The English are at it again.....

Snickers Man · 07-09-2018 3:13pm #1

Seems like the never-ending quest by English entrepreneurs, or to be more exact entrepreneurs in England, magically to concoct a rugby business of similar wealth and influence to the soccer premiership is proceeding apace.

the Guardian is reporting that English Premierhship rugby is considering flogging some of itself to a private equity fund for something like a quarter of a billion pounds with the intention of growing the business to a billion pound enterprise by the middle of the next decade.

The knock-on effects for Ireland would be huge, despite or perhaps because of the fact that we have resolutely, heroically and at the time of writing at least, successfully, managed to establish and maintain a competitive national side and be the cornerstone of a competitive domestic, if transnational, league.

Big money lures big professionals. No getting away from that. But are we really going to be buying the jerseys, subscribing to the TV stations and describing our relationship in terms of the first person plural pronoun ("we") to the likes of Saracens, Harlequins and Leicester in the same way that so many of our lickspittle counterparts pledge their allegiance to Unoited, Orsenal and "God forgive us" Chelsea?

Time to gird up the loins again, I fear.

Pa8301 · 07-09-2018 3:16pm

Those Protestants, up to no good as usual.

prawnsambo · 07-09-2018 3:17pm

They are all pretty much broke. It appears (to me anyway) that this is an attempt by the club owners to get out with their trousers on.

errlloyd · 07-09-2018 3:40pm

They money they get is supposedly ring fenced for debt refinancing. Which to be fair, should free up a couple hundred grand in interest for each of them.

Kevski · 07-09-2018 3:49pm

Based on how CVC ran Formula 1, I can’t see this potential deal turning Premiership Rugby into anything like Premiership football.

CVC invested very little in Formula 1 - essentially the bare minimum in order to keep the show on the road and maximise their profit. There was very little evolution in the product offered by F1 (tech regs aside) during their tenure and its only since it’s sale to Liberty Media that there have been significant changes from a fan perspective.

I’m sure that’s such a deal would put the premiership clubs on a more solid financial footing but I would be surprised if they became able to consistently splash cash and lure big name players on a consistent basis.

Larbre34 · 07-09-2018 4:02pm

They may intend to grow the business, but I don't see it keeping that fine for them.

Premiership football is huge because Soccer is the common sport of the world, folk in remote nooks and crannies of Africa and Asia buy Man U shirts because they play it in the streets and they are exposed to 'big' football in every local media. That market is what gives it its value.

The game of Rugby worldwide doesnt have anything like that kind of penetration, i'd say 5-10% at most, so there is a very low limit to the marketing appeal of Sale v Worcester. Even their home market is very finite. They'd be far better growing the game organically with strong community links and participation drives than trying to break away from their roots and bankrupting themselves in the process.

Interested Observer · 07-09-2018 4:09pm

What would CVC get out of this, where would their return come for? Ownership of the TV rights?

Snickers Man · 07-09-2018 4:47pm

Larbre34 wrote: »

The game of Rugby worldwide doesnt have anything like that kind of penetration, i'd say 5-10% at most, so there is a very low limit to the marketing appeal of Sale v Worcester. Even their home market is very finite.

You're not wrong but that won't stop them trying.

Larbre34 wrote: »

They'd be far better growing the game organically with strong community links and participation drives than trying to break away from their roots and bankrupting themselves in the process.

You mean like we do?

As a Dutch officer, quoted in the famous book on Operation Market Garden by Cornelius Ryan A Bridge Too Far said: "No Englishmen likes being told he's wrong by a damned foreigner."

Even when he is. That context was about how the British ignored, or never even asked for, Dutch advice on how best to proceed through the Dutch countryside even though the very problems they faced with regard to terrain and options were those that were examined as a matter of course by the Dutch military academy. British pig headedness contributed to the loss of thousands of British, not to mention Dutch, Polish and American lives.

So how do you expect them to be any less receptive to advice from other "damned foreigners"?

They are just pig headed enough to try to bash this one out, lure good players from everywhere with promises of huge cash in the short term, create a bloody awful mess and then walk away leaving somebody else holding all the debts.

After all, Montgomery thought Market Garden was 90% successful and "remained its unrepentant advocate"

Neil3030 · 07-09-2018 5:07pm

What way will this work - they buy the league, write off debt owned by clubs but then what, do they own parts of each club now? So you'll have a league with teams part owned by private individuals, and part owned by the same group of VCs?

Cookiemunster · 07-09-2018 5:11pm

Neil3030 wrote: »

What way will this work - they buy the league, write off debt owned by clubs but then what, do they own parts of each club now? So you'll have a league with teams part owned by private individuals, and part owned by the same group of VCs?

