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Super League clubs reject private equity proposal


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23 minutes ago, Martyn Sadler said:

I've scheduled the original article to go out on our website at 6.00pm. You're right that the details in the article were about the monetary distribution. Sky were paying £200 million over five years, as as far as they were concerned no doubt they were buying the right to broadcast Super League, but the RFL, rather than Sky, decided how it would be distributed, which is why there is a significant sum of money for the Challenge Cup and internationals, even though Sky doesn't broadcast internationals.

Nigel Wood, as the then CEO of the RFL, clearly didn't think that Rugby League begins and ends with Super League.

I've also scheduled an article by Ian Lenagan responding to the deal that we published in the same issue.

It's quite interesting to see the points he made at the time.

Interesting I think also many (And some excellent people) just get trapped in a club bubble and see things differently.

Nigel Wood used to take a lot of stick from some, however there is no doubt that he was/is an expansionist as is Ralph.

 

Paul

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It was a bad deal that looked somewhat predatory by vultures. 750k fee for no deal though, ouch!  At the end of the story it says Sky is offering closer to £30m/yr not £20m for Super League TV ri

They're hoping the lower tier clubs won't notice 😉

Having seen this up close, it's often a load of ######. It would be even more ###### in Rugby League - the vast majority of so-called succesful businessmen who have come into the sport from outsi

37 minutes ago, Martyn Sadler said:

I've scheduled the original article to go out on our website at 6.00pm. You're right that the details in the article were about the monetary distribution. Sky were paying £200 million over five years, as as far as they were concerned no doubt they were buying the right to broadcast Super League, but the RFL, rather than Sky, decided how it would be distributed, which is why there is a significant sum of money for the Challenge Cup and internationals, even though Sky doesn't broadcast internationals.

Nigel Wood, as the then CEO of the RFL, clearly didn't think that Rugby League begins and ends with Super League.

I've also scheduled an article by Ian Lenagan responding to the deal that we published in the same issue.

It's quite interesting to see the points he made at the time.

But Sky are paying that money for Super League and for a competition worthy of that money. Yes Wood may have thought that Rugby League did not begin and end with Super League, that is before any debate on whether that was also to do with cementing his position, but I'm not sure if it should be his call to make. If what you are saying is correct then we could have had a 14 team Super League with bigger levels of funding and created something better to sell for the next TV deal. Instead we wasted money subsidising full time clubs in the lower leagues, had silly middle 8s competitions that had failed in other sports and did little to improve the competition. If SL team were only getting circa £22 million a year from this TV deal (£1.8 million v 12) then no wonder Sky said you don't need as much and can get by on far less this time.

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49 minutes ago, Martyn Sadler said:

I've scheduled the original article to go out on our website at 6.00pm. You're right that the details in the article were about the monetary distribution. Sky were paying £200 million over five years, as as far as they were concerned no doubt they were buying the right to broadcast Super League, but the RFL, rather than Sky, decided how it would be distributed, which is why there is a significant sum of money for the Challenge Cup and internationals, even though Sky doesn't broadcast internationals.

Nigel Wood, as the then CEO of the RFL, clearly didn't think that Rugby League begins and ends with Super League.

I've also scheduled an article by Ian Lenagan responding to the deal that we published in the same issue.

It's quite interesting to see the points he made at the time.

The problem is that it means the detail isn't really correct. How can the article state that money has been paid for internationals? 

It even states at the start that Sky will pay £182m for club and international RL. 

We know that Sky did own the rights for the Championship, but not L1, probably due to the structure of the S8's, so when I claim that the numbers are all over the place, that's what I refer to. 

The article just doesn't answer the question of how much the SL rights are worth. As in, what is the comparison for this time. 

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8 hours ago, Rupert Prince said:

Hopefully your business grows and so does your employment, so your employees earn a living too. According to how brilliant you and you staff work you can sell shares in your business to the public.

Private Equity companies invest in companies that are not publicly listed businesses.   When companies "go public", in order to receive investment, they are owned to a varying degree by their shareholders.  

The point is it is irrelevant whether the investment is public or private... the point is that the investors wish a return on their investment... and that investment then increases the value of the return to all its shareholders including the companies or entities that received investment.

