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Tue 26 May 2020 | 11:00

Will this deal speed up South Africa's move north?

Will this deal speed up South Africa's move north?
Tue 26 May 2020 | 11:00
Will this deal speed up South Africa's move north?
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SPOTLIGHT: The announcement that CVC Capital has teamed up with the Pro14 may just speed up South Africa’s reported move to the Northern Hemisphere and finally kill off the SANZAAR alliance.

According to media reports CVC Capital Partners – a private equity and investment firm – will hasten the game’s move towards a private-equity driven future.

The CVC move has also heightened the contrast and potential divide between the cashed-up Northern Hemisphere professional leagues, and the fragile shell of SANZAAR in the south.

The Luxembourg-based group paid US$400 million for a 27 percent stake in the English Premiership two years ago and added the cross-border Pro14 – a tournament involving clubs from the three Celtic nations (including Northern Ireland), Italy and South Africa – to their portfolio over the weekend.

The deal, which had been put on ice during the early stages of the COVID-19 crisis, sees the equity group tale a 28 percent stake in the tournament after paying $240.

“[CVC has] a strong belief in the long-term potential of rugby for the fans, the players and the clubs, and what we can achieve in partnership with Pro14,” said the company in a statement.

While the immediate benefit of the partnership is a massive cash injection into a tournament that will be, like every major professional sports league, affected by the coronavirus pandemic, the ripple effect of the deal is likely to be felt around the rugby world.

South Africa will likely increase their involvement in the competition from two teams – the Cheetahs and Kings – which could expedite their long-talked-about exit from Super Rugby, although they have expressed a desire to retain a presence in the south also.

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Of greater importance to the hoped-for renovation of rugby’s chaotic global calendar, it is believed CVC will seek alignment between its investments – its US$600-million deal to buy into the Six Nations is also back on track according to a report in London’s Financial Times – to play a leading role in creating a global club world cup.

That move should prompt New Zealand Rugby to press fast forward on Aratipu, the review into the future of Super Rugby.

It is crucial that NZRU has a workable, saleable product to take to market with some urgency.

At the moment the contrast is uncomfortable for those charged with keeping the best players in the game in New Zealand: private money is being poured into Europe’s big tournaments; nobody yet knows with any certainty what Super Rugby will look like in 2021.

This month, the Herald revealed that the national body had been wooing global equity partners, including multi-billion dollar US firm Silver Lake, a tech specialist that has also successfully invested in mixed martial arts phenomenon UFC, the Madison Square Garden Company (which owns the New York Knicks and New York Rangers), and Manchester City’s parent company.

“You would set up a subsidiary company of NZ Rugby and get investment into that company in some form of partnership,” a senior NZ Rugby source said.

“You put commercial assets into that company – whether that’s in combination with SANZAAR partners and something like Super Rugby in its reincarnated form, or the Rugby Championship.”

The source also noted the NZRU was “miles away” from signing a deal, but the Pro14 deal and continued uncertainty over SANZAAR’s future should rid the national body of any complacency.

CVC’s massive investment in Northern Hemisphere rugby (and to an extent South African) points to their investment belief that rugby’s reach and commercial opportunities will continue to rise in the wake of the pandemic.

NZRU will now be acutely aware they cannot afford to be left behind.

Source: RugbyPass

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Will this deal speed up South Africa's move north? | Rugby365