England’s top rugby clubs are set to receive an early Christmas present after agreeing a restructured deal with former F1 owners CVC Capital Partners.
RugbyPass understands that Premiership Rugby Ltd have thrashed out a new deal, set to be signed next month, after an initial offer of £275m for a 50 per cent stake in English rugby’s professional game was turned down with the clubs believing they were worth double that figure.
After lengthy talks, it appears CVC have agreed to still pay over £200m but will only receive what has been described as a “substantial minority investment”, which could be around 30 per cent of PRL. However, there is an incentive for CVC to deliver increased income from sponsorship and television rights. If CVC replicate the kind of increased earnings that transformed F1 – which they sold to Liberty Media for around £6 billion – they will be rewarded with a bigger share of PRL.
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Club owners have described the deal being thrashed out as “transformational” and the news of this cash windfall comes just 24 hours after the Rugby Football Union announced losses for the last financial year of £30.9m and admitted they may have paid too much for the current eight-year deal signed with PRL in 2016. Under that contract, the RFU paid £225m with England getting more flexibility and greater player access in return, but when that deal runs out the Union will have to negotiate with CVC.
The Premiership club all need to increase earnings and cumulative losses for 2017-18 were expected to reach £35m for the 12 clubs, an average of nearly £3m each. They rely on owners to cover the massive shortfall with Wasps Derek Richardson having increased his commitment to the club to nearly £20m, which still puts him a long way behind Saracens owner Nigel Wray who has been spending millions on his club for 20 years.
Despite mounting losses and the need for clubs like Bath, Harlequins, Saracens and Newcastle to fund costly ground improvements, CVC believe they can generate enough money to give themselves an increasing influence on club rugby in England.
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