Premiership clubs should agree on the sale of a £ 240 million stake to the former owner of F1, CVC | sport

Premiership club owners are likely to vote for a proposal to sell a minority stake in private equity firm CVC in exchange for more than £ 200 million, two months after the rejection of a public tender offer. 39; purchase.

CVC, which held a majority stake in Formula 1 between 2006 and 2017, came back with a new offer that would mean that it was running the commercial branch of the Premiership, but not the league itself. This would maintain agreement within the confines of the World Rugby property regulation and would ensure that the 12 clubs would benefit from a greater proportion of profits than in the initial bid.

Premiership Rugby has had talks with the CVC in recent weeks. A firm offer will be presented at the next board meeting, which will be attended by club owners on December 11th. The 12 will each receive an immediate injection of around £ 20 million at a time when only Exeter makes a profit.

The debts of most clubs have increased in recent years, largely due to wage inflation, which has been responsible for most of the growth in turnover. CAC money will not go into players' pockets as the salary cap is indexed for the next two seasons, but it will be used to improve infrastructure and pay down debt.

Bath hopes to redevelop the Recreation Ground, the Harlequins are considering a new stand and Leicester hopes to launch a £ 22 million project next summer for the construction of a hotel and parking lot along the way. their Welford Road stadium. Contracts have been exchanged with a developer and the project depends on the planning permission.

Some homeowners have reservations about having an outside partner who would withdraw a significant portion of the Premiership's profits each year, but others believe that investments are needed to achieve the club's sustainability goals.

This season, Northampton recorded another loss and earlier this month, Wasps announced that its pre-tax loss had more than doubled to £ 9.7m, with the club's debt standing at £ 56m. The bottom line is that if each owner asked that the money owed to him be immediately repaid, there would be no Premiership; Rugby Football Union is not in a position to help after losing 30 million pounds last year.

A question owners must ask themselves is whether the injection of funds would disadvantage them in the long run. They must balance the money they would receive from CVC against the reduction of central funds each year, the money generated by television and sponsorship deals for the league. How long would it take to recover the £ 20 million?

CVC believes that the tournament has been undervalued and that the television market in particular has been under-explored. The current agreement between the Premiership and BT is in effect until the end of the 2020-2021 season when it is in its first year with the main sponsor, Gallagher.

CVC is expected to rely on social media to try to engage Amazon and more young viewers, but it has not done so with F1, which is starting a new contract next year. 600 years old with Sky. Detractors of this deal have accused CVC of having withdrawn much more from the sport than it had.

The clubs would continue to manage rugby as well as policies like rugby cap. CVC could not influence the agreement between Premiership Rugby and RFU on the management of elite players and would not be placed on the professional game board.

A club official admitted that giving up his stake in CVC would be a gamble that would not be taken without careful consideration of what it would mean for clubs in the medium and long term. He said: "It's clearly interesting in the short term because it would provide money immediately for projects or to reduce debt, but the heck will be in the details."