Sports

Private equity firm CVC lands $509 million deal for international rugby tournament

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Key Points
  • It brings CVC's total investment in professional rugby union to more than £700 million.
  • It's also bought the rights to the Autumn Nations Cup, a new competition that failed to fully materialize last year due to Covid-19.
  • The 14.3% in the Six Nations is not a controlling stake.
Liam Williams of Wales kicks upfield as Tom Curry of England charges down during the Guinness Six Nations match between Wales and England at Principality Stadium on February 27, 2021 in Cardiff, Wales.

LONDON — Global private equity firm CVC Capital Partners has paid £365 million ($509 million) for a 14.3% stake in the Six Nations, an annual men's rugby tournament in Europe.

The announcement Thursday follows similar investments by the firm involving British and Irish domestic teams, the Gallagher Premiership and Guinness Pro14. It brings CVC's total investment in professional rugby union to more than £700 million.

The new deal, which has taken 18 months to finalize, sees each of the rugby union nations involved — England, Ireland, Scotland, Wales, France and Italy — selling a share of their commercial revenue to CVC.

It's also bought the rights to the Autumn Nations Cup, a new competition that failed to fully materialize last year due to Covid-19. It will include European nations and the big Southern Hemisphere rugby nations, such as Australia and New Zealand. This should provide a big increase in earnings for CVC.

The 14.3% in the Six Nations is not a controlling stake, however. It's exactly a seventh share, giving CVC the same voting rights as each nation. The next set of TV rights are up for sale and it's likely that the competition could see games taken away from free-to-air TV, but it would need at least three of the nations to agree to that deal.

On Friday, reports suggested that CVC is also set to buy a 15% to 20% share in the commercial business of South Africa's rugby union team. It would expand CVC's influence beyond Europe's rugby nations for the first time and would see the private equity firm have a stake in seven of the world's top 10 rugby nations.

This follows CVC's failed attempt to invest in New Zealand Rugby earlier this year, losing out to rival U.S. equity firm Silver Lake.

TV rights

The value of TV rights has stagnated in recent years but CVC is still expected to net between £20 million and £30 million a year, which is seen as a decent return on its initial investment.

CVC also believes that it can increase revenues though better marketing, branding and use of data, something that some believe the Six Nations has previously failed to exploit. It's expected that CVC will remain in the sport for 10 years before looking for potential buyers, but the six rugby unions will have some control over who the share is sold to.