overseas markets like to see a much higher proportion of overseas players to the detriment of home grown?

 
Re: CVC to bid 275m for premiership rugby.
SarrieSaint (IP Logged)
05 September, 2018 18:01
Looking at the clusterf*$% that Bath is the thought that Craig might have a Baldrickian cunning plan terrifies me. As for the CVC plan I'd like to hear a whole lot more about it but it is at least an idea and that's what the league needs as it simply isn't sustainable in its current form.

 
Re: CVC to bid 275m for premiership rugby.
AP (IP Logged)
05 September, 2018 20:49
OK, so for that they get one Platinum seat at Sarries?



Successful hills are here to stay
Everything must be this way
Gentle streets where people play
Welcome to the Soft Parade

 
Re: CVC to bid 275m for premiership rugby.
BarnetSarrie (IP Logged)
06 September, 2018 22:37
I totally agree and am not unfamiliar with Private Equity and the way it works myself Derbyshire Fan.
It isnt in the end about CVC themselves. The problem is or will probably be what comes afterwards, when they sell their interest to make their fundholders and partners happy. They are proud of the fact that they normally hold an asset for longer than the traditional eight to ten year cycles common in this industry - indeed they proudly boast this is sometimes up to 15 years. But once PRL sell control, they cannot get that back - and I cannot imagine that CVC will want to do this deal without taking a controlling interest. Private Equity is not a good bedfellow for sporting clubs and whilst I understand Nigel's need to attract new partners to safeguard Saracens future, I do not believe this is the best way.

Similarly looking at the numbers - 17 million might sound a lot, but when you look at it over the medium term, it really isnt. It won't be enough to totally fund our new stand for example - we would still need additional money and partners, and that might be harder to attract if we no longer own our own key assets - and the club would no longer own its most important assets - the players and media rights.

I am not bothered about Eddie bleating about England - my own priority is always Saracens and will always be so. I want to see a succesful national team, but not at our - or other clubs' expense. What does bother me is an erosion of the game itself - Laws being simplified to attract a wider audience, higher ticket and merchandising prices than ever, ringfencing the premiership .... many things that would change the face of this sport.
I do not like the way Bruce Craig behaves - but in this instance, as with his decision to speak up against the injuries at England camps and the detrimental effect that had on his squad - I do agree with him.



Edited 1 time(s). Last edit at 06/09/2018 22:39 by BarnetSarrie.

 
Re: CVC to bid 275m for premiership rugby.
Wayoutwest (IP Logged)
07 September, 2018 08:26
Sell it! It would put most GP clubs back into the black with one agreement.

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
07 September, 2018 09:29
The fact that CVC are a private equity fund does not bother me so much as the fact that it is said their headquarters are in Luxembourg. Why would that be, I wonder? I thought we were now against dat sort of ting. Very unBritish, and cost me my knighthood....

Additionally the 13 clubs would be 'I'm alright Jack', however the rest of the Championship!

The advantage London Irish have over Ealing Trailfinders would widen considerably.

I wonder whether the recent anti Ealing Trailfinders articles in the press have anything to do with this CVC malarkey?

Stranger things have happenened in Rugby, said the man on the grassy knoll....



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
primavesi (IP Logged)
07 September, 2018 11:37
Quote:
BarnetSarrie
Similarly looking at the numbers - 17 million might sound a lot, but when you look at it over the medium term, it really isnt. It won't be enough to totally fund our new stand for example - we would still need additional money and partners, and that might be harder to attract if we no longer own our own key assets - and the club would no longer own its most important assets - the players and media rights.

Barnet, just to clarify, CVC would not be buying a stake in the clubs. They would be buying part of the stake that the clubs hold of the league. The only assets that Saracens would lose is part of the stake in the premiership and the associated income.


If CVC can use their not insignificant experience to grow the value of the league, then the clubs will benefit greatly.

I have always thought it a bit strange that a group of clubs hold a stake in the premiership. It creates a 2 tier system such that when teams like London welsh get promoted they are playing in a league owned by all their competitors but not them.

 
Re: CVC to bid 275m for premiership rugby.
Gryff (IP Logged)
07 September, 2018 12:37
The share structure of PRL is quite complex I remember there was some fuss when Exeter came up and stayed

I think there A shares, B shares and P capital shares and P income shares. Eac tye of share controls an income flow.

There are 13 batches of each shares in existence

The B shares are given to anyone promoted.

The A shares you acquire 5 for every consecutive year in Prem up to 40 and lose 5 if out of Prem.

The P shares are the ownership ones and can't be boght unless you are in the premiership over a year or sold if out of the prem over a year. I think Exeter paid £5m for Leeds P shares.

CVC would want P shares I assume and control over income flowing through A and B

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
07 September, 2018 12:56
The point is surely meaningless without context.

