Private Equity - again

[Tommygilf]

3 minutes ago, Agbrigg said:

Well looking at the response of many sensible posters on here, they clearly suspect that there is some credence in this. Therefore they would hope the NRL may also see it that way also.

And what do they want?

[Chrispmartha]

1 hour ago, Worzel said:

There’s no Private Equity model that doesn’t involve surrendering a share of future income. Their baseline is 3x investment back, most firms aim for 5x. 

Unless you have a business that can increase revenue by greater than 3x within a reasonable time horizon (5 years) then anybody selling a share to PE will end up far worse off. I say that as a bloke with PE partners.

The only “investors” that make sense for Super League are:

- Club owners, who are fans and don’t expect a return 

- The NRL, who have wider interests at stake and can visualise a synergy advantage 

- A partner like IMG, who will provide resources in exchange for a slice of future upside, but without expecting a % of everything from zero

Given what is being discussed is none of those things, then this is an appalling idea. But also given the sport is now being run by the Pie & Peas nincompoops, then it’s probably happening. 

Yes I work with a few PE companies - and it's a bad idea for SL

[JohnM]

The RFL is simply not investable. Any fule kno. 

[Gav Wilson]

2 hours ago, Martyn Sadler said:

The main benefit of the article is to let the NRL know that there are other potential investors who could be interested in buying a stake.

But any actual investment deals are an awful long way off.

The concept of the Pie & Peas Mafia trying to play 4D Chess with Peter V'Landys is very, very funny.

They're the pigeon.

[gingerjon]

33 minutes ago, Tommygilf said:

What does that even mean? 

Can you let me know if you get an answer?

[Worzel]

9 minutes ago, Gav Wilson said:

The concept of the Pie & Peas Mafia trying to play 4D Chess with Peter V'Landys is very, very funny.

They're the pigeon.

It's hilarious isn't it? The bloke is a nailed-on, proper bad a###. Anyone who can wrangle the myriad competing interests in Australian rugby league, from clubs, the RLPA, the QLD and NSW state leagues and the untrustworthy media partners all into a coherent shape, and one that does his bidding, is the SAS of sports administrators as far as I'm concerned. He'd eat our amatuers alive. 

[Worzel]

47 minutes ago, Martyn Sadler said:

Because Rugby League is under capitalised.

But it's a slow burn.

In what way is it under-capitalised? It gets inward investment from club owners way beyond its revenue profile, or indeed its most optimistic revenue prospects. More than ever before in fact. 

Rugby league has an income generation problem, stemming from a competence problem, it doesn't have an investment problem per se. 

[Pigeon Lofter]

1 hour ago, Derwent said:

CVC take 27% of all Prem Rugby revenue. Not 27% of profit but of all central revenue including TV deals. If we did a similar deal, and I reckon they'd want a higher % because we are a bigger risk, then of the current Sky deal they would take about £6m of it per year.

The CVC deal in RU is "in perpetuity".

It never ends!

[Dunbar]

The only real concern I have with Rugby League being involved with PE is; if the players forget their kit, will they be forced to play in their pants?

[Archie Gordon]

British RL has a steering wheel problem - too many hands on the wheel. PE won't fix that - like last time, it will just cost us £££ to (re-)learn the lesson.

[Tommygilf]

5 hours ago, Damien said:

Isn't this what we are doing/have done with IMG?

The irony of a PE firm coming in and insisting that IMG manage their %interest in the League is not lost...

[Bedford Roughyed]

Moronic.

[Gerrumonside ref]

Bonkers.

Edited October 14 by Gerrumonside ref

[MattSantos]

26 minutes ago, Worzel said:

In what way is it under-capitalised? It gets inward investment from club owners way beyond its revenue profile, or indeed its most optimistic revenue prospects. More than ever before in fact. 

Rugby league has an income generation problem, stemming from a competence problem, it doesn't have an investment problem per se. 

I think this is the pertinent question.

Initial quick thoughts as someone in this line of work. Immediately, i ask, what would it be used for?

1. Infrastructure; 2. Upskill in professional skills; 3. Commercial growth?; 4. The overall game - youth etc?

In theory, this makes sense to use more strategic funds to be strategic, build capacity etc. It does appear to be a coup to do this at the expense of the owners funding their own infrastructure etc.. Also, aren't IMG looking after items 2 and 3.

However, 1. PE usually seek returns within 5–7 years, but Rugby League needs long-term, patient investment to rebuild audiences and infrastructure; 2. The track record doesn't sit easily with commercially driven, centralised decision-making - IMG anyone...!; 3. Most clubs lose money and lack assets, a poor foundation for leveraged or debt-backed investment models; 4. Terrible leadership and club self-interest make unified commercial execution difficult, again.. IMG?; 5. On that the IMG partnership already limits flexibility doesnt it? adding PE could create competing priorities and dilute accountability; 6. Lastly, Strategic or “patient” investors (broadcasters, tech firms, international partners) could add capability and reach without sacrificing autonomy. It's all about the TV deal, planning wisely and not PE

Rugby League jumping into bed with PE is like a bloke on overdraft hiring a wedding planner to marry a floosie; flashy ideas, no money, and someone else ends up owning the house. What the sport needs is patience and partnership, not another suit promising salvation in a spreadsheet.