Very often, whether private or public equity, the investors and beneficiaries are pension funds

As far as RL, or more specifically Superleague, then Private Equity, perhaps the Venture Capitalist end of the market, then their interest is in taking a 'more mature' product and growing it... using the skills and investment they have to grow the product.  This is to the benefit of the 'immature' product.  

The best mind seen to gravitate to PE companies... but of course no doubt some investors are better than others.

The issue is does RL want to stand still and in the process be bypassed by everyone else?

How many of our clubs are big enough to be floated ? , Is SL big enough to be floated ? , What exactly would this investment have been used for ? 

And again , have you ever started a business up from scratch ?

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21 minutes ago, Dave T said:

How can the article state that money has been paid for internationals?

As suggested above, a better wording would have been that that particular tranche of money would be applied in running the Challenge Cup and internationals. The £200 million was an overall figure agreed by Sky, but how it was applied was a matter for the RFL and Wood decided that some of it would be used for that purpose.

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28 minutes ago, Damien said:

But Sky are paying that money for Super League and for a competition worthy of that money. Yes Wood may have thought that Rugby League did not begin and end with Super League, that is before any debate on whether that was also to do with cementing his position, but I'm not sure if it should be his call to make. If what you are saying is correct then we could have had a 14 team Super League with bigger levels of funding and created something better to sell for the next TV deal. Instead we wasted money subsidising full time clubs in the lower leagues, had silly middle 8s competitions that had failed in other sports and did little to improve the competition. If SL team were only getting circa £22 million a year from this TV deal (£1.8 million v 12) then no wonder Sky said you don't need as much and can get by on far less this time.

It was Wood's call to make because at the time he was the CEO of both the RFL and Super League.

You are perfectly entitled to believe that all the money should have gone to the Super League clubs rather than the clubs outside Super League receiving anything, although I would disagree with you, but I certainly agree with your criticism of the Super 8s.

Wood's problem was that he never explained publicly why he devised his distribution model in the way he did.

It comes back to my earlier point about the RFL and Super League not being transparent.

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58 minutes ago, ATLANTISMAN said:

Interesting I think also many (And some excellent people) just get trapped in a club bubble and see things differently.

Nigel Wood used to take a lot of stick from some, however there is no doubt that he was/is an expansionist as is Ralph.

 

Paul

Nigel's problem was that he found it difficult to trust people, although in Rugby League there are quite a number of people who are untrustworthy.

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7 minutes ago, Martyn Sadler said:

It was Wood's call to make because at the time he was the CEO of both the RFL and Super League.

You are perfectly entitled to believe that all the money should have gone to the Super League clubs rather than the clubs outside Super League receiving anything, although I would disagree with you, but I certainly agree with your criticism of the Super 8s.

Wood's problem was that he never explained publicly why he devised his distribution model in the way he did.

It comes back to my earlier point about the RFL and Super League not being transparent.

I don't believe that and am happy for lower league clubs to get sustainable levels of funding. However too much money was wasted on propping up full time clubs in the lower leagues and giving paydays to players that were past it or were simply not good enough for Super League. This came with no return and no prospect of ever getting a return.

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41 minutes ago, Dave T said:

The problem is that it means the detail isn't really correct. How can the article state that money has been paid for internationals? 

It even states at the start that Sky will pay £182m for club and international RL. 

We know that Sky did own the rights for the Championship, but not L1, probably due to the structure of the S8's, so when I claim that the numbers are all over the place, that's what I refer to. 

The article just doesn't answer the question of how much the SL rights are worth. As in, what is the comparison for this time. 

Was told last season that they did as club I video were talking about broadcasting live on You Tube but apparently this would breach the SKY deal. Happy to be corrected if you can show me where SKY only have broadcast rights to only SL and Championship.

My wife complains I selfishly stop her fulfilling her true ambition -

she really wants to be a rich widow

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1 hour ago, Dave T said:

The problem is that it means the detail isn't really correct. How can the article state that money has been paid for internationals? 

It even states at the start that Sky will pay £182m for club and international RL. 

We know that Sky did own the rights for the Championship, but not L1, probably due to the structure of the S8's, so when I claim that the numbers are all over the place, that's what I refer to. 

The article just doesn't answer the question of how much the SL rights are worth. As in, what is the comparison for this time. 

