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LNR pursues private equity talks, but ‘not just to pay off clubs’ debts’

The Ligue Nationale de Rugby (LNR), the organising body for French rugby’s union’s Top 14 and Pro D2, is open to continuing discussions over a private equity deal worth €200m ($233.4m) but, it says, not simply to pay off the debts of certain clubs without a wider development plan in place.

It emerged last week that Novalpina, the London-based private equity firm, is looking to acquire a stake in a commercial entity set up by the LNR.

LNR president Paul Goze has flagged up the league’s willingness to pursue the avenue of private equity investment, but only on certain terms.

He told L’Équipe today (Monday): “This is not a favourable period for these types of discussions. It is not a matter of bringing in an investment fund simply to make it pay off the debts of a certain number of clubs without developing a specific plan. This type of investor must allow us to grow.”

Goze said that the league has not closed its mind off to a deal but insisted that there is “a process to follow and we are not at an advanced stage of discussions at all”.

The Novalpina proposal, which was first reported by French rugby newspaper Midi Olympique, would involve the purchase of a 20-per-cent stake in an LNR commercial entity and an involvement in broadcast and sponsorship rights sales.

The private equity proposal comes with French clubs unsure as to whether they will receive government aid to help offset the financial effect of the Covid-19 pandemic.

Goze continued: “Some presidents are in for it, others downright against it, so the discussion will be very open.

“Because let’s not forget that this investor, if it happens, would hold a minority but significant shareholding and therefore integrate into the decision-making process. One day it [the investor] would naturally sell its shares, which we would not have a calling to buy back. Another fund would take its place and the League would get caught up in an unending process about which it must be aware.”

Earlier this year, private equity firm CVC Capital Partners completed its acquisition of a 28-per-cent stake in the Pro14 cross-border rugby union competition. The company already holds a 27-per-cent stake in England’s Premiership and has also been planning a £300m (€331.2m/$386.5m) investment in the Six Nations national team tournament, albeit those conversations have been complicated by the effects of Covid-19.

Domestic broadcast rights to the Top 14 are held by pay-television broadcaster Canal Plus in a deal that runs from 2019-20 to 2022-23. The contract is worth €97m per season (although a fee compromise was reached following the early termination of the 2019-20 season because of Covid-19).

Canal Plus has broadcast Top 14 since 1995 and also holds the competition’s international rights from 2019-20 to 2024-25, which includes the second-tier Pro D2 international rights from 2020-21.