Since the news broke that CVC Capital Partners would be investing over £200m for a 27% stake in Premiership Rugby, rumours have been rife about what it might mean for the competition.
CVC’s track record in sport is one of commercial success, as exhibited by their involvement with Formula 1 most recently, but has also caused its fair share of controversy, not least for allegations centred around former F1 chief executive Bernie Ecclestone and concerns over the sporting value of the product they managed.
It seems as if the first domino to fall in CVC’s involvement in the Premiership is that of CEO Mark McCafferty, who will be leaving his role at the end of the season and is set to become an advisor to CVC. The man tasked with succeeding McCafferty is Darren Childs, the former CEO of UKTV, Britain’s biggest multi-channel broadcaster.
Ian Ritchie, Chairman of Premiership Rugby, said, “Mark has played a pivotal leadership role in the development of Premiership Rugby since 2005. The growth of the Club game in England and Europe during that time has been tremendous.”
He added, “As the game evolves under new ownership, we are excited about the expertise and insight that Darren will bring from his experience leading fast-growing media businesses. The Board looks forward to working with Darren to further develop the Premiership Rugby brand, product, digital and media execution.”
Childs has an extensive background in the media industry, not only enjoying significant success in his current role with UKTV, which includes increasing its revenue by 66% and almost tripling the group’s profits, but he has also worked with media giants such as MTV, HBO and the BBC. His hiring is clearly aligned with the Premiership’s goals of becoming a more commercially-appealing entity, something which they have cited as one of the key reasons behind their decision to accept the investment from CVC.
Speaking on his new position, Childs said, “I am excited about the challenge that working in a new industry brings, especially one on the cusp of a transformation like rugby. I have always admired the values rugby demonstrates on the pitch and in the community and it will be a fantastic opportunity to work with the clubs and the board to create even more fans of the sport. Premiership Rugby and European Professional Club Rugby are full of thrills and the future will certainly provide many more.”
McCafferty’s move to CVC should also bring the two bodies into an even closer relationship, as not only will McCafferty work as an advisor to CVC, he will also retain his position representing the clubs on the Professional Game Board. The PGB is made up of representatives from the RFU, Premiership Rugby, the Championship clubs and the Rugby Players’ Association, and is tasked with monitoring and managing all aspects of the professional game in England. He currently sits on the board alongside Ian Ritchie and Bruce Craig, as part of the Premiership’s representation.
By retaining his spot on the PGB, McCafferty brings a direct link to CVC to the group, with the private equity firm having also expressed interest in the RFU and Six Nations in recent months.
McCafferty said, “Gallagher Premiership Rugby has become a brilliant and captivating competition for our fans, as the closeness of this season fully demonstrates, and it does what we believe professional sport should always do – demand excellence, create intense rivalry but mutual respect, and inspire people of all ages to become part of it. I am looking forward to ensuring an effective transition with Darren and to my continued involvement in rugby, working from a new vantage point alongside CVC.”
During McCafferty’s time as CEO of Premiership Rugby, the competition has vastly increased its revenue from TV deals, negotiated a new title sponsorship with US insurance giants Gallagher, brokered two agreements between the Premiership and the RFU and helped establish the PGB, upon which he now sits.
Formula 1’s profits shot up under CVC’s stewardship and the organisation, which CVC bought a majority stake in for £1.4b, was valued at £8b when they sold up in 2016. For all the commercial value that was added, however, criticism that the product became poorer during that time has been rife over the last few years, not to mention a dramatically falling viewership due to the decision to move the sport of a free-to-air coverage.
Today’s announcement is another step towards a closer working relationship between CVC and the Premiership, something which should excite and concern fans at the same time.
CVC won’t be afraid of cracking some eggs to make an omelette and, as a private equity firm, are in this venture, first and foremost, to make money. The silver lining to this for the Premiership clubs is that their latest financial reports show they are certainly in need of some extra revenue. It seems as if the two entities’ interests are certainly in alignment at this point in time.
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