In this World Cup year the lasting legacy from it may well be an international captain raising the Webb Ellis trophy above his head bringing an end to a great international competition, showcased for the first time in the land of the rising sun. That’s certainly what we would expect, but 2019 so far has been a year of proposed change and uncertainty. A restructure of the Welsh regional game, an annual nations league replacing current championships and most recently a private equity firm proposing a huge investment in the Six Nations, the times are certainly a changing. All of this might mean the legacy of 2019 might very well be one that goes much further than crowning a world champion for the ninth time.

 

The Dragons Den

CVC is essentially a world leader in private equity. They make an investment in a product in return for a stake in it, with the expectation that the investment will bring about future financial profit. The product in this instance is the Six Nations, the investment a reported £500 million in return for a 30% stake. Financially the benefits to the Six Nations would be a great boost in the short term at least. For this initial windfall each nation would be agreeing to give up 5% of the annual turnover generated by the Six Nations championship. To this point it does appear that the initial financial reward does outweigh the surrendering of 5% of the product as such.

 

Terrestrial TV to lose another treasure 

In what is solely a commercial for profit move by CVC there are sporting matters to consider. For the good of the Six Nations this must be at the forefront of any negotiations between the involved unions and CVC. This is not however the first venture by CVC into the world of sport they have as recently as December bought a minority 27% stake in the English Rugby Premiership as well as being the previous owners of Formula One. This will be of some comfort to the Six Nations and indeed their fans. Despite this there will be some form of change, it will mean the games are taken from free to air television which will mean millions losing access to the games but will bring more money in. Whether CVC view possible promotion and relegation a possible is unclear but it is likely the current nations involved would be opposed to this. The business structure of any deal would make it difficult to introduce any new nations in any case.

 

Nations Championship to hit brick wall

Rugby chiefs are meeting in Dublin this week to discuss the proposed Nations Championship. Being met with scepticism initially has caused those proposing the idea to amend a few of the details including ensuring the playing calendar doesn’t become more congested. It is suggested such a championship would bring about a 40% increase in the revenues of the unions involved. The proposed investment of CVC in the Six Nations would make a Nations Championship almost impossible so there is most definitely a decision to be made.

 

Better sport equals better money

The international game is sure to see radical change in the coming months and years, what those changes will be we are still unsure. The huge offer on the table from CVC will be difficult to reject. In any walk of life and particularly sport, money talks. The investment means essentially sticking to the status quo in terms of the rugby calendar but with a healthier bank balance. The problem comes when other firms or individuals want to make other future offers and the unions start to lose their control of the sport. The interest of firms such as CVC should be viewed as a huge positive, successful investors identifying money making potential speaks volumes for the health of the game. However, work must be done to ensure rugby remains viewed predominantly as sport and doesn’t start slipping towards entertainment. Great sport brings about great entertainment this cannot be said of the contrary. It will be interesting to see what the outcome of it all will be. The supporters of the man holding the World Cup aloft in October will hopefully look back on 2019 as a year of glory where some commercial changes brought little disruption to the sport they love.

 

Written by Stefan Hamilton

Comments