New mega deal could be lifesaver for Kings
A mega £120m (R2.7bn) partnership between Guinness PRO14 and CVC Capital could be a lifesaver for embattled teams such as the Isuzu Southern Kings.
Amid the financial devastation caused by the onslaught of Covid-19, the lucrative new partnership will be welcomed by all clubs in the five-nation tournament.
After fears that the deal might me put on ice because of the global pandemic, all 14 PRO14 clubs will be breathing a sigh of relief.
Covid-19 has put rugby under intense financial pressure and the Kings now have to adapt to unusually challenging circumstances in austere times.
The Kings already felt the effects of Covid-19 when salary payments were delayed until after the Kings received R6m in additional funding from the Nelson Mandela Bay municipality.
Insiders say the new deal will be to the benefit of fans, players, clubs and unions in these key rugby nations over the years ahead.
Under this agreement, CVC Fund VII will acquire a 28% share of PRO14 Rugby from Celtic Rugby DAC and the unions will retain the 72% majority share.
The partnership commitment will allow both PRO14 Rugby and the nation unions to continue to invest in the sport, both professional and amateur, to achieve its potential in the long term.
A portion of the investment will also be held centrally at PRO14 Rugby for the board to invest in further capabilities for the business and to upgrade league operations in line with its growth ambitions.
As part of this agreement the Federazione Italiana Rugby (FIR) will also become a member of Celtic Rugby DAC and receive a share of the investment.
PRO14 said: “Our CEO Martin Anayi will continue to lead the management team at PRO14 Rugby, working closely with CVC and the unions on execution of the commercial plan.
“The unions will also remain independently responsible for the sporting and regulatory elements of the league, via the sporting and regulatory committee.
“In the past four years, the Guinness PRO14 has performed well both on and off the field.
“It has doubled distributions to clubs and facilitating record investment back into the sport from the league.
“This has been recognised by CVC, who share PRO14 Rugby’s vision for the long-term potential of the league.”
After a delay in the payment of April salaries, Kings chair Lotiso Dotwana said: “In these unprecedented and challenging times, I, as chair, plan to lead the Kings board in a wide-ranging strategic review and planning process.
“This is regarding a best possible way forward for the future commercial sustainability of the franchise on the backdrop of the Covid-19 pandemic and subsequent global economic meltdown.”
Such is the gravity of a prolonged lockdown and that some feel it may result in Welsh rugby going bust because of a lack of revenue.
Clubs in Scotland, Ireland and Italy and SA are also facing tough times as revenue streams dry up.
The four Welsh regions are banking on their £40m (R857.2m) share of the CVC deal to help them to balance their books and become more competitive on the field.
The report says: “Without the investment, and given the economic meltdown taking place in all professional sports, there could be serious repercussions.
“The same will go for the PRO14 tournament as a whole.
“They could face crippling clawbacks from sponsors and TV partners if they cannot finish the current season, including the playoffs and final.
“Given the clamour to play international matches ahead of anything else when rugby eventually returns, the shape of next season remains very much up in the air.”