[M j M]

49 minutes ago, Worzel said:

It's hilarious isn't it? The bloke is a nailed-on, proper bad a###. Anyone who can wrangle the myriad competing interests in Australian rugby league, from clubs, the RLPA, the QLD and NSW state leagues and the untrustworthy media partners all into a coherent shape, and one that does his bidding, is the SAS of sports administrators as far as I'm concerned. He'd eat our amatuers alive. 

He might well eat the RFL for lunch but, for perspective, V'landys is also responsible for possibly the most expensive Rugby League administration blunder ever by the cackhanded and disastrously timed renegotiation and extension of the NRL TV deals in 2020.

Edited October 14 by M j M

[Tommygilf]

9 minutes ago, MattSantos said:

I think this is the pertinent question.

Initial quick thoughts as someone in this line of work. Immediately, i ask, what would it be used for?

1. Infrastructure; 2. Upskill in professional skills; 3. Commercial growth?; 4. The overall game - youth etc?

In theory, this makes sense to use more strategic funds to be strategic, build capacity etc. It does appear to be a coup to do this at the expense of the owners funding their own infrastructure etc.. Also, aren't IMG looking after items 2 and 3.

However, 1. PE usually seek returns within 5–7 years, but Rugby League needs long-term, patient investment to rebuild audiences and infrastructure; 2. The track record doesn't sit easily with commercially driven, centralised decision-making - IMG anyone...!; 3. Most clubs lose money and lack assets, a poor foundation for leveraged or debt-backed investment models; 4. Terrible leadership and club self-interest make unified commercial execution difficult, again.. IMG?; 5. On that the IMG partnership already limits flexibility doesnt it? adding PE could create competing priorities and dilute accountability; 6. Lastly, Strategic or “patient” investors (broadcasters, tech firms, international partners) could add capability and reach without sacrificing autonomy. It's all about the TV deal, planning wisely and not PE

Rugby League jumping into bed with PE is like a bloke on overdraft hiring a wedding planner to marry a floosie; flashy ideas, no money, and someone else ends up owning the house. What the sport needs is patience and partnership, not another suit promising salvation in a spreadsheet.

100%

If RL clubs or indeed the RFL want investment, they're genuinely better off going to a Bank. If they can't get investment for what they want from them, its probably because its not a good investment in the first place.

[The Future is League]

3 minutes ago, M j M said:

He might well eat the RFL for lunch but, for perspective, V'landys is also responsible for possibly the most expensive Rugby League administration blunder ever by the cackhanded and disastrously timed renegotiation and extension of the NRL TV deals in 2020.

I have no doubt he will make up for it come the next NRL TV deal

[M j M]

4 minutes ago, The Future is League said:

I have no doubt he will make up for it come the next NRL TV deal

I'm sure it will be much improved but I don't think he'll make up for losing maybe $100m a year for seven years.

[The Future is League]

Just now, M j M said:

I'm sure it will be much improved but I don't think he'll make up for losing maybe $100m a year for seven years.

He might over time.

[Henson Park Old Firm]

Sounds like a Glazer League

[iffleyox]

1 hour ago, Tommygilf said:

The irony of a PE firm coming in and insisting that IMG manage their %interest in the League is not lost...

As I said on this very thread several hours ago - I certainly don’t advocate it but as we all circled the plug hole it would be bloody funny.

[Worzel]

1 hour ago, M j M said:

He might well eat the RFL for lunch but, for perspective, V'landys is also responsible for possibly the most expensive Rugby League administration blunder ever by the cackhanded and disastrously timed renegotiation and extension of the NRL TV deals in 2020.

Have to strongly disagree. The best thing to have in an unpredictable crisis is security, and V'Landys locked that in. Yes, with hindsight the way the pandemic played out meant that perhaps rights were undersold, but hindsight is always 20:20. V'Landys got the sport secure revenue, with front-loaded funding, at a time when it desperately needed it. 

Rome wasn't built in a day, and that 'secure' time has been used to focus on product and presentation quality, resulting in the sport having its best-ever audience and commercial growth performance, putting it in a powerful position for the next media rights cycle. 

[The 4 of Us]

2 hours ago, Archie Gordon said:

British RL has a steering wheel problem - too many hands on the wheel. PE won't fix that - like last time, it will just cost us £££ to (re-)learn the lesson.

RL has neither steering or actual wheels and too many in the driving seat without knowing the directions.

If this “deal” has any truth in it even though it seems to come out of no where in the week before V’Landys lands, then someone needs to be all over the detail, before any vote is made.

The fact there is reference in the article to NRL having “gone cold” when there was only mention last week of Catalan being in discussions with them, and mention of clubs who would miss out on the NRL proposal, smacks of some mischief making by usual suspects.

Bit like the NRL player suddenly considering a RU deal just as his contract is up.

[Copa]

2 hours ago, Worzel said:

It's hilarious isn't it? The bloke is a nailed-on, proper bad a###. Anyone who can wrangle the myriad competing interests in Australian rugby league, from clubs, the RLPA, the QLD and NSW state leagues and the untrustworthy media partners all into a coherent shape, and one that does his bidding, is the SAS of sports administrators as far as I'm concerned. He'd eat our amatuers alive. 

He is also the chief executive of Racing NSW (horse racing), an industry full of “colourful characters”. He’s made changes that have raised huge amounts of money for them.

He’s been managing both rugby league and Racing NSW at the same time.

[GeordieSaint]

You couldn’t make this up…