The figures simply to not stack up and do not stand up to scrutiny. If the deal was genuinely £200 million over 5 years then RL clubs would have been swimming in money and SL clubs would be getting far more than £1.8 million a year. As it is they only share about £22 million a year and this deal only netted them an extra £500,000 each on what they were receiving from the previous TV deal. That deal was only £90 million over 5 years, not even half of what this one supposedly is. I have severe doubts about the headline figure and it being over 5 years.

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41 minutes ago, Martyn Sadler said:

As suggested above, a better wording would have been that that particular tranche of money would be applied in running the Challenge Cup and internationals. The £200 million was an overall figure agreed by Sky, but how it was applied was a matter for the RFL and Wood decided that some of it would be used for that purpose.

With respect, its an odd positioning of rights. What Sky are paying for and how the game spends the money are two quite different things. This article appears to be a bit of a hybrid. 

Its not a reflection of what Sky paid for, and it isn't a great reflection of how it is allocated as there is no indication of how much is going to the RFL and SLE. 

I have to assume out of the SL pot the RFL got a portion. Probably the same with each pot? 

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24 minutes ago, BJW said:

Was told last season that they did as club I video were talking about broadcasting live on You Tube but apparently this would breach the SKY deal. Happy to be corrected if you can show me where SKY only have broadcast rights to only SL and Championship.

There are quotes from the RFL about L1 rights being excluded from the deal. It was confirmed a couple of times. Its a fair while back and probably not easy to find the quite as it was just part of interviews iirc. 

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I was told by the admin at a L1 club but will get them to recheck as when it comes to RFL and clarity . . . . . . 

My wife complains I selfishly stop her fulfilling her true ambition -

she really wants to be a rich widow

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1 hour ago, Damien said:

The figures simply to not stack up and do not stand up to scrutiny. If the deal was genuinely £200 million over 5 years then RL clubs would have been swimming in money and SL clubs would be getting far more than £1.8 million a year. As it is they only share about £22 million a year and this deal only netted them an extra £500,000 each on what they were receiving from the previous TV deal. That deal was only £90 million over 5 years, not even half of what this one supposedly is. I have severe doubts about the headline figure and it being over 5 years.

Is it over 7 years? 2015 to 21?

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34 minutes ago, BJW said:

I was told by the admin at a L1 club but will get them to recheck as when it comes to RFL and clarity . . . . . . 

From memory it may have been in a Nigel Wood interview here and I think it was around tv rights and TWP. It then went into L1 being available and they were seeing if they could get anything, but Champ was a different ballgame. I believe TWP had to get permission from Sky for Championship. 

I wonder if the issue with YouTube was a conflict with Our League? 

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7 minutes ago, Dave T said:

From memory it may have been in a Nigel Wood interview here and I think it was around tv rights and TWP. It then went into L1 being available and they were seeing if they could get anything, but Champ was a different ballgame. I believe TWP had to get permission from Sky for Championship. 

I wonder if the issue with YouTube was a conflict with Our League? 

May have been but also remember at All Golds they were transmitting games live on You Tube and being told they knew they shouldn't but until somebody complained and told them to stop, they'd continue. That was in the days before Our League but IIRC under current TV deal.

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My wife complains I selfishly stop her fulfilling her true ambition -

she really wants to be a rich widow

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25 minutes ago, Tommygilf said:

Is it over 7 years? 2015 to 21?

In the interview with Lenegan there a few references to 8 years and the money that clubs received up front. He also talks about SL clubs only getting 30% more from this deal. Then of course there is the fact that a headline figure of £200 million over 5 years sounds is rather good PR for those running the game trying to justify their positions. The previous deal was £90 million over 5 years and if this one was genuinely £200 million over 5 years than something has gone disastrously wrong. I don't think it was and don't see how it could have been.

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The accounts show broadcast income of circa £10m to RFL 

Super league europe got £27.3m in 2019 

Now RFL get a £2m share so Super league gets very close to £30m.

Overall income is therefore just under £40m. 

I think Sky paid £200m over 5 years, but some of the money was paid early and distributed early. 

I also think Sky sub licensed challenge cup and internationals so BBC pay in low millions a year for these. 

Therefore it's easier to see it as £30m Sky for Super league (RFL get a small share) 

£10m Sky and BBC for RFL (What we dont know is how much BBC pay- which is what RFL are looking at from 2022) 

 

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19 hours ago, GUBRATS said:

How many of our clubs are big enough to be floated ? , Is SL big enough to be floated ? , What exactly would this investment have been used for ? 

