‘Deadset joke’: QRL won’t let NRL sell game’s soul
Queensland Rugby League chairman Bruce Hatcher has slammed the concept of private equity in the NRL, making it clear his organisation will torpedo any attempt to sell off a stake in the code to cashed-up investors.
The rebirth of the Rabbitohs under Russell Crowe is evidence privatisation can work in rugby league but Hatcher says talk of the NRL sourcing a rumoured $600 million from a 20 per cent sell-off is "ridiculous".
ARL Commissioner Gary Weiss is mulling over several private-investment proposals submitted to ARLC boss Peter V'landys.
The sharp-minded Weiss is nobody's fool, having completed extensive work during his business career in mergers and acquisitions.
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But here's the reality for the cash-strapped NRL: the private equity push is effectively dead before it reaches first base.
Under the terms of the ARL Commission constitution, the NRL would need the support of the Queensland and NSW Rugby Leagues in a voting process for any purported sale of rugby league to take place.
And judging by the words of Hatcher, who has more than 50 years' experience in accounting, private ownership of the NRL is off-limits.
"I have spoken to Peter V'landys and made it very clear the investors can get stuffed," Hatcher said. "That's as blunt as I can get.
"I have never seen any proposal or idea more ridiculous (than a private equity stake in the NRL). If there is any breath left within me before my 100th birthday, I won't be supporting private equity and nor will the Queensland Rugby League.
"We have the power of veto. If either the NSW or Queensland Rugby League say no to this, they can't get the sale up and the NRL will find on this occasion we won't support it.
"I want it knocked stone dead. This will not go ahead. I am absolutely filthy."
Two months ago, this columnist called V'landys to discuss rumours of a European private equity firm, CVC Capital Partners, buying a stake in the NRL.
CVC has an estimated $111 billion in secured commitments. Spending $600 million to own one-fifth of the NRL would be a financial drop in the ocean for the Luxembourg-based giant.
At the time, V'landys insisted the idea was fanciful. Now, the ARLC is suddenly performing due diligence on CVC's proposal, among others.
There is a school of thought private ownership can be helpful for the NRL, which has no assets and could leverage a $600 million investment as a building block to turn the sport into a fiscal powerhouse.
But Hatcher questioned the motives of any private investor.
"Think about this," says Hatcher, a long-serving chartered accountant.
"If we sell a stake in the NRL to private equity, and they are ready to exit in three to five years' time, who is going to buy that stake in the game?
"The NRL will have to buy back a stake in the game it owns.
"It's a deadset joke.
"Most private equity firms operate over three-to-five-year terms. They will rip the guts out of rugby league to suit themselves for an eventual sale.
"They are only in this to make money. The only people who could buy a 20 per cent stake back is the game is the NRL itself.
"There has been all this discussion going on between the NRL clubs and no one has bothered consulting the Queensland Rugby League. I am furious about this. It should be killed off immediately, buried, and let's get on with running our game."
V'landys says the ARLC is proceeding cautiously, agreeing the devil is in the detail.
"We have a responsibility to look at private equity. Even if you don't proceed with it, you have to make sure you aren't letting go of an opportunity," he said.
Asked if he is reluctant to sell a stake in the code, he said: "There is no reason to at the moment and you have to look at the consequences that go with it if you do (give up a stake).
"There is a long way to go before those sort of numbers (a $600m sell-off) can be substantiated or generated.
"It's all headline stuff without any due diligence.
"All you are seeing at the moment are numbers that it make (private equity) look appealing, but once you drill into it, naturally you will find pimples.
"People can see we have got future revenues and they want to be a part of it. The game is being set-up cost efficiently ... if you're an investor, why wouldn't you look at us?"
If Hatcher gets his way, the likes of CVC won't get through the front door.
Originally published as 'Deadset joke': QRL won't let NRL sell game's soul