Preparations for the Six Nations Championship began earlier than usual this year, as top players turned out for the glitzy London premiere of the competition’s debut series on streaming platform Netflix.
Also in attendance was Nick Clarry, the managing partner responsible for CVC Capital Partners’ sports investments, including the Six Nations, the annual tournament that pits Europe’s best national teams against each other that concludes in Lyon this weekend .
Full contactwhich has been renewed for a second season, is one of the most visible signs that rugby’s private equity investors are starting to make their mark on the workings of the game and the market itself.
As rugby begins to look beyond a period of financial turmoil caused by the pandemic, investors and game executives are now shifting focus to how more fundamental changes could help it grow and win over young fans.
“Rugby has been very good at competing with itself for a long time, but we are overcoming this,” Tom Harrison, chief executive of Six Nations Rugby and a former professional cricketer, said of the sport’s fragmented structure. “We are thinking about the health of the game as a collective. And this is an extremely important thing.”
In addition to the push towards streaming, the Six Nations was a late adopter of changes that other sports implemented long ago. This year’s championship marked the first time each player had their name on the back of their shirt, a move adopted by the English Premier League more than 30 years ago.
By investing throughout the game, CVC is in pole position to reshape it. The tournament no longer conflicts with the national English club championship. The Premiership, of which CVC bought a 27% stake in 2018, is on hold for the duration of the Six Nations. The company also has a significant minority stake in the United Rugby Championship, an annual tournament featuring teams from Ireland, Italy, Scotland, South Africa and Wales.
Clarry told the Financial Times there is now a path to “significant growth” that will be reflected in the club’s game, with a global calendar aligned to create a “year-long festival” for fans.
There is also the possibility of the sport’s major players coming together to form an “F1 of rugby”, with a management team capable of developing the brands, competitions and digital platforms, he said.
According to three people with knowledge of the matter, the possibilities are being explored by the sport’s senior decision-makers, as part of the “Amplify Project”. The discussions, which concern rugby competitions in which CVC has a stake, could also involve other groups.
Private equity’s interest in rugby extends beyond the CVC. US-based Silver Lake recently increased its stake in New Zealand Rugby’s commercial arm to 7.5%. Despite opposition from the national players’ association, the technology-focused company, which has several investments in sports, acquired an initial 5.7% stake for NZ$200 million in 2022. Some of that money was used to launch NZR+, a streaming platform.
South Africa may soon follow suit, with a vote expected in May on whether to sell a stake in a new business entity to Seattle-based Ackerley Sports Group. The proposed deal for a 20% stake in the new business would raise $75 million for SA Rugby.
Explaining the rationale for the deal, SA Rugby said: “A private equity partnership offers not only an immediate financial boost, but also crucially provides the expertise, networks and resources needed to increase the commercial value of South African rugby.” .
However, CVC did not have an easy life. The pandemic has hit Premiership clubs hard, who have used CVC funds to stay afloat rather than fund growth. Worcester Warriors, Wasps and London Irish have collapsed, reducing the league to 10 teams this season. Without the investment, club officials say the league itself may not have survived.
Andrew Umbers, managing partner at Oakwell Sports Advisory, estimates that the pandemic has resulted in a loss of revenue of more than £250 million for Premiership clubs, more than £200 million for teams competing in the Six Nations, and has delayed the implementation of CVC’s commercial strategy for sport for up to four years.
Since CVC and Silver Lake first invested in rugby, the media market for live sport in Europe has also softened, frustrating aspirations for a dedicated rugby channel on pay-TV.
The sport is also facing challenges related to reduced youth participation and growing concerns about the health risks associated with playing at the highest level.
While the sport’s leading figures agree that private equity is a force for change, some complain that reform has been slow.
“The dial hasn’t been changed enough,” said a senior figure in English football. Another said “little progress” had been made on the key issue of increasing the value of media rights in sport, and that change was proving “much more difficult than they expected”.
Others warn that the number of stakeholders involved could complicate CVC’s ambitions to create a single management company similar to F1, which the company owned until early 2017. “It makes sense, but it’s more easier said than done,” one media outlet said. expert.
Others see the sport moving in the right direction. Premiership boss Simon Massie-Taylor said there were still “flaws” in rugby due to “how things are structured” but that the sport had improved a lot in working together.
Clarry is also optimistic. A revamp of the global calendar, unveiled by World Rugby’s governing body last October, should help limit clashes between domestic leagues and flagship international events. New competitions are on the way, such as the Nations Cup in 2026, in a move designed to broaden audiences and increase revenue.
“This series of steps would result in a better product for players, fans and business partners, and more revenue to reinvest in the game,” Clarry added. “This is the direction of travel.”