Private Equity

[Gooleboy]

3 hours ago, Liverpool Rover said:

At the moment the Super League clubs have a lot of influence over what decisions are made and if it came down to it I don’t think any amount of money would get them to give that up.

They run the show.

[Copa]

I could imagine V’landys coming out of a meeting with SL club bosses thinking “wtf?”.

[Copa]

3 hours ago, Liverpool Rover said:

At the moment the Super League clubs have a lot of influence over what decisions are made and if it came down to it I don’t think any amount of money would get them to give that up.

They want things to grow without changing anything.

[Lowdesert]

4 hours ago, Liverpool Rover said:

At the moment the Super League clubs have a lot of influence over what decisions are made and if it came down to it I don’t think any amount of money would get them to give that up.

I think the opposite.  Every business has its price and only a few of SL clubs have any assets worth having.

I could see only 2 or 3 voting against it.

[Man of Kent]

3 hours ago, The Rocket said:

Roy Masters wrote an interesting article the other day about the Brisbane Broncos Boardroom. He said having spoken to insiders and ex-boardmembers that the Broncos board meetings had become a farce where for the first time in living memory the members actually just sat around talking football. Previously that was left to the football club side of things, the boardroom was for the business side of things . However the appointment of Darren Lockyer and an ex-netballer, neither who bring any business expertise to the meetings had coincided with the shambles the Broncos now find themselves in.

And now they are talking about appointing Ben Ikin to CEO. They sacked that bloke from the footy show because he was such a drip, even Andrew Johns found him a drip and that is saying something.

I wouldn`t take anything Ben Ikin says seriously, what the blazes would he know about asset stripping or private equity. He is just being lead around by the nose of whoever is in his ear. Heaven help the Broncos.

Fascinating but completely irrelevant to the thread!

[Yakstorm]

The NRL has looked into purchasing a stake in the Super League competition previously, so it wouldn't surprise me if the idea is being floated around again.  

From the NRL perspective, there are a number of reasons why having control / interest in Super League has an appeal.  Firstly there is of course broadcasts.  I'm not sure if the view is still there, but there was definitely a view 5 or so years ago that Super League is undervalued and that the NRL could help extract more money for the Super League assets both in Europe, but as well in Australia and New Zealand, especially if some game kick off times were aligned to be slightly more favourable to southern broadcasters.

There is then content, the NRL realises that content is highly valuable in this day and age, and that there is opportunity to both leveraging existing Super League content, but also create content from the games and players and teams which is currently not being used.

You then have sponsorship.  The NRL realises that the Australian and New Zealand market is only so big to sponsors, and really capturing the attention of major multinationals is difficult.   If suddenly you can then bring UK and French markets into the mix, then suddenly it opens up big opportunities.  I remember being involved in modelling just around Diageo, and it was estimated we could increase their investment in the game by 300% by such a proposal.  

You also have the opportunity to leverage virtual signage to 'double sell' into different markets.  For example, in Australia the field might say 'Telstra 5G', but there is no reason that it wouldn't be technically possible to have Betfred in those same positions when shown in the UK. 

There are plenty more as well, including new competition options using the big names from both leagues, opportunities to play matches on the other side of the globe, introduction of a truer World Club Championship, better player sharing, etc.

In my opinion, the fears that if the NRL was to go ahead with this, that they'd make SL a 'second tier' competition are unfounded.  I will say though, and this will happen if PE invests directly in Super League anyway, there would be some shake up in the competitions.  I can't see any external investor not wanting a proper presence in London, I also can't see them being pro P&R unless they also have a say of what teams are below the top grade.

Anyway, will be interesting to see if this happens.  

[gingerjon]

2 minutes ago, Yakstorm said:

The NRL has looked into purchasing a stake in the Super League competition previously, so it wouldn't surprise me if the idea is being floated around again.  

