How much would Super League be valued at?

[Rupert Prince]

13 minutes ago, Damien said:

The same as any other league that PE has bought into. You can literally apply the exact same logic to the recent RU deals.

Using the last TV deal as a measure, if PE had bought into Super League prior to then and took 51% of income then they'd have had their money back within 3 years.

To be clear, the return that this RU investor would get or is getting is a %age over and above a certain level of income.    So it's not like taking say a third  or half if everything.  The benefit to all parties is to grow the business.

People really need to wake up and see that if we do nothing then what ever it is we might have is going to go down the drain.

My quick sums (based on news reports) say that Premiership Rugby is valued at £750 million.  PR may (?) have been good or bad at pushing that.  What size do we value Super League?  Two sevenths?  Say £200 million?

[Rupert Prince]

4 minutes ago, Dave T said:

I'm not sure this is the best example when Warrington, Wigan and Saints could all play at home on the same night as Sale and attract 35k versus 6k.

Regional sides may appear to be a good position to be in, but it hasn't really helped RU's top tier in the North.

RU Premiership Rugby is heavily weighted in the West.  Virtually nothing in London.

[Dave T]

37 minutes ago, Damien said:

The same as any other league that PE has bought into. You can literally apply the exact same logic to the recent RU deals.

Using the last TV deal as a measure, if PE had bought into Super League prior to then and took 51% of income then they'd have had their money back within 3 years.

I'm struggling to find any commercial details of the recent RU CVC deals - is that generally how these deals work?

[Dave T]

8 minutes ago, Rupert Prince said:

To be clear, the return that this RU investor would get or is getting is a %age over and above a certain level of income.    So it's not like taking say a third  or half if everything.  The benefit to all parties is to grow the business.

People really need to wake up and see that if we do nothing then what ever it is we might have is going to go down the drain.

My quick sums (based on news reports) say that Premiership Rugby is valued at £750 million.  PR may (?) have been good or bad at pushing that.  What size do we value Super League?  Two sevenths?  Say £200 million?

Thanks, that answers my question to Damien, as I think it is often simplified - i.e. they take a 51% share to get voting rights and 51% share of all income. 

[Damien]

10 minutes ago, Rupert Prince said:

To be clear, the return that this RU investor would get or is getting is a %age over and above a certain level of income.    So it's not like taking say a third  or half if everything.  The benefit to all parties is to grow the business.

People really need to wake up and see that if we do nothing then what ever it is we might have is going to go down the drain.

My quick sums (based on news reports) say that Premiership Rugby is valued at £750 million.  PR may (?) have been good or bad at pushing that.  What size do we value Super League?  Two sevenths?  Say £200 million?

What is the certain level of income? Have you a link to this information?

[Damien]

3 minutes ago, Dave T said:

I'm struggling to find any commercial details of the recent RU CVC deals - is that generally how these deals work?

I don't know how the RU deal works and never said I did. The deal will be whatever is agreed. Based on what has been leaked about this it seems Super League aren't exactly in a strong negotiating position and with 51% they can do as they please. Looking at F1 few have positive views on what PE did there.

[Dave T]

1 minute ago, Damien said:

I don't know how the RU deal works and never said I did. The deal will be whatever is agreed. Based on what has been leaked about this it seems Super League aren't exactly in a strong negotiating position and with 51% they can do as they please. Looking at F1 few have positive views on what PE did there.

I'm not sure why you are taking such a confrontational approach to a genuine question.

Rupert Prince appears to have addressed my question, so all good.

[Damien]

32 minutes ago, Dave T said:

I'm not sure why you are taking such a confrontational approach to a genuine question.

Rupert Prince appears to have addressed my question, so all good.

Sorry if you took it that way as I didn't think I was and didn't mean to be.

Anyhow found some information here which seems like CVC pretty much take in revenue their percentage share, 91% of 27% revenue for their 27% share. This is only 91% and not 100% because 10 clubs bought a stake back for over £2 million each, presumably money going back to CVC. This CVC share of revenue rises even more once it hits a certain threshold where it goes up to 45% of revenue. Not really too different than the scenario which I said:

The incentive obtained by CVC raises their share to 45 per cent of revenue earned above a ratchet figure, with expectation among the clubs that their new partner is going to deliver significantly enhanced broadcast deals.

