Private equity firm CVC Capital Partners has completed a deal to acquire a significant stake in Premiership Rugby, the organisation that oversees the top tier of English rugby union, with the investment set to be targeted for clubs to boost their infrastructure and fan experience provisions.
Financial terms of the deal were not disclosed, but CVC has reportedly acquired a 27% stake. The BBC said the investment is worth more than £200m (€221.6m/$253.3m), while The Guardian newspaper pegged the deal at around £230m.
The 12 Premiership clubs, as well as current Championship leader London Irish, which earlier this week announced a deal to play at the new Brentford Community Stadium, will each receive around £18m from the CVC partnership.
The investment is expected to complete in the first quarter of 2019 and represents the latest commitment by CVC to the sports, media and entertainment sector; having previously led investments in Formula One and MotoGP. In September, Premiership clubs opted not to accept a £275m offer from CVC for a 51% stake in the league.
“Around 18 months ago the board endorsed a strategy to take club rugby to a new level,” said Premiership Rugby’s chief executive Mark McCafferty, who confirmed the investment deal was agreed unanimously by the clubs.
“Since Premiership Rugby was formed in 1997, our owners have invested more than £400m to build up the clubs and the competition which today sees the Gallagher Premiership broadcast in over 200 countries around the world. It was the perfect time for us to identify the right partner to help accelerate our next phase of growth.
“We are delighted to have partnered with CVC, a company which has a very impressive track record of helping to grow sports businesses such as Premiership Rugby. Further developing the global appeal and following for the Gallagher Premiership through investment in the product and fan experience is one of the main priorities for the partnership.”
While some clubs will use the CVC investment for stadium improvements, there are concerns that others will look to use the money to strengthen their playing squads, contributing further to escalating wages in the Premiership.
McCafferty added, according to The Guardian: “We have a salary cap in place and that’s not moving for the next couple of years. We are investing in operations and infrastructure, that’s the key. We will be able to invest at a greater level and build the competition out further.”