Access All Areas April 2019 - Page 42

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…