ARLC rules block private equity firm’s plan to buy $600m stake in NRL
Brent Read, The Australian
June 26, 2020 9:11pm
Subscriber only
The strict provisions that govern the ARL Commission are set to scupper overseas investors to buying a stake in the NRL for as much as $600 million.
A private equity firm has reached out to the ARLC and a number of clubs with a view to buying a 20 per cent stake in the code, as has happened in European rugby union where investors have bought stakes in the rugby premiership and the Pro14 competition.
Former Melbourne chairman Bart Campbell, the majority owner of the Storm, helped arrange for the commission to access a $250 million line of credit earlier this year which was brokered by London firm Oakwell Sports Advisory.
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Roosters' Daniel Tupou and Parramatta's Blake Ferguson during NRL match between the Sydney Roosters and Parramatta Eels at Bankwest Stadium. Picture. Phil Hillyard
It is understood those talks led to discussions about investors buying a stake in the NRL. Sources close to the talks believe that the prospect now looks unlikely, the plan not helped by the constitution of the ARLC that requires at least 14 clubs and both state bodies to support any change of such significance.
There is also a belief that with an extended broadcasting deal with Foxtel in their back pocket, the need for rugby league to find additional revenue sources isn’t as dire as it once was.
“For something like this you need unanimity,” one club source told
The Weekend Australian.
Campbell declined to comment when contacted.
However, a source with knowledge of the proposal said the initial approach was made before the game was shut down due to COVID-19.
“This was not about bailing out the game,” he said. “It’s about how do you achieve a better outcome and how do you take things forward and become more professional.”
Campbell and ARL commissioner Gary Weiss are members of the game’s investment committee and ARLC chairman Peter V’landys charged Weiss with taking a deeper look into the proposal.
V’landys declined to comment on Friday.
Former Melbourne Storm chairman Bart Campbell is a member of the ARLC’s inb=vestment committee. Picture: AAP
However, there is a sense that the proposal now looks unlikely to be successful given the hurdles that would need to be cleared.
Queensland Rugby League chairman Bruce Hatcher, whose stance on the proposal would be decisive if it got to that point, wanted to see more detail before he committed either way.
“There are lots of questions,” Hatcher said. “Someone said to me you can never have enough capital. But my question is whether it is patient capital or speculative capital.
“No one goes into these things just expecting to get their money back.”
Earlier this month, it emerged that a global private equity firm had opened talks with Rugby Australia about buying a stake in that code.
The concept has taken off overseas, where private equity firm CVC Capital Partners has bought a 28 per cent stake in rugby union’s Pro14 for 120 million pounds. They have also opened talks about purchasing a 15 per cent stake in the Six Nations Championship.
A private equity firm has valued the NRL at roughly $3 billion. Picture: AAP
Rugby league has largely been off limits until now and news that private equity players are circling the code was met with a mixed reaction by officials who were contacted by
The Weekend Australian.
The sense is that provided the NRL and their clubs can emerge from COVID-19 with their bottom lines intact, they would rather avoid selling a share in the game to privateers.
It is understood the figure of $600 million was arrived at after the private equity company valued the NRL at roughly $3 billion. That figure was derived from calculations around the annual grants to the clubs and states using a multiplier effect, apparently a common accounting principle. However, some club bosses question whether that provides an accurate valuation of the code.
