Rugby, (new) favorite discipline for mutual funds?
In recent years, several well-known investment funds have taken stakes in commercial companies backed by professional or rugby leagues. A move that could quickly win over professional clubs to the oval. light.
Such a transaction would allow us to attract capital and put SARU in a more comfortable financial position in the medium and long term. It is on these terms that South African Rugby Union Chairman Mark Alexander has defended his desire to attract an investment fund to the capital of an IRU-backed commercial company, just a few days after his re-election in April 2022.
A year later, the deal has yet to be formalized, but discussions have progressed well. According to the South African media, CVC will be well positioned to acquire between 15 and 20% of the trading company owned by SARU. Provided all stakeholders are persuaded to accept such a plan.
The direction taken by the South African Football Federation is not unprecedented in the world of rugby. Saroo is following in the footsteps of … the New Zealand Rugby Union, which already last summer sold just over 5% of the share capital of its trading company NZR CommercialCo to the Silver Lake investment fund for NZ$200m (€115m). New Zealand Rugby, however, needed to distribute a portion of the envelope to various members of the New Zealand rugby ecosystem and welcome all families – including the NZRPA Players Association who initially opposed this deal – to the board of directors of the new structure to facilitate the process. A deal that seems to be working since… New Zealand Rugby is currently working on a new sale of part of the NZR CommercialCo capital.
When a fund invests in a sports structure, it comes for two things: to obtain added value on its investment, but also to develop its media exposure. This is the great advantage of sports over other less attractive sectors of activity. Moreover, these rugby investments don’t mean much for funds like Silver Lake or CVC that are accustomed to managing assets worth tens of billions of euros. The potential for rugby to develop internationally is great Antoine DuvallCEO of Six Sports Management, a consulting firm.
A scheme more suitable for federations in the southern hemisphere?
This interest in investment funds for major rugby players is not new.
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