Any attempt to introduce ring fencing will be strongly resisted by Ealing Trailfinders.

Promotion and Relegation of one team is essential to give meaning to the game.

It’s only 1 team!



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
07 September, 2018 12:58
And I reiterate my previous remarks - it gives even more of an unfair advantage to London Irish over Ealing Trailfinders.



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
TonyTaff (IP Logged)
08 September, 2018 07:56
I too have a background in Financial Services; the bid is way too low.

However, my heart is in rugby. What about the players? They are already being overworked. An investment house would want to see them playing in their league all the time. If, as Nigel says, the money won't go on increased wages, any deal the new owners reach with the RFU will result in the elite players playing even more than they do now. You can replace a gearbox and suffer nothing more than a grid penalty - the same doesn't apply to humans!

Why the RPA haven't commented is beyond me. Oh, hang on, their leader used to play for Quins - his family trust probably owns CVC winking smiley



£676.97 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2017.

 
Re: CVC to bid 275m for premiership rugby.
BACK TO BLACK (IP Logged)
09 September, 2018 17:21
I read that CVC are very close to the evil SKY Empire which can only mean one thing. Private Equity firms are in it for themselves by a long way and their first bid is, as a few have said way too low. As Nigel says, it's worth considering but put in a hard negotiating team and get some alternatives if possible.
Watching this with interest.

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
09 September, 2018 20:35
You may know a bit about finance but are you based in Luxembourg or Otley clubhouse?

Are you a tax dodger or paying all taxes in full in England?



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
10 September, 2018 10:12
Anybody know a little about image rights?

The tax treatment thereof?

Sarcasm is indeed the lowest form of wit.



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
SarrieSaint (IP Logged)
10 September, 2018 13:07
Quote:
TonyTaff
I too have a background in Financial Services; the bid is way too low.

Based on what? Not trying to be argumentative just getting an idea why that valuation is too low. Currently the majority of the clubs run at a loss and show not sign of that slowing in addition the exploitation of advertising and commercial revenue streams outside the UK has been pretty weak for a professional organisation. I agree the potential is there but that's exactly what CVC (or a bid like its) would provide the professionals to realise.

50% of profit better than 100% of the losses from what I remember?

General point, to clarify Craig isn't making some moral stand against CVC but is rather blocking the idea because he is working on his own plan with investment partners.

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
10 September, 2018 13:27
Telepathy is a marvelous gift.

I know what is in the mind of Bruce Craig even before he does himself. I am Spartacus...

Moral point? Stuff that, I want wealth generated from the English game to stay in England as far as is reasonably possible.

If you don't even try, how will you ever succeed?



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
10 September, 2018 13:29
Without the return of Exchange controls, my Socialist hypocrites....



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
TonyTaff (IP Logged)
11 September, 2018 08:22
I can find no corroboration of Nigel's claim that the CVC proposal doesn't confer control. Both Saturday's Times and The Sunday Times repeat the term '51%'. Ben Kay suggests that the RFU should bid - I can't see many club owners voting for that!

SS, it should be possible for PRL to improve the exploitation of commercial rights without relinquishing control. It is that that leads me to conclude that the valuation should be higher.



£676.97 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2017.

 
Re: CVC to bid 275m for premiership rugby.
SarrieSaint (IP Logged)
11 September, 2018 11:13
Quote:
TonyTaff
ISS, it should be possible for PRL to improve the exploitation of commercial rights without relinquishing control. It is that that leads me to conclude that the valuation should be higher.

I get that totally but surely they should already be doing that? look at the lack of push for the games held in the States or selling into Far East markets.

 
Re: CVC to bid 275m for premiership rugby.
Duncan96 (IP Logged)
11 September, 2018 13:41
I believe much of the desire to increase media rights comes from looking at the Football Premier League which, in terms of revenue, is a major success. I would suggest that success is based on 2 factors:

1. The product has improved. My evidence is: compare the games in this summers world cup or the football played by Manchester City to, say, Watford’s long ball game. Much of that improvement has come from law changes like outlawing the tackle from behind.

2. The premier league is not an English league it is a world league. Mainly foreign players, managers and owners. That makes it more attractive to overseas viewers who have more of “their own” to follow.

My point? Does this mean 1. a sport controlled by financial investors will have a drive to change the product for more mass appeal (not necessarily a bad thing but traditionalists wont like it) and 2. We will see the “Englishness” of the clubs diminish to the 30% and falling levels so complained of by Gareth Southgate?

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
11 September, 2018 20:54
No to CVC but no details of any alternative proposals



Carry on my wayward son/daughter with your fruitless speculation...