They buy 51% of the premiership rugby shares from the clubs. They won't take any stakes in the actual clubs. They then take over the marketing of the league.

Neil3030 · 07-09-2018 5:14pm

Cookiemunster wrote: »

They buy 51% of the premiership rugby shares from the clubs. They won't take any stakes in the actual clubs. They then take over the marketing of the league.

Thanks. So where does the debt come into it? I know individual clubs have debt outstanding, am I to take it the league does too? Or does the league absorb team debt somehow?

Larbre34 · 07-09-2018 5:21pm

Snickers Man, I absolutely take your point but I'm hoping for the health of the NH game they listen to cautious advisers. If they overreach, bankruptcies and war with the RFU over rights and player availability is good for none of us.

Cookiemunster · 07-09-2018 6:09pm

Neil3030 wrote: »

Thanks. So where does the debt come into it? I know individual clubs have debt outstanding, am I to take it the league does too? Or does the league absorb team debt somehow?

The £270m the clubs get for the 51% is enough to clear their debts.

stephen_n · 07-09-2018 6:12pm

The deal is rumored to be 50% share. With each of the stakeholder clubs getting £17 million each out of it. They are supposed to generate revenue by reselling transmission rights. Can’t see how they could make up that sort of money, premiership rugby is not the most attractive viewing in the world.

stephen_n · 07-09-2018 6:13pm

Cookiemunster wrote: »

The £270m the clubs get for the 51% is enough to clear their debts.

Wouldn’t even clear half of Wasps or Saracens debt.

Neil3030 · 07-09-2018 6:18pm

So are clubs essentially forfeiting 50% of future transmission revenues in order for £17m now up front?

Snickers Man · 07-09-2018 6:24pm

Larbre34 wrote: »

Snickers Man, I absolutely take your point but I'm hoping for the health of the NH game they listen to cautious advisers. If they overreach, bankruptcies and war with the RFU over rights and player availability is good for none of us.

Me too. But this is the English we're talking about. They're mad fellas, Ted.

Cookiemunster · 07-09-2018 7:35pm

Neil3030 wrote: »

So are clubs essentially forfeiting 50% of future transmission revenues in order for £17m now up front?

The idea is that the new owners will grow the brand into new markets and therefore increase TV revenues. The example given in the Times was that the Pro14 has announced transmission rights in Asia and North America, which it something the Premiership hasn't explored.

Tigerandahalf · 07-09-2018 9:05pm

Cookiemunster wrote: »

The idea is that the new owners will grow the brand into new markets and therefore increase TV revenues. The example given in the Times was that the Pro14 has announced transmission rights in Asia and North America, which it something the Premiership hasn't explored.

The Premiership is on fta tv in China this year I think.
If this were to happen the clubs would be handing over their future voting rights re where their competitions go I would think.

A lot of it seems to be pushing towards a no relegation league of top clubs but who knows. If the buyers decide to pursue league links with british and irish teams to form a new league or they could be looking to bring in the S Africans with the big tv audience down there.

If the 6 nations teams combined for 1 league even the market would be pretty big and I would say fans would be keen. Going forward there are too many top clubs in France and England and their unions may even favour a smaller number of clubs with the international players more concentrated.
Wait and see I guess.

Neil3030 · 07-09-2018 9:28pm

Cookiemunster wrote: »

The idea is that the new owners will grow the brand into new markets and therefore increase TV revenues. The example given in the Times was that the Pro14 has announced transmission rights in Asia and North America, which it something the Premiership hasn't explored.

Sure, I'm sure that's what they're selling. I'd just be wary if I were a club; were TV revenues split proportional to ownership, they are forfeiting 50% of a revenue stream, with no guarantee on the upside. It would require TV revenues to double before they are back to square one. That seems like a massive task for rugby, which is arguably near ceiling on its current markets, and no guarantees that ventures into the US, China etc will be successful soon enough for this to work.