From the NRL perspective, there are a number of reasons why having control / interest in Super League has an appeal.  Firstly there is of course broadcasts.  I'm not sure if the view is still there, but there was definitely a view 5 or so years ago that Super League is undervalued and that the NRL could help extract more money for the Super League assets both in Europe, but as well in Australia and New Zealand, especially if some game kick off times were aligned to be slightly more favourable to southern broadcasters.

There is then content, the NRL realises that content is highly valuable in this day and age, and that there is opportunity to both leveraging existing Super League content, but also create content from the games and players and teams which is currently not being used.

You then have sponsorship.  The NRL realises that the Australian and New Zealand market is only so big to sponsors, and really capturing the attention of major multinationals is difficult.   If suddenly you can then bring UK and French markets into the mix, then suddenly it opens up big opportunities.  I remember being involved in modelling just around Diageo, and it was estimated we could increase their investment in the game by 300% by such a proposal.  

You also have the opportunity to leverage virtual signage to 'double sell' into different markets.  For example, in Australia the field might say 'Telstra 5G', but there is no reason that it wouldn't be technically possible to have Betfred in those same positions when shown in the UK. 

There are plenty more as well, including new competition options using the big names from both leagues, opportunities to play matches on the other side of the globe, introduction of a truer World Club Championship, better player sharing, etc.

In my opinion, the fears that if the NRL was to go ahead with this, that they'd make SL a 'second tier' competition are unfounded.  I will say though, and this will happen if PE invests directly in Super League anyway, there would be some shake up in the competitions.  I can't see any external investor not wanting a proper presence in London, I also can't see them being pro P&R unless they also have a say of what teams are below the top grade.

Anyway, will be interesting to see if this happens.  

Thanks for this. Lots to chew on.

[The Rocket]

1 hour ago, Man of Kent said:

Fascinating but completely irrelevant to the thread!

Think Yakstorm says everything that I would like to have thought of. Seriously though, the synergies with competitions ,WCC, Internationals and Broadcast deals were mentioned in the 'V`landy`s " thread previously, the marketing angle though seems to show a lot of potential.

It does highlight though the importance of having the right people running things.

[The Rocket]

1 hour ago, Yakstorm said:

the fears that if the NRL was to go ahead with this, that they'd make SL a 'second tier' competition are unfounded. 

In the interview between Gould and V`landy`s on tv recently both agreed that something had to be done about the Super League and New Zealand.  V`landy`s had Gould as a guest to the races last Sunday. I definitely do not think there are any sinister motives both want Rugby League to reach the potential they both obviously believe it has.

[Adelaide Tiger]

2 hours ago, Copa said:

I could imagine V’landys coming out of a meeting with SL club bosses thinking “wtf?”.

I can imagine V’Landys coming out of a meeting with SL club bosses after being handed a list of local Butchers and Fruit and Vegetable stall owners that they insist V’Landys should ring to solve the financial crisis in the game.

[The Rocket]

On 04/08/2020 at 16:26, Yakstorm said:

The NRL has looked into purchasing a stake in the Super League competition previously, so it wouldn't surprise me if the idea is being floated around again.  

From the NRL perspective, there are a number of reasons why having control / interest in Super League has an appeal.  Firstly there is of course broadcasts.  I'm not sure if the view is still there, but there was definitely a view 5 or so years ago that Super League is undervalued and that the NRL could help extract more money for the Super League assets both in Europe, but as well in Australia and New Zealand, especially if some game kick off times were aligned to be slightly more favourable to southern broadcasters.

There is then content, the NRL realises that content is highly valuable in this day and age, and that there is opportunity to both leveraging existing Super League content, but also create content from the games and players and teams which is currently not being used.

You then have sponsorship.  The NRL realises that the Australian and New Zealand market is only so big to sponsors, and really capturing the attention of major multinationals is difficult.   If suddenly you can then bring UK and French markets into the mix, then suddenly it opens up big opportunities.  I remember being involved in modelling just around Diageo, and it was estimated we could increase their investment in the game by 300% by such a proposal.  