The Premiership’s main broadcast contract is currently held by BT Sport to 2021, but the names on the lips of club owners now include Amazon, Apple, Netflix and DAZN.

The Premiership on Tuesday announced Darren Childs, currently at digital broadcaster UKTV, would become its new chief executive, with the incumbent Mark McCafferty moving into an advisory role with CVC.

All the clubs – the 12 currently in the Premiership plus Championship leaders London Irish – have now received their cash windfall from CVC of £13.5m each, with £25m retained to administer and promote the new set-up. i understands 10 of the 13 clubs have taken the extra step of investing just over £2m each for a collective stake of just under 10 per cent in a new company which will look after the Premiership’s commercial activity.

CVC will run this company, in which they have a 91 per cent cent share, and into which 27 per cent of the Premiership’s revenue – currently estimated at £60m a year – will flow up to a ratchet figure likely to be somewhere between £70m and £90m, at which point the share becomes 50 per cent.

It means that if, for example, commercial revenue hit £200m a year, CVC would take around £25m more from the clubs than if their share had stayed at 27 per cent.

https://inews.co.uk/sport/rugby-union/premiership-rugby-cvc-television-rights-amazon-dazn-netflix-281839

[Tommygilf]

1 hour ago, Rupert Prince said:

Wigan are 'Lancashire', not 'Manchester' or 'Greater Manchester'.

Greater Manchester has 2 RL areas.  Areas with history.  Salford and Swinton in the north west, and Rochdale and Oldham in the north east. These seem sensible areas for development.

Whatever they are, getting more support from Manchester would be beneficial.

[dhw]

5 hours ago, Pulga said:

And that will be the downfall of the game in England. I watch the game because of what it is. I don't particularly care for teams. I have ones I prefer above others but I'd watch my two most hated clubs play every day of the week.

The weird 1800's folk game attitude of England isn't relevant today. You need to adapt to a more global brand or die. 

 

Is that why SOO is popular, yet the same people will not want to watch the best players in the world in the most important competition to such a degree that they could not give tickets away for the final. It is incredibly paroquial much more so than it is in England and is based on dumb tribalism.

[Liverpool Rover]

4 hours ago, The Rocket said:

Dave I can only go off what I witnessed here, Balmain Tigers and Western Suburbs Magpies being the best example. Both proud old clubs who were both withering away and in very real danger of ending up like Newtown, Glebe, Annandale, or any other number of small clubs that had died .

When the clubs merged there were many who said they would never support them again, they had lost their identity, however a bit of success early and a premiership in 2005 brought a lot of the old fans back and new ones over. They are now one of the highest rating clubs in the premiership despite their lack of success recently. They have this ridiculous merged identity name `Wests Tigers` with the Tiger emblem over the heart and the Magpie on the sleeve. But the fans don`t seem to care anymore , maybe a few old diehards , but for the new generation that`s all they`ve known. And importantly this is about the next generation, so they can enjoy what we have. I`m a passionate St.George supporter, I know about mergers.

Maybe the strong leadership you refer to needs to present this to the fans, they need to say this is the reality, we merge or we die , we rally together or it`s oblivion. If we don`t maybe those other two teams will, so we better get in first, there `s a fair bit at stake here.

If it ever got to the point where both Hull clubs said “we have to merge or die” the vast majority of fans of both teams would genuinely say “die”. If they merged than so many fans would never, ever go to watch them and not even a Grand Final or Challenge Cup win would tempt them back. It would be the same for any other club I imagine. Club fans would honestly have no RL in their town at all than see their team merge.

Last year there was Swinton Lions, who I don’t think have been based in Swinton since I was at school over 20 years ago, who wanted to change the name to Manchester Lions as they felt that the name change would make the club more commercially appealing and could save the clubs long term future. The fans response was to hound the board out of the club and most fans said that they would stop going.

Mergers and name changes may work in Australia but they never will over here. English sports fans love their tradition too much and are so resistant to change.

[JonM]

1 hour ago, Dave T said:

I'm not sure this is the best example when Warrington, Wigan and Saints could all play at home on the same night as Sale and attract 35k versus 6k.

Regional sides may appear to be a good position to be in, but it hasn't really helped RU's top tier in the North.

