Premiership Q and A

Here Press Association Sport examines what is being discussed, the viability and possible ramifications.

What is being discussed?

The Gallagher Premiership could be taken over by a private equity firm. CVC Capital Partners have approached the Premiership with a view to taking a controlling stake in the league. The 51 per cent stake they are seeking would cost £275million.

Who are CVC?

CVC Capital Partners’ ownership of Formula One was a success. The private equity firm, established in 1981, manages in the region of £50billion of assets. In the sporting arena, CVC is best known for its decade-long ownership of Formula One which ended in September last year when it was sold to Liberty Media for £3.6billion.

What do they see in the Premiership?

A revenue stream ready to be expanded. The acquisition of F1 was an unqualified success with their initial outlay of £1.5billion in 2006 recouped many times over and while the numbers involved in the Premiership takeover are far smaller, it is viewed as a competition ripe for expansion.

What are the risks?

Club rugby appears to have hit a ceiling, at least in its current format. It remains below football’s second tier – the Championship – in terms of popularity despite attempts to grow the game, while overseas expansion has failed miserably, as seen in the small crowds generated by games staged in the United States. International rugby is the sport’s engine room and while the spending power of the French clubs is a challenge to their union, on these shores there is no obvious avenue to generate additional growth.

Does the Premiership need investment?

Desperately. All 13 clubs represented by Premiership Rugby except Exeter operate at a loss with some owners down on their investment to the tune of millions, pumping in money out of their commitment to the game alone. The last major injection of cash came in the existing broadcasting deal with BT Sport, which ends in 2021 and is worth in the region of £200million. In business terms, the Premiership is a basket case.

What would be the ramifications for England?

The Rugby Football Union will be monitoring developments closely. Twickenham is powerless to intervene but knows that if the deal proceeds, CVC would add a new stakeholder to a sport where club versus country tension simmers constantly and frequently bursts into full-blown hostility. What view CVC would have on the agreement governing release and compensation for players called up by England is unknown.

What happens next?

For the takeover to proceed all 13 of the Premiership’s member clubs – the 12 that currently make up the top flight plus London Irish – must give their approval when presented with the terms of the deal at a meeting on Tuesday.