Winters · 11-09-2018 11:57am

Take European club rugby, for example. The Guardian understands there is a desire in certain influential quarters to reduce the number of competing sides in the Champions Cup from 20 to 16. Only the top five sides each year from the respective three European-based leagues, plus the winners of the previous season’s Challenge Cup, would earn entry. The idea is to make the competition more cut-throat and, theoretically, attractive by ensuring more big matches rather than as opposed to flooding European weekends with wall-to-wall, occasionally mediocre fixtures.

https://www.theguardian.com/sport/blog/2018/sep/11/rugby-union-premiership-club-owners-meeting-cvc-275m

bilston · 11-09-2018 12:02pm

Winters wrote: »

Take European club rugby, for example. The Guardian understands there is a desire in certain influential quarters to reduce the number of competing sides in the Champions Cup from 20 to 16. Only the top five sides each year from the respective three European-based leagues, plus the winners of the previous season’s Challenge Cup, would earn entry. The idea is to make the competition more cut-throat and, theoretically, attractive by ensuring more big matches rather than as opposed to flooding European weekends with wall-to-wall, occasionally mediocre fixtures.

https://www.theguardian.com/sport/blog/2018/sep/11/rugby-union-premiership-club-owners-meeting-cvc-275m

The rather obvious problem with that is that there is a very real chance one of the Celtic Unions will miss out altogether in any given Champions Cup season, never mind the Italians. I just don't see the Pro 14 unions ever agreeing to it.

thomond2006 · 11-09-2018 12:05pm

Tbh since the reduction to 20 there have been less mediocre fixtures, so 24 teams -> 20 teams has been a success. 16 to me though would be too few teams.

prawnsambo · 11-09-2018 12:12pm

bilston wrote: »

The rather obvious problem with that is that there is a very real chance one of the Celtic Unions will miss out altogether in any given Champions Cup season, never mind the Italians. I just don't see the Pro 14 unions ever agreeing to it.

Sponsors and TV/streaming companies wouldn't be too enamoured of it imo. Especially the TV/streaming services who've paid big money for a set number of matches. So let's reduce the number of games, devalue the product and reduce club incomes. Brexiter thinking.

Tigerandahalf · 11-09-2018 12:14pm

It is probably more to do with the Premiership trying to reduce the toll on their players by reducing CC fixtures rather than their own.

lawred2 · 11-09-2018 12:18pm

they are more likely to bankrupt the English club game than turn it into some sort of commercial behemoth

molloyjh · 11-09-2018 1:12pm

thomond2006 wrote: »

Tbh since the reduction to 20 there have been less mediocre fixtures, so 24 teams -> 20 teams has been a success. 16 to me though would be too few teams.

The top 5 based on last season would have been:

Pro14:
Leinster
Scarlets
Glasgow
Munster
Edinburgh

Premiership:
Exeter
Saracens
Wasps
Newcastle
Leicester

Top 14:
Montpellier
Racing
Toulouse
Toulon
Lyon

Add in Cardiff as the Challenge Cup winners and the teams excluded would have been Ulster, Bath, Gloucester and Castres. Hardly the Trevisos or Zebres of previous seasons.

Also what would that mean for the Challenge Cup? With 38 eligible teams across all 3 leagues that would mean the Challenge Cup would need to accommodate 22 teams, 24 if the Continental Shield continues. Why have so many teams in such competition that barely gets any coverage?

irishbucsfan · 11-09-2018 1:59pm

I don’t think they’ll need to reduce the number of teams, I don’t think there’s the lack of quality among teams from 17-20 as there was in the teams from 21-24 (although that reduction has been successful).

Much more interesting is the Northern Hemisphere v. Southern Hemisphere idea. I’d love to see it but I don’t know where they’d find the space.

its_phil · 11-09-2018 2:42pm

irishbucsfan wrote: »

Much more interesting is the Northern Hemisphere v. Southern Hemisphere idea. I’d love to see it but I don’t know where they’d find the space.

Really? It sounds like pure garbage. I have very little interest in watching anything to win a cup to be shared by 3 leagues. Ryder Cup is niche because of the team aspect and All-Star weekends are just good craic. This just sounds like s****.

irishbucsfan · 11-09-2018 3:51pm

its_phil wrote: »

Really? It sounds like pure garbage. I have very little interest in watching anything to win a cup to be shared by 3 leagues. Ryder Cup is niche because of the team aspect and All-Star weekends are just good craic. This just sounds like s****.

Well I think it’d be great. Would love to see Leinster play a top NZ team in a competitive game.

No idea why the cup means so much to you! Ireland play huge games every November for no real silverware and I love it.

I’d be surprised if the NH sides won anyway, the Welsh sides would have to be included...

errlloyd · 11-09-2018 3:52pm

irishbucsfan wrote: »

(although that reduction has been successful).

I'm in two minds on this btw. I completely agree that there are a higher percentage of good fixtures. And that the system is possibly more meritocratic at the top (but still far from perfect).

On the flip side, I don't like that 20 teams has allowed teams to get out of their group on three wins. I think it devalues the competition if a team can get out of their group without having to win away in the pool stage.

The English are at it again.....

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