CVC Capital Partners has agreed to pay up to £365m for a stake in the Six Nations rugby union tournament, as the private equity group seals a long-delayed deal that is crucial to its strategy of becoming the sport’s financial powerhouse.
The body that runs Europe’s top annual national rugby tournament announced the deal on Thursday. Luxembourg-based CVC will acquire a one-seventh share in the Six Nations, with the remainder controlled by the national unions that participate in the competition: England, France, Ireland, Scotland, Wales and Italy.
Discussions over a stake purchase started almost two years ago but were repeatedly pushed back because of the coronavirus pandemic. The postponement of last year’s tournament for several months and the absence of spectators in stadiums has led to huge revenue shortfalls among the unions.
That led CVC to insert extra clauses into the deal so that some of the £365m investment will be deferred and is dependent on conditions being met around the financial performance and solvency of the unions and on games being resumed, said people familiar with the matter.
It means that if games were to be called off in the future, or if the sport suffered financially, the value of CVC’s investment could fall.
The Six Nations had sought greater clarity on the financial impact of the pandemic before completing the deal. CVC was offering about £300m for its stake last year, according to people familiar with those discussions.
“This external investment is an important validation of what Six Nations Rugby has achieved to date and is a key next step as we invest to grow the game on the world stage,” said Ben Morel, chief executive of Six Nations Rugby, in a statement.
CVC did not immediately respond to a request for comment.
The acquisition is an important step in the buyout group’s plans to become the biggest commercial player in one of the world’s favourite sports.
CVC, a former owner of Formula One and MotoGP, has increasingly sought deals in sport in recent years. It is involved in a proposed deal to invest in Italy’s Serie A football league and has held discussions over taking an ownership stake in the US National Basketball Association franchise San Antonio Spurs.
But it has been particularly active in rugby, spotting an opportunity to become the sport’s dominant commercial player by taking minority stakes in competitions and governing bodies. CVC wants to use this influence to bundle together broadcast and commercial rights to these contests, in an effort to raise their collective value.
In 2018, CVC acquired a 27 per cent holding in Premiership Rugby, the top tier of English club rugby union, for £200m. In May last year, it paid £120m for a 28 per cent share in Pro14 Rugby, an annual tournament featuring teams from Ireland, Scotland, Wales, Italy and South Africa.
Earlier this year, however, CVC lost out to rival US private equity group Silver Lake on a deal to invest in New Zealand Rugby, the body that runs the All Blacks, the sport’s dominant men’s team.