The response of one Premiership club official to the takeover bid for the league by the private equity company CVC was succinct: the devil will be in the detail. An immediate cash injection for each side of £17m was the lure but a halving of income from central funds made the longer-term prospect look risky.
And there was the issue of control. If a private company took a 51% stake in the Premiership, it would be in charge of the group of the Premiership, in effect making it a single entity like MLS in United States football. Clubs would lose their independence and their officials, who have seats on a number of decision-making bodies, such as the professional game board in England and that of the organisers of the European Champions Cup, would face being dumped. Losing control proved a step too far for the club owners this week and CVC now has to decide whether to tailor its proposal.
Ceding control would have brought World Rugby’s regulation 14 into play. It is concerned with ownership of clubs and gives effect to “the underlying intention that no entity or group of entities, acting alone or in concert, shall control, or be in a position to control, either directly or indirectly, more than one club”.
Darren Bailey is part of the sports law team at Charles Russell Speechlys, a co-founder of Sport360 consulting and a former director of football governance and regulation at the Football Association. In 2000, he became the first legal director of the then International Rugby Board, having rewritten the sport’s regulatory code after it embraced professionalism in 1995, and he was in position for nine years.
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“The regulations are designed to show there is control from the unions throughout the world and that nothing can take place in one territory that will cause difficulties in another,” he says. “I am sure that the clubs are mindful of regulation 14 and rugby union is a more regulated structure than private companies are used to. They would need to understand the framework they are operating in with a global sport demanding levels of consistency. Any breach of the regulation would leave them needing the consent of the RFU.”
Bailey, who was involved in the game when the European Cup grew quickly into a successful competition, believes the interest shown in the Premiership gives club rugby the opportunity to press the reset button. “To be successful, the English clubs, and the French, may have to adopt a more Americanised approach and become less European,” he says. “It would mean, for example, an end to relegation. Clubs need to turn themselves into global brands which means selling themselves and taking more risks to make rugby entertaining. They need to look beyond broadcasters, sponsors and the distribution they receive from the international game. They have the opportunity to think beyond the short term and act collectively both for their individual benefit and the wider one of the game itself.
“The financial driver in rugby is the international game, but the economic imbalance between the hemispheres is one of the biggest challenges rugby is facing. In the past, playing for your country had sufficient pull but these are worrying times for Australia and South Africa. They cannot raise enough revenue in the south where they are playing too much rugby of the same calibre. They will look at the potential growth in the Premiership with anguish at a time when they are suffering but still producing many of the best players.”
The former England second-row Ben Kay has called for the RFU to take over the Premiership, doing what they failed to do back in 1995 when the vacuum the governing body’s indecision created was filled by wealthy backers who largely had little previous involvement in the sport. “What is the long-term sustainability of the international game?” asks Bailey. “You only have to look at the impact of overseas players in the Top 14 had on the national side in France.
“An RFU takeover would allow it to harmonise refereeing, so that the breakdown was no longer a surprise for English players in the Test arena, and they could play with the intensity Eddie Jones wants. Rugby has to evolve in a complementary way rather than explosions taking place in one part of the game or structure.
“It is an intriguing time for club rugby and its relationship with the international game. The relationship between the economic powerhouses, England and France, and the rest of the game is full of tension. There needs to be a proper conversation because if the Premiership clubs continue to make losses, they could be reduced to three or four superclubs.”
If CVC’s bid failed to attract the unanimous support of the 13 Premiership shareholders, its interest has opened a door. “It is a good time for outside investors to be coming into the sport,” says Bailey. “It depends what their long-term plan is. The owners would be concerned that they would not be involved for enough time to fully pay them and they won’t want to lose their autonomy, not least because they know the game.
“The interest should be welcomed, providing the model is right and complementary. The grassroots have to be looked after with an allocation of profits, but I do not think this could be done on a purely domestic setting. It has to be global and remain within the parameters of World Rugby’s regulatory code. What CVC did brilliantly in Formula One was exploit a global framework. In rugby, that would mean a significant marketing of the Premiership, more iconic grounds and bigger crowds. Big companies do not come in unless they feel there is money to be made and it should give the game confidence. You could get a World Rugby Inc in the future, but who would control it?”
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