Expert calls for radical rugby reform to ensure game's future

PRIVATE equity firm CVC Capital Partners needs to become more active as an investor in rugby and is the best-placed stakeholder to help realise a British and Irish league, believes leading sporting governance expert Nicola Johnston.

- SION BARRY

The Scot is a member of the Scottish Rugby Union's standing committee on governance and part of lobbying group Progressive Rugby, which is calling for the game to be made safer to address head impact injury concerns against the backdrop of an ongoing class action from former players.

Ms Johnston described as "at best amateurish" the consultation document from the Welsh Rugby Union on the future of the professional game, in which its preferred option is to reduce the number of regions from four to two.

With the consultation now closed, the board of the WRU is expected to make a decision later this month. Although the union did reference a number of outcomes, including three regions and maintaining four (but with two being on more favourable funding), Ms Johnston, who runs Nicola Johnston Consulting and is a leading expert on regulatory compliance, said it was too heavily loaded in favour of its preferred option.

CVC has minority equity stakes in the English Premiership and the United Rugby Championship (URC), in which the four Welsh regions compete, alongside an interest in the Six Nations.

The WRU, as with other unions whose sides compete in the URC, has fully drawn down its payment instalments from CVC, which gave the private equity firm a 28% interest in the competition in return for a £120m investment. For the Six Nations deal, which gave CVC a 14% interest and rights to a share of commercial income generated, the WRU in July received its last phased drawdown payment (£8.5m) for its £40m share in what was a £360m deal with the Six Nations unions.

All the unions are now facing a straight dilution, with CVC taking its revenue share after completing its phased payment schedule. The original thinking was that, with CVC's involvement, the commercial pie from television and sponsorship deals across the three competitions would grow enough to offset the private equity firm's income share.