‘A £100m offer could be made next month’

[Man of Kent]

The new Forty-20 magazine reports a £100m offer by a strategic investor could be made as soon as next month. This would be for the British game as a whole. 

This ties into what Gary Hetherington has been telling the media recently, such as here and here. 

“We need to create a commercial entity which can really maximise the game’s worth.

“It will sit underneath the RFL and will be led by industry specialists to maximise the commercial value of the game.

“All the game’s commercial properties and key events will sit in this company, so that creates the perfect structure.

“You then need the right senior management and executive management to run it effectively.

“The governing body, ultimately, can only do so much. Most clubs aren’t maximising their potential. One of the objectives is to bring in a strategic investor – a major partner not just for Super League but for the whole game.”

“Part of this major piece of work being done will be to increase participation of the women’s game and sell it as a separate entity.”

“Constitutionally, all the Super League clubs voted to create this change and whole series of recommendations to move the game forward.

“All aspects of the game will be looked at; we don’t want to be coming back with anything in isolation. It’s a big piece of work which is going ahead now; I am confident things will change.”

“There is a common purpose now to do something collectively because our sport could be in jeopardy if we don’t do something about it.”

 

[The Daddy]

I'm not convinced that throwing in 100m is solely the answer to the sport's problems. 

However I'll be open minded, the devil is in the detail. 

[Whippet13]

£100M is a big increase on the last offer, which was an (expensive) joke. A professional commercial arm makes absolute sense and would pay for itself with the right people but what about the other strategic decisions the game needs to take and what do they want for their £100m? Hetherington certainly knows his stuff though and seems to be taking a leading role after the gang of three took SL down a dead end last time. As TD says, devil in the detail but I'm open minded, we are pretty much in the last chance saloon now as a main stream sport so need to get this right.

[RayCee]

So if the deal goes through, is the 100m paid to a new leadership group who use the money at their discretion to improve the game in the UK? 

[Henson Park Old Firm]

can't wait

[Man of Kent]

Sounds like an investor would have a direct stake in this new commercial arm and therefore be driven by the profit motive.

There’s risks with that but in theory individual club self-interest would be replaced by collective self-interest. It’s a lack of enlightened self-interest that has held the game back, in my view.

[Whippet13]

As was mentioned on an earlier thread, Fred Done is the joint owner of a Private Equity firm, so they could be the potential investor.

[Lowdesert]

9 minutes ago, RayCee said:

So if the deal goes through, is the 100m paid to a new leadership group who use the money at their discretion to improve the game in the UK? 

It would be good to see detail in how, exactly, the money is to be split.  

 

 

[The storm]

2 hours ago, Man of Kent said:

The new Forty-20 magazine reports a £100m offer by a strategic investor could be made as soon as next month. This would be for the British game as a whole. 

This ties into what Gary Hetherington has been telling the media recently, such as here and here. 

“We need to create a commercial entity which can really maximise the game’s worth.

“It will sit underneath the RFL and will be led by industry specialists to maximise the commercial value of the game.

“All the game’s commercial properties and key events will sit in this company, so that creates the perfect structure.

“You then need the right senior management and executive management to run it effectively.

“The governing body, ultimately, can only do so much. Most clubs aren’t maximising their potential. One of the objectives is to bring in a strategic investor – a major partner not just for Super League but for the whole game.”

“Part of this major piece of work being done will be to increase participation of the women’s game and sell it as a separate entity.”

“Constitutionally, all the Super League clubs voted to create this change and whole series of recommendations to move the game forward.

“All aspects of the game will be looked at; we don’t want to be coming back with anything in isolation. It’s a big piece of work which is going ahead now; I am confident things will change.”

“There is a common purpose now to do something collectively because our sport could be in jeopardy if we don’t do something about it.”

 

We are selling our soul to venture capitslists

Edited November 13, 2021 by The storm

[Man of Kent]

3 minutes ago, The storm said:

We are selling our sole to venture capitslists

Does it smell fishy to you?

[topcentre21]

Any investment and someone trying to commercially grow they game has to be good.

Just a shame it will be same inadequate people at the very top

[ShropshireBull]

Thats franchising then.  If some of that money is not used to build a stadium for WRL then it will be a massive waste. 

If it gets wasted on central distributions I would cry.  Infrastructure or dont bother. 

[The storm]

13 minutes ago, topcentre21 said:

Any investment and someone trying to commercially grow they game has to be good.