You also have the opportunity to leverage virtual signage to 'double sell' into different markets.  For example, in Australia the field might say 'Telstra 5G', but there is no reason that it wouldn't be technically possible to have Betfred in those same positions when shown in the UK. 

There are plenty more as well, including new competition options using the big names from both leagues, opportunities to play matches on the other side of the globe, introduction of a truer World Club Championship, better player sharing, etc.

In my opinion, the fears that if the NRL was to go ahead with this, that they'd make SL a 'second tier' competition are unfounded.  I will say though, and this will happen if PE invests directly in Super League anyway, there would be some shake up in the competitions.  I can't see any external investor not wanting a proper presence in London, I also can't see them being pro P&R unless they also have a say of what teams are below the top grade.

Anyway, will be interesting to see if this happens.  

Private Equity is portrayed as the unequivocal bogey man with the detractors always citing ` asset stripping ` and ` mass redundancies ` but surely  this isn`t always the case. There must be plenty of examples where the extra investment and management expertise can work to both parties benefit. 

I think it is salient that the two clubs that have come and said ` not over their dead bodies ` are probably the two richest. Roosters and Broncos.

One character said that with only 20% of Board Members being P.E. appointees that they will control the board through their machinations.

Surely all this and the relationship with P.E. entity would largely be determined before any partnership was undertaken. Am I being naive?

I gather you are an employee of Diageo, a multinational firm with revenues of ~$30b(AUS) .Two points:

1. what is your relationship with Pacifique Treize,

2. What is your firms relationship/attitude towards Rugby League in general?

3. You are multinational company based in London, any chance of you slinging a few mill. to London Broncos for a few years to get them established!

 

 

[M j M]

13 minutes ago, The Rocket said:

Private Equity is portrayed as the unequivocal bogey man with the detractors always citing ` asset stripping ` and ` mass redundancies ` but surely  this isn`t always the case. There must be plenty of examples where the extra investment and management expertise can work to both parties benefit. 

 

Having worked for two businesses which were acquired by PE houses it very  much is true in my experience; there are some who buy long-term profitable businesses which they will deem low risk where they may seek to just increase and extract profits over a prolonged period.

In many scenarios though they are investing with the short or medium term aim of increasing the value of the business so they can sell up for a significant profit. They aren't interested in how they get there and the "management expertise" is often been laughable, and monstrously expensive. Rugby League isn't like any regular business, as we've seen from the repeated failure of so-called businessmen who have lost many millions over the years in the sport. Taking a typical PE approach of "we know best how to run a business" could be ruinous.

[Yakstorm]

17 hours ago, The Rocket said:

Private Equity is portrayed as the unequivocal bogey man with the detractors always citing ` asset stripping ` and ` mass redundancies ` but surely  this isn`t always the case. There must be plenty of examples where the extra investment and management expertise can work to both parties benefit. 

I think it is salient that the two clubs that have come and said ` not over their dead bodies ` are probably the two richest. Roosters and Broncos.

One character said that with only 20% of Board Members being P.E. appointees that they will control the board through their machinations.

Surely all this and the relationship with P.E. entity would largely be determined before any partnership was undertaken. Am I being naive?

I gather you are an employee of Diageo, a multinational firm with revenues of ~$30b(AUS) .Two points:

The devil is definitely in the detail when it comes to any form of PE or VC injection, and you are definitely right in that there re plenty of scenarios where type of investment results in a positive income for all involved.

The difficulty when it comes to sport and especially for an established league is not only what assets / rights are you selling to get the injection, but is there a market out there to buy those assets if/when the PE firm wants out.

If arguably the NRL used any PE to buy say Super League or venues, this could be what is used to define the asset relationship and make any separation nice and clean, but I doubt it will even get to that stage based upon comments from the QRL and NSWRL.

As for your assumption that I work/ed for Diageo, I have never been employed by that organisation. 

[Pulga]

On 04/08/2020 at 04:04, GUBRATS said:

In Australia 

This is the worrying part that I hope the NRL aren't naïve to. 