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
Rupes (IP Logged)
11 September, 2018 22:22
SarrieSaint - you're right on a couple of fronts, specifically that Premier Rugby should already be looking to extend their broadcast rights deals and that 50% of profits is better than 100% of losses.

And in those sentences lies the major gamble which is here and now for Premier Rugby. Do they think they can "beat" that $275m opportunity through either minority shareholder investment, by broadcast/media rights deals or via other means? I don't honestly believe that the offer was turned down on the basis of CVC's reputation from F1, so it must be for potential greater commercial gain.

The carrot here as far I could see was always the $17m handout to each club - which I thought solved all debt issues bar Saracens and Falcons? I may be wrong with that, but it's still a substantial amount of cash to turn down for most clubs. So I guess there must be a Plan B somewhere, but I really think this is a brave (not negative, by the way) move by the clubs.

 
Re: CVC to bid 275m for premiership rugby.
BarnetSarrie (IP Logged)
12 September, 2018 13:10
There is a very interesting article about CVC in the Times behind the paywall which is well worth reading. The upshot of it is that CVC would be a very dangerous bedfellow. I note that the clubs have rejected anything that would mean them taking a majority stake - but even with a minority stake, it would be like the fox swimming across the river taking the snake on its head.
[www.thetimes.co.uk]


CVC bought the F1 shares and then offloaded minority stakes to other Funds more than doubling its money. Bernie Ecclestone said he couldnt make long term plans with CVC involvement and that it was being run too much like a business not a sport (there are obviously two views about that given the way the Premiership is currently run - and he was no innocent in all this, being accused of bribery in Singapore in trying to promote CVC's bid!) It milked the relationship without putting anything back and took the sponsorship money, commercial rights and charged grand prix venues for the privilege of hosting the grand prix. Owen Slot says the league has been valued at £550 million and that that figure is expected to rise to 1 billion in the foreseeable future. If that is the case then CVC are having a laugh.



Edited 1 time(s). Last edit at 12/09/2018 13:11 by BarnetSarrie.

 
Re: CVC to bid 275m for premiership rugby.
nedrichards (IP Logged)
12 September, 2018 16:41
fwiw I count 7 clubs with over 17 million borrowings according to this fairly interesting Guardian list from a few weeks back: [www.theguardian.com] and that doesn't include London Irish. Now obviously the point wouldn't necessarily be to wipe out existing debts, but to use the money to pay for new expansion in facilities etc. which could bring in future revenue but 275million isn't a 'pay off everything and walk away happy' amount of money for the owners - setting aside any use they may want to put to those losses in future.

 
Re: CVC to bid 275m for premiership rugby.
Roger G (IP Logged)
12 September, 2018 17:31
These "borrowing" figures can be interpreted in many ways IMHO. For example if Nigel Wray says the money owed to him is a director's loan which will never be called in (which I think he has said, or at least intimated), then is it really a "borrowing"? He is, after all, both debtor and creditor. For how many other clubs is the picture the same?

 
Re: CVC to bid 275m for premiership rugby.
TonyTaff (IP Logged)
13 September, 2018 17:52
Quote:
Coughie
No to CVC but no details of any alternative proposals


Carry on my wayward son/daughter with your fruitless speculation...

The next line is:

... There'll be peace when you are gone.



£676.97 (*) donated to the Saracens Foundation due to visits to the Sarries frontpage [www.rugbynetwork.net]

Please read and submit articles for publication. (*) As at October 31, 2017.

 
Re: CVC to bid 275m for premiership rugby.
Rupes (IP Logged)
13 September, 2018 20:21
@nedrichards - that assumes that the owners want to improve facilities and the like with the $17m. I'm picking on Worcester because I know their sale had been talked about, but surely that sale becomes much more attractive with $17m of debt vanished!

As an aside, IF the sale of these commercial rights goes through (to whoever), does that make it less likely for new owners or shareholders to want to invest in clubs?

 
Re: CVC to bid 275m for premiership rugby.
Coughie (IP Logged)
14 September, 2018 13:05
Let us not intrude on private grief but be thankful for what we have.

One up one down...



~ You never knowingly let the facts get in the way of the story. ~

 
Re: CVC to bid 275m for premiership rugby.
nedrichards (IP Logged)
14 September, 2018 21:40
@Rupes indeed, I was assuming that the other owners would enforce some sort of revenue raising clauses in the bit that would "prevent the clubs spending it on wages" (otherwise you could just get two charles piatau's for 8 years).

The other bit that hasn't been talked about much is what rights any sale here would give an investor to the centralised funds. e.g. if the clubs sell TV rights for 150 million over 5 years (say) have they just handed over 75 million of that to CVC. Certainly, as a club we'd need a *significant* uplift on international revenues and AzP revenue in order to make up for a 50% loss in existing TV revenue, just to get back to "losing 2 million a year".


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