February 3, 2023

Liam Williams of Wales appears as Tom Curry of England storms down during the Guinness Six Nations game between Wales and England at the Principality Stadium on February 27, 2021 in Cardiff, Wales.

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

Thursday’s announcement follows similar investments by the company involving UK and Irish domestic teams, the Gallagher Premiership and Guinness Pro14. CVC’s total investment in professional rugby union is more than £ 700 million.

The new deal, which took 18 months to sign, calls for all of the rugby union nations involved – England, Ireland, Scotland, Wales, France and Italy – to sell part of their commercial revenues to CVC.

It also bought the rights to the Autumn Nations Cup, a new competition that wasn’t fully implemented last year due to Covid-19. It will include European nations and the major rugby nations of the southern hemisphere such as Australia and New Zealand. This should lead CVC to a significant increase in earnings.

However, the 14.3% in the Six Nations are not a majority shareholding. It is exactly a seventh stock that gives CVC the same voting rights as any nation. The next TV rights are up for sale and it is likely that the competition could take games off free-to-air television, but it would take at least three nations to approve the deal.

CVC is also reported to acquire a 15% to 20% stake in the South African rugby union team’s commercial business on Friday. This would, for the first time, expand CVC’s influence beyond European rugby nations, bringing the private equity firm to seven of the world’s top ten rugby nations.

This follows on from CVC’s failed attempt to invest in New Zealand rugby earlier this year, losing to rival US public company Silver Lake.

TV rights

The value of TV rights has stagnated in recent years, but CVC is still expected to generate net income of between £ 20 million and £ 30 million a year, which is considered a reasonable return on its original investment.

CVC also believes it can increase sales through better marketing, branding, and use of data, which some believe the Six Nations have not previously exploited. CVC is expected to stay in the sport for 10 years before looking for potential buyers, but the six rugby unions will have some control over who the stock will be sold to.