Preparations for the Six Nations Championship got under way earlier than usual this year, as star players turned up for the glitzy London premiere of the competition’s debut series on streaming platform Netflix.
Also in attendance was Nick Clarry, the managing partner responsible for CVC Capital Partners’ sports investments, including the Six Nations, the annual tournament pitting Europe’s top national teams against each other that wraps up in Lyon this weekend.
Full Contact, which has been renewed for a second season, is one of the most visible signs that rugby’s private equity investors are beginning to make their mark on how the game operates and markets itself.
As rugby union starts to look beyond a period of financial turmoil caused by the pandemic, investors and executives in the game are now switching focus to how more fundamental changes might help it grow and win over young fans.
“Rugby has been brilliant at competing with itself for a long time, but we’re getting through that,” said Tom Harrison, the chief executive of Six Nations Rugby and former professional cricketer, on the sport’s fragmented structure. “We’re thinking about the health of the game as a collective. And that is a hugely important thing.”
As well as the push into streaming, the Six Nations has belatedly adopted changes that other sports implemented long ago. This year’s championship marked the first time that every player has had his name on the back of his shirt, a move the English Premier League adopted more than 30 years ago.
By investing across the game, CVC is in pole position to reshape it. The tournament is no longer clashing with England’s domestic club league. The Premiership, in which CVC bought a 27 per cent stake in 2018, is on hold for the duration of the Six Nations. The firm also owns a significant minority holding in the United Rugby Championship, an annual tournament featuring teams from Ireland, Italy, Scotland, South Africa and Wales.
Clarry told the Financial Times that there was now a path to “significant growth” that will feed back into the club game, with a global calendar aligned to create a “year long festival” for fans.
There was also the potential for key players in the sport to come together to form a “F1 of rugby”, with one management team in place to develop the brands, the competitions, and digital platforms, he said.
The possibilities are being explored by senior decision makers in the sport, under “Project Amplify”, according to three people with knowledge of the matter. The discussions, which involve rugby competitions in which CVC has a stake, could also involve other groups.
Private equity interest in rugby stretches beyond CVC. US-based Silver Lake recently increased its holding in New Zealand Rugby’s commercial arm to 7.5 per cent. Despite opposition from the country’s association for players, the technology-focused firm, which has several sports investments, took an initial 5.7 per cent stake for NZ$200mn in 2022. Some of that money has been used to launch NZR+, a streaming platform.
South Africa could soon follow suit, with a vote due in May on whether to sell a stake in a new commercial entity to Seattle-based firm Ackerley Sports Group. The proposed deal for a 20 per cent in the new business would raise $75mn for SA Rugby.
In explaining the rationale for the deal, SA Rugby said: “A private equity partnership offers not just an immediate financial boost but also crucially provides the expertise, networks and resources necessary to enhance the commercial value of South African rugby.”
However, CVC has not had an easy time of it. The pandemic battered Premiership clubs, which used CVC funds to stay afloat rather than fund growth. Worcester Warriors, Wasps and London Irish collapsed, shrinking the league to 10 teams this season. Without the investment, club executives say the league itself may not have survived.
Andrew Umbers, managing partner at Oakwell Sports Advisory, estimates that the pandemic resulted in lost revenues of over £250mn for Premiership clubs, more than £200mn for the teams that compete in the Six Nations, and pushed back the implementation of CVC’s commercial strategy for the sport by up to four years.
Since CVC and Silver Lake first invested in rugby union, the media market for live sport in Europe has also softened, frustrating aspirations for a dedicated rugby channel on pay-TV.
The sport is also facing headwinds of reduced youth participation and growing concerns about the health risks associated with playing at the highest level.
While senior figures across the sport agree that private equity is a force for change, some complain that reform has been slow.
“The dial has not been changed enough,” said a senior figure in the English game. Another said that “little progress” had been made on the key issue of growing the value of the sport’s media rights, with change proving “much harder than they’d realised”.
Others caution that the number of stakeholders involved could complicate CVC’s ambitions of setting up a single management company akin to F1, which the firm owned until early 2017. “This is something that makes sense but it’s easier said than done,” said one media rights expert.
Others see the sport moving in the right direction. Premiership chief Simon Massie-Taylor said there were still “kinks” in rugby because of “how things are structured”, but that the sport has got a lot better at working together.
Clarry is also optimistic. A revamp of the global calendar, which was unveiled by governing body World Rugby last October, should help limit fixture clashes between domestic leagues and flagship international events. New competitions are coming, such as the Nations Cup in 2026, in a move designed to build audiences and increase revenues.
“This set of steps would result in a better product for players, fans and commercial partners, and more revenues to reinvest back in the game,” Clarry added. “That is the direction of travel.”
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