The French Rugby Federation (FFR) has opened the door to the Six Nations Tournament to an investment fund. On January 16, the elected members of the steering committee voted in favor of a partnership project for the company CVC Capital Partners to buy back part of the commercial rights of the competition. Ultimately, this entry into the capital of the Luxembourg company will require the signing of a contract by the FFR, as well as by the other federations concerned (England, Ireland, Wales, Scotland, Italy).
According to our information, nine of the forty elected members of the steering committee – those unfavorable to the project – sent a letter to express their ” worry ” to the ministry in charge of sports and warn against “An infinite financialization of rugby”.
On Sunday January 17, the letter asks the Minister Delegate, Roxana Maracineanu, to open a joint investigation, both by the General Inspectorate of Education, Sport and Research and by the general finance inspectorate. Contacted, the entourage of Mme Maracineanu has not yet commented. For the moment, the ministry has not yet read the text.
The letter also asks the ministry to plead with the FFR so that it organizes “A referendum to obtain the approval” some 1,900 clubs across the country, professional and amateur alike.
343 million euros promised in five annual installments
The president of the FFR, Bernard Laporte, is one of the main supporters of CVC Capital Partners. On the French side, the negotiations have so far taken place under the responsibility of Claude Atcher, director general of the organization of the 2023 Rugby World Cup in France, a close friend of Mr. Laporte. The latter, in a statement released on January 16, said that the entry of this fund would allow federations to “Develop their economic potential over time”. Expected duration: half a century!
Former holder of the commercial rights to Formula 1, the private equity group intends to acquire 14.3% of the company responsible for the commercial rights of the Six Nations Tournament, promising 305 million pounds (343 million euros) to be paid in five annualities. Possible bonus: 60 million pounds (67.4 million euros) ” if the realization of the business plan makes it possible to achieve certain objectives ” by 2028, adds the federal press release.
These calculations did not convince Florian Grill, the unsuccessful candidate for the federal election. In their letter to the Minister, he and his eight running mate present on the steering committee raised many questions.
They say they learned about the draft contract in the form of a translation “Approximate”, without annexes nor ” explanatory diagram ” while at least one of the companies involved is domiciled in the Jersey tax haven. Document impossible to communicate to the clubs for the moment, because struck by obligation of confidentiality, according to the federation.
Fear of a veto
What tax risks would the FFR take with this investment fund, insofar as “The operation provides that the contracting federations take out specific insurance” ? How to avoid, too, “conflicts of interest” ?
According to opposition officials, the planned contract would give CVC a right of veto for the addition of a new nation in the Tournament – the name of Japan often comes up among the avenues explored. In his press release last weekend, Mr. Laporte assured that the member federations of the Six Nations ” would retain (…) their exclusive power to regulate sports practice and organize competitions ”.
Without communicating the precise amounts, the authors of the letter are also alarmed at the risk of“A great imbalance” to the detriment of France and giving “The beautiful part” to England.
The contract could finally allow the investment fund an IPO of a structure to which would be linked its other investments already recorded in rugby, such as the English championship or the European Club Cup.
Also intended for the sports advisers of the President of the Republic and the Prime Minister, the letter expresses a final fear. The one that “Commercial and unique issues” take over “Sports and human questions”.
The elected representatives of the federal opposition propose a meeting with the ministry, the presidency of the FFR and that of the National Rugby League, responsible for the interests of the French championship.