Just a shame it will be same inadequate people at the very top

They are not trying to grow the game

 

They are looking for a return on an inveatment

[DavidM]

If they say theyre from the Saudi Investment Fund put the phone down…

[topcentre21]

9 minutes ago, The storm said:

They are not trying to grow the game

 

They are looking for a return on an inveatment

To get a return on their investment they will have to commercially grow the game.

At the minute there is no return for their investment so they must have a commercially backed plan to get the game to the wider audience 

[RayCee]

10 minutes ago, The storm said:

They are not trying to grow the game

 

They are looking for a return on an inveatment

Surely growing the game is part of improving a return on investment? 

[The storm]

Just now, topcentre21 said:

To get a return on their investment they will have to commercially grow the game.

At the minute there is no return for their investment so they must have a commercially backed plan to get the game to the wider audience 

Not at all

 

They can do nothing and just take a third of the sky TV deal for the next fourty years  

Maybe a third of everything 

So 100 million is like a loan on future earnings 

[RayCee]

4 minutes ago, The storm said:

Not at all

 

They can do nothing and just take a third of the sky TV deal for the next fourty years  

Maybe a third of everything 

So 100 million is like a loan on future earnings 

Why would RL in the UK agree to that? 

[Spidey]

59 minutes ago, Man of Kent said:

Does it smell fishy to you?

I thought feet

[Spidey]

30 minutes ago, The storm said:

Not at all

 

They can do nothing and just take a third of the sky TV deal for the next fourty years  

Maybe a third of everything 

So 100 million is like a loan on future earnings 

Potentially that’s a third of nothing

[Adelaide Tiger]

22 minutes ago, The storm said:

Not at all

 

They can do nothing and just take a third of the sky TV deal for the next fourty years  

Maybe a third of everything 

So 100 million is like a loan on future earnings 

I will hold my hand up and state that I probably know just as much about Equity Companies as the average person in the street.

But I find your comment a bit ridiculous.  If they/any equity company took that approach then that would be commercial suicide as no other sport or entity would ever do business with them.  Surely the objective of any Equity Company is to demonstrate how they have improve income streams so that other potential suitors will want to do business with them.

I also appreciate that this does not guarantee a successful outcome for the game so if this goes ahead I do hope that the RFL put caveats into place that highlight financial and strategic targets that must be met before the Equity company takes their cut.

[Ray Cashmere]

39 minutes ago, The storm said:

Not at all

 

They can do nothing and just take a third of the sky TV deal for the next fourty years  

Maybe a third of everything 

So 100 million is like a loan on future earnings 

I must have missed the press release stating the new TV deal was a 40 year extension...

You don't last long in private equity if you don't grow the asset. The detail will be interesting but if this is being led by the new strategic working group then I'm very hopeful.

[gingerjon]

11 minutes ago, Ray Cashmere said:

I must have missed the press release stating the new TV deal was a 40 year extension...

You don't last long in private equity if you don't grow the asset. The detail will be interesting but if this is being led by the new strategic working group then I'm very hopeful.

You don't need to grow the asset. Obviously, that's the nicest and fairest way, and if they cared about rugby league it's what they would do so we all hope that that would be their direction. But alternatives exist that are less pleasant. Their only requirement is to make money for themselves. If, at the end of the day, they reason that that could only be achieved by selling all of the assets of British rugby league to the RFU (this is an extreme and unserious suggestion) then that would be the direction they would go in.

[M j M]

Whatever comes out of this it sounds a whole lot more promising than the calamitous option a majority of SL clubs ridiculously voted for last time.

Fortunately the working group involves the smarter people running SL clubs so this will inevitably be a sounder proposition - although I'd rather it had a representative of the Championship clubs as well. 

[Ray Cashmere]

1 minute ago, gingerjon said:

You don't need to grow the asset. Obviously, that's the nicest and fairest way, and if they cared about rugby league it's what they would do so we all hope that that would be their direction. But alternatives exist that are less pleasant. Their only requirement is to make money for themselves. If, at the end of the day, they reason that that could only be achieved by selling all of the assets of British rugby league to the RFU (this is an extreme and unserious suggestion) then that would be the direction they would go in.

That would require the RFL to have £100m+ worth of bricks and mortar assets which I'm pretty confident it doesn't have.

Most of the 'value' currently derives from Super League as a commercial entity (insert joke here). I don't see anything contained within that which the RFU would give a second look at. That's *before* you take into account the reputational considerations for all the parties involved...

If, as Hetherington seems to suggest, a new commercial subsidiary will be created under the RFL of which said unnamed investor will have a controlling stake of, they will need to drive the value of TV rights, the sponsorship portfolio and their IP to get a return on investment.