Australia has some pretty vicious media but it's spread amongst all sport. England as a whole seems actively prejudiced against rugby league. The prevalent caste system in England puts rugby league at a disadvantage very unlike it does in Australia. They will be sowing on hostile soil.

[Man of Kent]

40 minutes ago, Pulga said:

This is the worrying part that I hope the NRL aren't naïve to. 

Australia has some pretty vicious media but it's spread amongst all sport. England as a whole seems actively prejudiced against rugby league. The prevalent caste system in England puts rugby league at a disadvantage very unlike it does in Australia. They will be sowing on hostile soil.

Errrr. No caste system here, dude.

Rugby league is seen as a Northern game for Northern people. And, to be fair, it mostly is. That’s why it’s at a disadvantage, particularly when England is so London-centric.

There is a lot of ignorance and I daresay preconceptions about rugby league in this country but ‘actively prejudiced’ is not really accurate.

[DlEHARD]

I'd love the NRL and Super League to work much closer together. And I'd prefer the NRL to buy SL if it's just gonna wither on the vine. I agree that it'd give us a global product.

And I am dead against private equity buying into the NRL, god it took so long to get rid of News Ltd.

[Pulga]

20 minutes ago, Man of Kent said:

Errrr. No caste system here, dude.

Rugby league is seen as a Northern game for Northern people. And, to be fair, it mostly is. That’s why it’s at a disadvantage, particularly when England is so London-centric.

There is a lot of ignorance and I daresay preconceptions about rugby league in this country but ‘actively prejudiced’ is not really accurate.

So there's no class system in England?

No notions of people being a certain way for playing certain sports or being from certain areas?

No bias on reporting certain sports while not reporting others on TV and newspapers?

[DlEHARD]

.

QRL boss Bruce Hatcher slams proposals for private equity firm to buy stake in NRL

https://www.theaustralian.com.au/

Queensland Rugby League chairman Bruce Hatcher has slammed the concept of private equity in the NRL, making it clear his organisation will torpedo any attempt to sell off a stake in the code to cashed-up investors.

The rebirth of the Rabbitohs under Russell Crowe is evidence privatisation can work in rugby league but Hatcher says talk of the NRL sourcing a rumoured $600 million from a 20 per cent sell-off is “ridiculous”.

ARL Commissioner Gary Weiss is mulling over several private-investment proposals submitted to ARLC boss Peter V’landys.

The sharp-minded Weiss is nobody’s fool, having completed extensive work during his business career in mergers and acquisitions.

But here’s the reality for the cash-strapped NRL: the private equity push is effectively dead before it reaches first base.

Under the terms of the ARL Commission constitution, the NRL would need the support of the Queensland and NSW Rugby Leagues in a voting process for any purported sale of rugby league to take place.

And judging by the words of Hatcher, who has more than 50 years’ experience in accounting, private ownership of the NRL is off-limits.

“I have spoken to Peter V’landys and made it very clear the investors can get stuffed,” Hatcher said. “That’s as blunt as I can get.

“I have never seen any proposal or idea more ridiculous (than a private equity stake in the NRL). If there is any breath left within me before my 100th birthday, I won‘t be supporting private equity and nor will the Queensland Rugby League.

“We have the power of veto. If either the NSW or Queensland Rugby League say no to this, they can‘t get the sale up and the NRL will find on this occasion we won’t support it.

“I want it knocked stone dead. This will not go ahead. I am absolutely filthy.”

Two months ago, this columnist called V’landys to discuss rumours of a European private equity firm, CVC Capital Partners, buying a stake in the NRL.

CVC has an estimated $111 billion in secured commitments. Spending $600 million to own one-fifth of the NRL would be a financial drop in the ocean for the Luxembourg-based giant.

At the time, V’landys insisted the idea was fanciful. Now, the ARLC is suddenly performing due diligence on CVC’s proposal, among others.

There is a school of thought private ownership can be helpful for the NRL, which has no assets and could leverage a $600 million investment as a building block to turn the sport into a fiscal powerhouse.

But Hatcher questioned the motives of any private investor.

