CVC to the rescue

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Some 24 years after the amateur era of rugby union officially ended, we may be slowly seeing the sport become a modern professional machine as CVC begin their sweep of the sport.

The private equity firm are on the cusp of purchasing a stake in the Guinness Pro14 for a reported £120m, having already paid £200m for a piece of the Gallagher Premiership. An indicator of the gap between the leagues, no question about it.

Their increasing influence over Northern Hemisphere club rugby, with suggestions they could buy into the Six Nations as well, has raised concerns in the rugby world over what impact they will have on the game.

A frequently used quote has been that from Formula One team Force India’s deputy team principal Bob Fernley, who rather obscenely described CVC as “raping the sport” during the decade they spent as owners.

They undoubtedly raised the commercial revenues of F1, with some suggesting they made a close on £3bn profit from their time in motorsport, but many complained the standard of racing was poorer and audiences were down due to a move to pay-per-view television.

However, there are some noticeable differences between CVC’s stint as F1 owners and their investments in rugby union.

Firstly, the Pro14 is already on pay-per-view television, along with the majority of Northern Hemisphere club rugby, and a reported plan to combine commercial rights with the Gallagher Premiership would likely see an increase in audiences if anything.

Owen Farrell Saracens
The Pro14 is on Premier Sport, while the Premiership is on BT

And secondly, CVC will not become the majority owners of either league, having purchased just a 27% stake in the top level of the English domestic game, and reports suggesting their investment in the Pro14 will gain them around 30% of the company.

This leaves the Welsh, Irish, Scottish and Italian unions with the rest of the competition, preventing CVC from pushing through any major changes that would potentially harm the game, such as an increase in the number of games played per season.

From a Cardiff Blues perspective this financial boost could not come sooner, with the money situation at the Arms Park not exactly encouraging currently. In fact, it’s far from it.

The creditor list is fairly lengthy, with Arms Park owners Cardiff Athletic Club having been informed that the money they are owed in rent is some way down that list.

We are also trying to compete in both the league and in European competitions with a budget of just £6m. This is the second lowest of the Welsh regions, would appear to be the sixth lowest in the Pro14 and was the lowest in this season’s Heineken Champions Cup.

If the £120m is divided up 14 ways between each team, as it should be and CVC would want it to be to ensure the product they are trying to sell is improved, then it’s £8.5m into the grateful coffers at the Arms Park.

Matthew Morgan Connacht
CVC will want to see an increase in quality on the field

Then it’s over to Alun Jones and Richard Holland to ensure that this money is spent wisely trying to ensure the business remains sustainable and seeing us through to a hopefully positive future with an improved Cardiff Arms Park.

There should also be some money to boost the playing squad in the short-term though, and with positions across the front five and fly-half looking extremely thin on the ground in terms of quality, or even just bodies, that may well be a priority.

On a wider level there is a hope that CVC investing in both the Pro14 and Premiership could see a future where the leagues become closely linked, and not just in a TV deal sense.

The reports are that there is already a plan on the table for the respective winners of each league’s Final to have a one-off ‘champion of champions’ game, if you will, while there is even talk of merging the play-offs of each league.

Having previously looked at how an Anglo-Welsh league would be huge for the Welsh regions, if all this ended in a British and Irish League then that would similarly be a brilliant outcome, providing regular Anglo-Welsh games with the associated commercial and attendance boosts.

All that is further down the line though, for now it’s all about CVC and the Pro14. Whatever you think of them, they could well end up saving Cardiff Blues. Then it’s down to us to make a success of it, and the game to prevent them running riot.

3 comments

  1. Some time ago, indeed it as well was posted on Vardiff Rugby Life, there was speculation reference to Cardiff Blues being linked to. James Ratti and signing of Rory Thornton.However it Noe seems to have gone rather quiet, are there contract negotiations or has interestcooled. Or is it the perfidious tossprays? Can you shed some light on the matter John Llewelyn

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    1. Hi John,
      It’s unclear what is going on behind the scenes at the Arms Park currently, both players have been spoken to but have now gone off on holiday which may explain the delay, but there’s also not much leadership taking place from our end.

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