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‘We need to have a look at it’: Souths boss urges clubs to consider private equity

“I think we need to have a look at it [with] the world of broadcasting rights being in a state of flux to a significant degree,” Pappas said. “I think that’s going to become even more extreme in time. I think we’re obliged to consider other options.”

South Sydney are one of the NRL's leading brands.

South Sydney are one of the NRL’s leading brands.Credit:Getty

ARL Commission member Gary Weiss is analysing the approach from Oakwell Sports Advisory, the British entity that has brokered CVC’s huge investment in northern hemisphere rugby during the past two years, although there is a lukewarm reception for it at head office and great scepticism about the numbers and motives of the suitors.

The Storm, whose then chairman Bart Campbell first brought the idea to the NRL earlier this year, are the most vocal supporters of entertaining private equity and were among the club representatives on the Zoom call when Oakwell partner Andrew Umbers, a former chairman of Leeds United football club, pitched to them in June.

NRL officials are uneasy about a marriage with private equity, arguing rugby league is not in financial distress and that when a strategy is formulated to future proof the game by acquiring assets, such as a stadium, they would prefer to use debt rather than pay for it by selling off a share of the code.

Melbourne co-owner and chairman Matt Tripp.

Melbourne co-owner and chairman Matt Tripp.Credit:Arsineh Houspian

The exact plans of would-be private investors haven’t been articulated. However, sources with knowledge of CVC’s purchase of minority stakes in Premiership Rugby and the Top 14 competition, and bids for pieces of other rugby properties, such as the Six Nations and the British and Irish Lions, believe the company could look to bundle the NRL into a one-stop “Netflix of rugby codes”, which could vastly increase the broadcast rights fees rugby league generates from international markets.

Tripp, the Storm chairman, said he would be contacting club and state chairs directly, urging them to be open minded and not miss an opportunity to take the code to the next level.

“If there was to be a path found, I think the naysayers need to be aware that an injection of cash from a passive investor that would leave the NRL in the driver’s seat to control and run the game … that is not a bad thing for the game,” Tripp said.

“No one is suggesting or anticipating that a 20 per cent stakeholder is going to come in and take over the NRL. That’s fanciful and that’s something I don’t think people have thought through properly. No one is going to own a stake in their clubs. They would own only a 20 per cent [stake in the game]. Nothing more, nothing less.”

Tripp knows the NRL could only consider selling a 20 per cent share if it could increase revenue by at least the same amount, but moved to hose down concerns raised by Hatcher about a buyer wanting out after three to five years and stripping money out of the game in the meantime.

“[The details of any sale] would need to be mutually agreed,” Tripp said. “If they agree on a partner in the first place, and it’s the right fit for the NRL, they could end up owning it for 50 years. That all comes down to the minor detail.”

Oakwell and Melbourne face a tough task, with 14 of 16 clubs as well as the QRL and NSWRL having to agree to any such constitutional change.

Pappas, though, is at least one club boss who has not closed the door on it.

“That doesn’t mean I’m a supporter of it because I haven’t seen [the proposal],” the Souths chairman said. “I’m only talking in principle. As with all private equity deals, and I’ve seen a lot of them, the devil is in the detail. It comes down to issues of control, pre-emptive rights, etc.

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“We can’t delude ourselves. There could be players involved in organisations because there is a nice profit. So they’re not doing it out of generosity. They’re not benefactors. We’ve got to be vigilant. We’ve got to look at it carefully and we’ve got to make a reasoned decision. Hasty decisions, either for or against, are not in anyone’s interests.

“We’re just custodians. We’re in positions of administrative authority as custodians. We’re obliged to consider things on their merits for the sake of our fans and our members.”

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