“Think about this,” says Hatcher, a long-serving chartered accountant.

“If we sell a stake in the NRL to private equity, and they are ready to exit in three to five years’ time, who is going to buy that stake in the game?

“The NRL will have to buy back a stake in the game it owns.

“It‘s a deadset joke.

“Most private equity firms operate over three-to-five-year terms. They will rip the guts out of rugby league to suit themselves for an eventual sale.

“They are only in this to make money. The only people who could buy a 20 per cent stake back is the game is the NRL itself.

“There has been all this discussion going on between the NRL clubs and no one has bothered consulting the Queensland Rugby League. I am furious about this. It should be killed off immediately, buried, and let’s get on with running our game.”

V‘landys says the ARLC is proceeding cautiously, agreeing the devil is in the detail.

“We have a responsibility to look at private equity. Even if you don‘t proceed with it, you have to make sure you aren’t letting go of an opportunity,” he said.

Asked if he is reluctant to sell a stake in the code, he said: “There is no reason to at the moment and you have to look at the consequences that go with it if you do (give up a stake).

“There is a long way to go before those sort of numbers (a $600m sell-off) can be substantiated or generated.

“It‘s all headline stuff without any due diligence.

“All you are seeing at the moment are numbers that it make (private equity) look appealing, but once you drill into it, naturally you will find pimples.

“People can see we have got future revenues and they want to be a part of it. The game is being set-up cost efficiently ... if you‘re an investor, why wouldn’t you look at us?”

If Hatcher gets his way, the likes of CVC won’t get through the front door.

[Man of Kent]

5 minutes ago, Pulga said:

So there's no class system in England?

No notions of people being a certain way for playing certain sports or being from certain areas?

No bias on reporting certain sports while not reporting others on TV and newspapers?

Caste and class are very different. 

[Sir Kevin Sinfield]

Selling the game to a private equity firm is about as good an idea as getting a pay day loan. It’ll get you a lump of cash now and take forever to pay for it. Terrible idea.

Private equity are only going to get involved if they can get more money out than they put in, why would we want that?

[Pulga]

12 minutes ago, Man of Kent said:

Caste and class are very different. 

"Caste is a form of social stratification characterized by endogamy, hereditary transmission of a style of life which often includes an occupation, ritual status in a hierarchy, and customary social interaction and exclusion based on cultural notions of purity and pollution".

 

If that isn't a summary of the history of rugby union and rugby league in England I don't know what is.

[EastLondonMike]

I don't have a problem with this kind of investment in theory, though am a bit naturally weary of such things, especially where RL is concearned, who have never shown any previous experience of handling such things well. Like V'landys says in that article, the devil is in the detail.

but it would be foolish to dismiss any proposals out of hand without properly consulting. 

The response of the QLD RL seems to be the classic RL response of forming a passionate opinion of something without fully understanding what's on offer. And going to the press..

[ATLANTISMAN]

This will end up like the last take it or leave it SKY TV deal clubs desperate for cash will sign away anything to get hold of a few hundred grand.

P 

[Man of Kent]

51 minutes ago, Pulga said:

"Caste is a form of social stratification characterized by endogamy, hereditary transmission of a style of life which often includes an occupation, ritual status in a hierarchy, and customary social interaction and exclusion based on cultural notions of purity and pollution".

 

If that isn't a summary of the history of rugby union and rugby league in England I don't know what is.

Sorry but we don’t have a caste system in England and, if I may say so, it’s rather arrogant of you to claim to know my country better than I do.

[George Watt]

1 hour ago, DlEHARD said:

I'd love the NRL and Super League to work much closer together. And I'd prefer the NRL to buy SL if it's just gonna wither on the vine. I agree that it'd give us a global product.

And I am dead against private equity buying into the NRL, god it took so long to get rid of News Ltd.

There is more chance of me being on the next Space X flight than this PE deal ever happening. Any deal the NRL puts forward can be vetoed by either the QRL or NSWRL and for sure the QRL will never come aboard.