And again , have you ever started a business up from scratch ?

I was not saying that RL clubs should be floated (although many years back some did incorporate and sold shares... I used to own shares in Wigan).  I was just pointing out, I thought clearly, that there is private equity and public equity.

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22 hours ago, Martyn Sadler said:

It was Wood's call to make because at the time he was the CEO of both the RFL and Super League.

You are perfectly entitled to believe that all the money should have gone to the Super League clubs rather than the clubs outside Super League receiving anything, although I would disagree with you, but I certainly agree with your criticism of the Super 8s.

Wood's problem was that he never explained publicly why he devised his distribution model in the way he did.

It comes back to my earlier point about the RFL and Super League not being transparent.

Are you suggesting that he made these decisions in isolation with no reference to any other authority?

Sport, amongst other things, is a dream-world offering escape from harsh reality and the disturbing prospect of change.

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39 minutes ago, Blind side johnny said:

Are you suggesting that he made these decisions in isolation with no reference to any other authority?

I would imagine he consulted a number of people, particularly his fellow RFL directors, but at the end of the day as the CEO the decision was his.

And there's just one other thing to note about the proposed new broadcast deal.

With £29 million per annum looking like the offer, it's worth bearing in mind that that figure has not been negotiated by Super League, but by consultants hired by Super League.

And in my experience consultants normally pocket between 10 and 15 per cent of the deal they negotiate.

I don't know whether that is true in this case, but it is highly likely.

So the net figure received by Super League will be about £3 million less than that per year.

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It's really difficult to quantify the value of a consultative fee in these cases.

Certainly you would rather have a £29 million deal and £3m in fees than a £25m deal without fees as you are still a million better off. .  but you don't know the size of the deal you could have struck without them. Catch 22.

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On 26/01/2021 at 15:57, M j M said:

Leeds and Yorkshire pay it. The reason for building these facilities was because Headingley, in normal times, throws off mountains of cash and this guaranteed more mountains of cash in the future by securing test cricket, making a major splash in the Leeds corporate market and expanding the capacity for the most regular single user (Leeds) who were often selling out the existing facilities. Paying back £40m over the period of the lease is, relatively, peanuts for the clubs - especially as they can make overpayments if they wish which makes the whole thing behave a lot more like a mortgage.

Leeds started out with something like £7m in the bank which they contributed before even turning to the financing side for the rest of it. The club have made a cash profit of between £1m and £2m every year but one over the past decade or more and the new facilities were starting to generate even more money.

I know you think you're making a point but, like with your comments on PE, you honestly don't seem to have the first clue.

Leeds own the ground from the centre of the North Stand concourse all the way to the southern boundary on St Michael's Lane. Leeds and Yorkshire keep all the income and pay off the financing arrangement used to redevelop the ground out of the regular cash surpluses the stadium generates. That's the business model, they have "given up" about as much as you do if you had a mortgage.

Part of the long running issues with Headingley was that, at one time, the ownership of the entire site was complex with at least 3 parties owning part of the site. This was one of the reasons the redevelopment of the cricket ground took so long etc.

L&G are basically the funders. The council have provided some form of guarantee on the basis that both clubs bring a lot into the city.

Did both clubs need the redevelopment. Undoubtedly. Can both afford it. The RL club a definite yes. The cricket club probably now that they have retained their guaranteed international status. Is the redevelopment first rate. Again yes

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1 hour ago, Martyn Sadler said:

I would imagine he consulted a number of people, particularly his fellow RFL directors, but at the end of the day as the CEO the decision was his.

And there's just one other thing to note about the proposed new broadcast deal.

With £29 million per annum looking like the offer, it's worth bearing in mind that that figure has not been negotiated by Super League, but by consultants hired by Super League.

And in my experience consultants normally pocket between 10 and 15 per cent of the deal they negotiate.

I don't know whether that is true in this case, but it is highly likely.

So the net figure received by Super League will be about £3 million less than that per year.

Which if true shows that management has a complete lack of faith in their own product.

It is a well known fact that SKY punish those that go down this route especially when they are the only likely players in town.

Vic Walking (Now retired) I know was not impressed when Richard Lewis used McCormack (IMG) who tried to play SKY off v ESPN who had come onto the scene it all ended in tears as did Setanda Sports.

SKY have done a brilliant job over the years for Rugby League lets hope it now gets back on track.

 

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