I wouldn't necessarily hold Sale up as an example though. If Warrington want to get bigger than they are in terms of paying spectators, they pretty much have to start pulling in support from a wider area - and I think Warrington have done a pretty decent job of trying to do that. I see plenty of evidence of them having done marketing things in Runcorn schools, for example. Some people on here say that teams need to merge or change names to do that, but I don't think it's at all the case. Sale attract fans from across the NW without changing their name to Manchester or Lancashire or NorthWest England - the fact that they're named after a small suburb doesn't stop people supporting them.

The comparison with Cambridge United is a fair one though. By any estimation, they are a smaller club than Warrington, or Wigan, or Saints. Mostly that's because most people who live in the Cambridge travel to work area came here from somewhere else and if they follow sport, follow a different team. But they have enough fans in places like Ely, Huntingdon, St. Neots or out in the fens which are 15-20 miles away that there are supporters coaches to away games departing from those places. We are nowhere near the situation where say Ellesmere Port, Knutsford, Macclesfield, Northwich, Irlam or Altrincham have more than a carful or two of people supporting Warrington. I understand why that is, and how massively hard it is to change, but that is the reality of what growing the attendances for some of the biggest SL clubs means.  Growing sponsorship, corporate hospitality, tv revenues may be a different story of course.

[Rupert Prince]

1 hour ago, Damien said:

What is the certain level of income? Have you a link to this information?

No, but thete are lots of articles and reports about this issue.  I'm not spending time looking it up in so far that these things are in public domain.

[Damien]

12 minutes ago, Rupert Prince said:

No, but thete are lots of articles and reports about this issue.  I'm not spending time looking it up in so far that these things are in public domain.

It's okay. I've found one and it's quite different than you made out.

[Rupert Prince]

2 minutes ago, Damien said:

It's okay. I've found one and it's quite different than you made out.

So yours is wrong?

[Dave T]

1 hour ago, Damien said:

CVC will run this company, in which they have a 91 per cent cent share, and into which 27 per cent of the Premiership’s revenue – currently estimated at £60m a year – will flow up to a ratchet figure likely to be somewhere between £70m and £90m, at which point the share becomes 50 per cent.

It means that if, for example, commercial revenue hit £200m a year, CVC would take around £25m more from the clubs than if their share had stayed at 27 per cent.

https://inews.co.uk/sport/rugby-union/premiership-rugby-cvc-television-rights-amazon-dazn-netflix-281839

Am I following this correctly? 

27% of the commercial income (£60m) goes to the CVC owned company - £16.2m and they get 91% of it? So as things stand, a payment of c£15m per year. 

A similar arrangement in SL would probably see a payment of c£8m per year under current arrangements? 

[Gray1967]

Two Eccles cakes, Pie and peas and a pint of Thwaites should do it

[Damien]

1 hour ago, Dave T said:

Am I following this correctly? 

27% of the commercial income (£60m) goes to the CVC owned company - £16.2m and they get 91% of it? So as things stand, a payment of c£15m per year. 

A similar arrangement in SL would probably see a payment of c£8m per year under current arrangements? 

CVC only bought a 27% stake so are effectively getting 27%. The Super League PE rumours are 51%.

Let me use some simple Maths that you loathe . The last TV deal saw £182,200,000 split between the Super League, Championship and League 1 clubs over 5 years. Make no mistake this is all Super League money and any PE company would see it as such. This works out at £32,631,000 a year. On top you've then got Betfred and other sponsorships so for handiness lets call it £35 million a year in income. If a PE firm is buying a 51% stake and taking a 51% share of revenue they could feasibly pocket  £17,850,000 a year. If clubs bought stakes back so they only owned 91% of that 51%, as in RU, this would drop to £15,925,000 a year.

Either way for me it is huge money that cripples clubs going forward for little gain.

[Dave T]

29 minutes ago, Damien said:

CVC only bought a 27% stake so are effectively getting 27%. The Super League PE rumours are 51%.

Let me use some simple Maths that you loathe . The last TV deal saw £182,200,000 split between the Super League, Championship and League 1 clubs over 5 years. Make no mistake this is all Super League money and any PE company would see it as such. This works out at £32,631,000 a year. On top you've then got Betfred and other sponsorships so for handiness lets call it £35 million a year in income. If a PE firm is buying a 51% stake and taking a 51% share of revenue they could feasibly pocket  £17,850,000 a year. If clubs bought stakes back so they only owned 91% of that 51%, as in RU, this would drop to £15,925,000 a year.

