Call for coherent strategy as new investors arrive into English rugby
Leonard Curtis director and ex-rugby player Alex Cadwallader welcomes fresh investment but warns league-wide effort is needed to boost long-term prospects
- With Exeter Chiefs set for takeover and new investment coming into Bath Rugby, Northampton Saints and Champ club Cornish Pirates, Cadwallader says entry of new backers will be “litmus test for the game” after financial difficulties over recent years.
- As Prem Rugby plans shift to expansion league, Leonard Curtis Rugby Finance Report co-author Prof Rob Wilson says: “If governance reforms and franchise-style protections hold, I expect further selective investment over the next two to three years.”
Alex Cadwallader, a Leonard Curtis director and former England U21 rugby union player, has said the recent flurry of investment deals in English club rugby marks a “material step forward” for the sport, but warned that any fresh backing needs to be coupled with a co-ordinated approach across the domestic game.
Earlier this month, a proposed takeover of Exeter Chiefs by Black Knight Sports and Entertainment, the US billionaire owners of Premier League football team AFC Bournemouth, was approved by the Prem Rugby club.
It follows Sir James Dyson’s purchase of a 50% stake in Bath Rugby, and Steve Zander’s investment into Northampton Saints, with the financier leading a £2.5m fund raise and acquiring 14.5% of the club. The deals come after Newcastle were taken over by Red Bull last August.
Meanwhile, in Champ Rugby, American private equity firm Stonewood Capital has agreed a seven-figure deal for a minority stake in Cornish Pirates, with at least four other Champ clubs now reported to be holding talks with serious investors.
Cadwallader – who played for Newcastle, Bristol, Newport and London Welsh over a 10-year career – said the new wave of investor interest represents a significant shift for the game following a deeply challenging period marked by the collapse of Prem Rugby clubs Wasps, Worcester Warriors and London Irish in 2022 and 2023, and Champ Rugby club Jersey Reds in 2023, due largely to financial difficulties.
“Given how clubs have struggled to find investment, especially the four that failed in the last five years, this is a material step forward – and both Prem and Champ Rugby will be delighted with the profile of the new investors,” he said.
“Whilst we don’t know the detail of some of these investments, the value obtained for the clubs and the return, or loss, made by the previous owners, the investors appear to be focused on long-term growth, as opposed to simply rescuing distressed assets, or a property play like we saw with Worcester and Wasps.”
However, he added: “The game has had wealthy investors in the past but still lost hundreds of millions of pounds so there needs to be more than new investment. There needs to be a coherent strategy that the clubs all work towards.”
Prem Rugby franchise-style model driving investor appetite
The levels of investor interest in English rugby have increased since Prem Rugby confirmed plans earlier this year to bring an end to promotion and relegation and relaunch the top-flight as an expansion league from 2029/30.
The move marks a seismic shift for English domestic rugby, which has struggled to find a financially sustainable model since the game turned professional in 1995.
The difficulties faced by the sport have been highlighted in the annual Leonard Curtis Rugby Finance Report, with the most recent edition showing that top-flight clubs racked up cumulative losses of £176.9m over the ten-year period from 2014/15 to 2023/24.
The figures also revealed that total debt in 2023/24 for the ten current clubs amounted to £342.5m, up from £329.8m in 2022/23 for the same set of clubs.
The next edition of the report, featuring data up to the 2024/25 season, will be published this autumn.
Prof Rob Wilson, co-author of the report, said the shift to a franchise-style model has helped transform the appetite for investment in English club rugby, but observed that numerous other factors are also at play.
“The move towards a more closed or semi-closed model matters enormously because it reduces downside risk, and investors prize certainty,” he said.
“Relegation has historically acted as a deterrent because it creates revenue volatility and removing that changes the investment case materially.
“However, it is not the only driver, and I think investors are also seeing untapped media, event, data and fan engagement opportunities that rugby has under-monetised relative to its audience strength.”
He added: “I suspect we are seeing a broader macro trend play out as private capital continues to look for premium live content, community-rooted brands and assets with rights-growth potential.
“We’ve seen this across football, cricket and women’s sport, and rugby is part of that wider search for undervalued sports properties.
“There is also likely a consolidation logic emerging, where multi-club and multi-sport ownership models, as seen with Black Knight, view rugby as complementary within wider portfolio strategies.”
Growing focus on lifting profile of rugby’s star players
Cadwallader noted that the arrival of new investors into the game also comes amid a growing focus on lifting the profile of individual players, highlighted by the move into the sport of promoter Eddie Hearn, who has signed up Bath’s Finn Russell and Northampton Saints’ Henry Pollock to his Matchroom Talent Agency.
“Rugby is still seen as having many untapped possibilities,” Cadwallader said. “The reach of individual athletes is something that is ever increasing across sports, and rugby has a history of not promoting its stars, with its focus on the team element which is essential to performance on the pitch.”
Prospect of further investment in next two to three years
As rugby and the wider sports and entertainment landscape continue to evolve, Prof Wilson – who is a professor of applied sport finance and dean at UCFB – anticipates further investment in English clubs to emerge in the coming years, but stresses that much will depend on whether the game is proven to be on a more financially sustainable footing.
“If governance reforms and franchise-style protections hold, I expect further selective investment over the next two to three years, particularly from investors looking for undervalued, culturally strong assets with commercial upside,” he said.
“What we may be witnessing goes beyond the simple idea that new money is entering rugby, and more about a test of whether the sport can become investable at scale.
“That depends less on isolated deals and more on whether Prem Rugby can convince capital markets it has a coherent growth model. If these investments become catalysts for broader reform, they could prove transformational, yet if they are treated as isolated lifelines, the underlying problems remain unresolved.”
Cadwallader concluded that the entry of new investors will be a “litmus test for the game,” observing that “you would expect, with the new profile of investor and efforts to improve governance that Prem Rugby have now put in place, the game would start to move away from losing in the region of £30m a year”.
He added: “There certainly is some momentum in rugby currently from the outside. However, the devil is in the detail. Have the clubs traded at a higher value than previously and what was the enterprise value at the point of the latest round of investment?
“I am unaware of any investor or owner making a profit on their investment in English rugby yet but clearly some of these investors feel that they can.”
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