Is private equity a pot of gold for rugby league?

Commissioner Gary Weiss, whose stellar business background includes significant work in mergers and acquisitions, has been asked to spend some time deciphering the various options that have been put before the governing body.

There have been suggestions the game and its clubs could receive as much as $600 million through external investment, although Weiss insisted it was too early to put a figure on the potential for private equity.

Regardless, Weiss will have a decisive say. His recommendations could ultimately decide whether it even comes across the commission’s desk for further consideration after clubs pushed the governing body to do a deeper dive into the proposals.

While some clubs are licking their lips at the prospect of finding a pot of gold at the end of the private equity rainbow, Weiss is taking a more pragmatic and measured approach.

“There is significant interest in the game,” Weiss said. “We’re open to all opportunities. Every expression of interest will be considered, but importantly we will take our time to determine what the right strategy is.

“It has to be for the benefit of all stakeholders and for the long-term future of the game.”

Therein lies Weiss’s greatest challenge, weighing up the short-term benefit of a massive financial injection at a time when all sports across the globe are feeling the effects of COVID-19 against the long-term impact of giving up a stake in the game

In an ideal world, the ARL Commission would cut costs, save $300 million over the next six or so years and begin investing in assets designed to generate revenue to guarantee a sustainable future for the code and their clubs.

The world as we know it right now is far from ideal, which helps explain why some clubs have pushed the NRL to take a closer look at the prospect of private equity investment.

Private equity has been on the rise in European sport as investors swoop on rugby union and soccer. CVC Capital Partners, one of the companies linked with the NRL, made a £200m investment in Premiership Rugby in late-2018.

They then targeted the Six Nations tournament, setting aside a £500 million bid to buy a 30 per cent stake the sport. Italian football — the Serie A — is currently considering as many as six parties interested in buying a 15 per cent share of their sport.

Rugby league is now on their radar. Nick Clarry, head of CVC’s sports, media & entertainment division, told the Private Equity News website in June that the firm believed sport would bounce back from the pandemic.

Source: The Australian

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