Either way for me it is huge money that cripples clubs going forward for little gain.

Yes, of course, makes sense over the 27-51%. 

And I see no reason why CVC would get their full investment back from SL in 3 years versus 14 years in RU (assuming static deals for ease of comparison). 

Interestingly the RU deal did start at a 51% offer. 

[Damien]

Just now, Dave T said:

Yes, of course, makes sense over the 27-51%. 

And I see no reason why CVC would get their full investment back from SL in 3 years versus 14 years in RU (assuming static deals for ease of comparison). 

Interestingly the RU deal did start at a 51% offer. 

Yes they did, for that alone SL would be crazy not fighting for a much better deal. I think the point you make about rate of return shows what a bad deal this is compared to what RU accepted. It is still worse than the one originally turned down by RU which is basically twice as bad as the deal RU accepted. Even that original deal would have seen CVC get their money back after about 7 years.

Any deal is a bad deal for me though and there are articles of RU clubs struggling because they have just under a third less income from the league. I can only imagine what SL clubs would be like with half, and they are much more dependent on TV income than RU clubs too who generally have more diverse and more rewarding sponsorship portfolios:

It leaves the clubs, 11 of which recorded losses in the last financial year with Exeter again the exception, needing to take immediate and drastic action with sport, because of the government’s social gathering policy, not likely to resume before a paying crowd until the middle of June at the earliest. They, and the Championship leaders Newcastle, each enjoyed a windfall of £12.5m last year when the private equity firm CVC took a 27% stake in the Premiership, but most used the money to pay off overdrafts, reimburse benefactors and for ground improvements.

There is not much left and with CVC now taking 27% of the league’s profits, Premiership Rugby is stopping central funding, which makes up between 25-33% of a club’s turnover, more for those who do not own their grounds.

https://www.theguardian.com/sport/2020/mar/20/premiership-rugby-clubs-players-pay-cut-coronavirus

[Pulga]

8 hours ago, Dave T said:

It's not true though. We are not massively different from others. Those Toronto fans are not now RL fans in huge numbers, they fell in love with their team. 

I suspect it will be a very small percentage who carry on with RL despite all the claims that they are all about the love of the game. They are no different and loved their club, and are peed off with how their club was treated. No different to Fev fans and their grievances. 

I'm not sure if you're in any of the TWP Facebook groups but the majority of posts are saying they will be watching the NRL from now on.

[Pulga]

3 hours ago, dhw said:

Is that why SOO is popular, yet the same people will not want to watch the best players in the world in the most important competition to such a degree that they could not give tickets away for the final. It is incredibly paroquial much more so than it is in England and is based on dumb tribalism.

No. SOO is still seen as the very top of the sport to most Australians. 

[The Rocket]

7 hours ago, JonM said:

Generally it doesn't help. Merging say Wigan and Leigh would not bring in a penny of extra revenue, it would be income lost to the game.

You say it doesn`t bring a cent of extra revenue to the game, but if the combined entity can persuade sponsors to stay on board that will increase revenue to the new entity  and they won`t be competing for sponsors and may even attract new sponsors because of greater reach. And this is the point you need to get to, stronger clubs with more financial clout who can be more successful and have money to market that success.

[Dave T]

16 minutes ago, Pulga said:

I'm not sure if you're in any of the TWP Facebook groups but the majority of posts are saying they will be watching the NRL from now on.

There were loads of complaints when TWP games were on pay TV over in Canada, my hunch is not many will pay for NRL (I assume it ain't free to air over there?). 

The NRL games on Sky here get a fraction of what SL games get. 

[Pulga]

3 minutes ago, Dave T said:

There were loads of complaints when TWP games were on pay TV over in Canada, my hunch is not many will pay for NRL (I assume it ain't free to air over there?). 

The NRL games on Sky here get a fraction of what SL games get. 

I've seen quite a few saying they've already cancelled whatever subscription they've had and have subscribed to watchnrl.

It's likely a vocal minority but still by far the most commented of all the options.