US-based private equity firm KKR is in talks with Rugby Australia about an investment in the sport, it has been reported.
The talks, which have been reported by the Sydney Morning Herald, are said to be at an early stage.
KKR is said to be in talks with both Rugby Australia and the Melbourne Rebels, the Super Rugby team, about a stake in the sport in Australia worth “hundreds of millions of [Australian] dollars”, according to people “with direct knowledge of the matter”.
The reports came as it was announced that Rugby Australia has agreed on a broadcast deal with pay-television broadcaster Fox Sports to air the new Super Rugby Australia competition from July 3.
The parties are said to have met last week and will pursue investment discussions further on the 2021 competition model for the professional game, and in particular Australia’s interests at a Super Rugby level.
Hamish McLennan, the new Rugby Australia chairman, told the Sydney Morning Herald: “I haven’t spoken to KKR directly but obviously they are a seasoned and highly respected firm. We’ve had good inbound interest from UK and American private equity firms and I’m very open to continuing those discussions at a Super Rugby level.
“The time is right to have these discussions as we look to alternate funding mechanisms for the game. Anything I can do to free cash up to reinvest in grassroots rugby will be good for the game.”
Private equity investment in rugby union continues to intensify with CVC Capital Partners having recently completed its acquisition of a 28-per-cent stake in the Pro14 cross-border competition.
CVC already holds a 27-per-cent stake in England’s Premiership and has also been planning a £300m ($382m) investment in the Six Nations national team tournament. The Pro14 agreement also came with CVC in exclusive talks about a €2.2bn ($2.5bn) proposal to invest in Italian football’s Serie A.
Fox Sports broadcast deal
On the new broadcast rights agreement, Rugby Australia said it has reached an agreement with the Foxtel Group on a modified broadcast arrangement for 2020 which has given the go-ahead for the proposed Vodafone Super Rugby AU tournament.
The five-team competition, which features the four Australian Super Rugby teams plus the Western Force, will kick off on July 3 and will be contested over 12 consecutive weekends. All matches will be broadcast live and ad-break free on Fox Sports on Foxtel, Foxtel Now and streamed on Kayo.
All matches will be played at closed venues, Rugby Australia says it will review its position regarding spectator attendance regularly in line with government restrictions.
The restart of games and the broadcast deal will be welcome news for the sports governing body which earlier this month announced it was cutting 47 of its 142 full-time staff in a restructure forced by Covid-19.
Senior staff have also taken a five-per-cent pay cut, and 30 contractors and casual staff have had their contracts terminated. The previous month telecoms operator Optus announced it was pulling out of bidding for rugby union’s domestic broadcast rights.
McLennan, the former senior News Corp executive and chief executive of Australian free-to-air commercial broadcaster Ten, was appointed chairman of Rugby Australia in May, and will join the board as director and chair-elect at its next meeting on June 15.
At the time his new role was made public Australian media outlets were quick to suggest that McLennan’s previous role at News Corp might be a factor in negotiations over a new deal with Foxtel, which is 65-per-cent owned by NewsCorp.
Commenting on the new broadcast deal Rugby Australia’s interim chief executive Rob Clarke said: “A huge thanks goes to our broadcast partner of 25 years, Fox Sports, who have backed the revised competition format for 2020 and have delivered the best possible news to rugby fans across the country today.”
Head of Fox Sports Peter Campbell said: “It might not be Super Rugby as we know it, but it’s super to have rugby back on Fox Sports.”
Campbell also announced that Foxtel has reached an agreement to air the New Zealand Super Rugby Aotearoa competition, which starts this weekend, and features New Zealand’s five Super Rugby teams – the Blues, Chiefs, Hurricanes, Crusaders and Highlanders – play each other home and away over 10 weeks.
(additional reporting by Martin Ross)