Scottish RFU chief executive says CVC will complete Six Nations deal by end of 2020
A £300 million deal for Luxembourg-based venture capitalists CVC to take a 17 per cent stake in the Six Nations is expected to be completed by the end of December, according to Scottish Rugby chief executive Mark Dodson. The completion of the deal, which sees payments spread over five years, would be a financial shot in the arm for the Six Nations, whose unions are collectively expected to lose £200m this year due to Covid. The SRU is expected to receive £40m as its share of the Six Nations deal.
In a pre-recorded presentation to the SRU’s AGM on Thursday, Dodson told Scotland’s clubs that another CVC deal to buy 28 per cent of the Pro14, which was completed in May and will eventually bring £20m into Murrayfield’s coffers, had secured the Union’s immediate future. He then added that the imminent signing of a deal with CVC to buy a stake in the Six Nations would safeguard jobs and the business via an immediate cash injection, while also ensuring that the SRU can borrow against future tranches of payments from CVC over the next five years.
“The initial proceeds of the Pro14 investment have been retained within the business to provide the financial security which allows us to trade through the worst effects of the pandemic,” said Dodson.
“Crystalising the value of the tournament has transformed Celtic Union revenues and formed the foundation for a credit solution from the bank, and we hope to be able to announce further reassurance before January through the signing of a Six Nations deal, again with CVC.”
Although Dodson provided a rough timeline for the deal with CVC, he was not explicit on the terms for the sale of a stake in the Six Nations. The original deal was for CVC to spend £300m to take a 17 per cent stake in the tournament, however in the summer reports circulated that the venture capitalists were seeking to renegotiate the deal, inserting a clause allowing them to withhold payments should future fixtures be hit by a pandemic.
Dodson’s candour was a result of the SRU’s late filing of its accounts, which its byelaws state should be published by the end of August. The SRU chief executive, who was last year paid almost £1m, justified the tardiness by saying that confirmation of the Union’s lending facility with the Royal Bank of Scotland, which is a pre-requisite to securing the auditor sign-off necessary for its accounts to be filed, was dependent upon the signing of the CVC Six Nations deal.
Dodson said that the SRU is on course for an £18m shortfall in the present financial year, which could rise to £30m if there are no crowds during the remainder of the 2020-21 season, and only 25 per cent capacity during the 2021 Autumn Tests. Dodson’s summary of the accounts to the end of May – a period which includes two months of the pandemic – revealed that turnover dropped from £61m to £55.47m, while costs rose from £59.2m to £60.74m, producing a loss of £5.27m. However, this was more than covered by the first tranche of CVC’s Pro14 payments, which saw the SRU receive £8.38m of the £20m that will eventually be paid to Murrayfield.