Aviva Premiership: something exciting happens

[Dave Cahill]

I think thats an overly dramatic reading of the situation

The torygraph has a less excitable take on it

https://www.telegraph.co.uk/rugby-union ... istration/

Leicester Tigers have announced that two current board members will invest £13 million into the club in order to avoid the need for "urgent alternative funding" and the possibility of administration.

The shared subscription, which still requires approval from the club's other shareholders at a meeting on Mar 3, would come from Tom Scott – who currently owns a controlling stake in the Tigers – and Peter Tom, Leicester's long-standing chairman. The former would fund up to £10 million with the latter expected to fund £3 million.

While the size of the investment, in a season which has already seen two Premiership teams – Worcester and Wasps – go to the wall, would be welcomed by fans of Leicester and English rugby, its necessity only stands to further highlight the precariousness of clubs' finances.

The Tigers, the biggest and best supported club in England, have seen their revenues battered by a post-Covid landscape and a reorganised fixture list. Leicester were due to face Wasps and Worcester on consecutive weekends in October, but neither of those fixtures took place, depriving the East Midlands club of around £700,000.

In a circular sent to shareholders regarding Scott and Tom's shared subscription, chief executive Andrea Pinchen added that Leicester "may well breach its [£4m] overdraft limit with HSBC during the first quarter of 2023". Repayments for the Department of Culture, Media and Sport's Covid-19 winter survival loan programme also begin in September, at an annual cost of approximately £863,000 plus interest on a loan of £6.9m.

There is an expectation within Welford Road that significant funds will be recouped before the end of this season – as things stand, only two of Leicester's eight remaining matches are away from home – but the current situation has left the Tigers "facing a deteriorating financial position which is expected to lead to a cash squeeze" in the midst of a cost-of-living crisis.

Although it is understood that the threat of administration is still some way off, the shareholders' circular suggested, were this proposal not to be approved, that the club's "directors believe that they may have no choice but to appoint administrators" which could see Leicester "expelled from all competitions, including the Premiership".

"The board believes that the subscription is essential to secure the company’s financial position and to enable the survival and future success of Leicester Tigers," read the circular. "If the resolutions are not passed then the proceeds of the subscription will not be received by the company and the board would have to find urgent alternative funding. There is no guarantee that such alternative funding will be available or on terms deemed to be acceptable either to the directors or to the company’s creditors.

"Given the company’s current and anticipated working capital requirements, the directors believe that should the resolutions not be passed they may have no choice but to appoint administrators. This will not only negatively impact shareholders but the directors believe that Leicester Tigers could, as a consequence, be expelled from all competitions, including the Premiership, and so the subscription is vitally important to the future of the club."

The circular confirmed – as revealed by Telegraph Sport – that Leicester had received a financial settlement for the release of head coach Steve Borthwick and defence coach Kevin Sinfield when the Rugby Football Union approached the Tigers in December, but that those funds are being ring-fenced to hire the duo's replacements. Regardless, the circular states, the RFU's approach has caused the East Midlands club "significant disruption" which could have "financial implications should on-field performances suffer".

"In December 2022, the club agreed to release Steve Borthwick and Kevin Sinfield from their contracts to join England rugby and appointed Richard Wigglesworth as interim head coach," it added. "Whilst a financial settlement for their release was agreed with the RFU, it is expected that most of that settlement will be used for hiring replacements, which if employed from outside the existing coaching team, will potentially require contracts to be bought out.

"The departure of both coaches has caused significant disruption to the club and whilst the board has every confidence in the interim coaching team, there may be financial implications should on-field performance suffer."

If the share subscription proposal is accepted by shareholders on Mar 3, then the DCMS would also have to give its approval. Leicester would receive £8.3 million initially – £5 million from Scott and £3 million from Tom –with a further £4.7 million of Scott's money being made available to be called upon, if required, from June 2023 onwards.

The result would see Scott’s shareholding increase from 45.32 to 59.25 per cent initially, and up to 71.42 per cent if the further amount is called upon. Tom’s position would increase from 8.6 to 29.30 per cent initially, then could fall back down to 20.55 per cent. In any event, the duo's controlling stake of the club would increase from around 50 per cent to over 90 per cent should the proposal be received favourably by shareholders.

"We're very grateful that Peter and Tom are looking to extend their investment in Tigers," said Pinchen.

"The club is suffering some very challenging conditions from factors mostly outside of our control. Their decision to invest at this time will give the club the financial assurance to execute the club's strategy of continued success and financial sustainability."

Leicester were put up for sale in June 2019, with a price tag in excess of £50m.

[Grumpy Old Man]

It could also be that the two main shareholders are trying to take control of the company on the cheap. The main shareholders interest increases by nearly 14% for a £5m investment. That puts an approx valuation of £36 m on the company as it stands. It may be a fair figure or it may not. Were the other shareholders asked if they would put in funds?
Pure speculation on my part but it sounds a bit like a smash and grab.


Sent from my iPad using Tapatalk

[Dave Cahill]

It could also be that the two main shareholders are trying to take control of the company on the cheap. The main shareholders interest increases by nearly 14% for a £5m investment. That puts an approx valuation of £36 m on the company as it stands. It may be a fair figure or it may not. Were the other shareholders asked if they would put in funds?
Pure speculation on my part but it sounds a bit like a smash and grab.

Definite whiff of that alright

[paddyor]

It could also be that the two main shareholders are trying to take control of the company on the cheap. The main shareholders interest increases by nearly 14% for a £5m investment. That puts an approx valuation of £36 m on the company as it stands. It may be a fair figure or it may not. Were the other shareholders asked if they would put in funds?
Pure speculation on my part but it sounds a bit like a smash and grab.


Sent from my iPad using Tapatalk

It’s on the market for 50m isn’t it?

Edit that’s right there in the previous post.

[ronk]

At first I'd have to think that I'd be calling bluff if I was a substantial Leicester shareholder.

Diluting shares to give an 80% loss is severe. Probably worse than taking your chances with administration and a year in the championship. And it won't come to that.

The two would lose just as much, if not more.

[tigerburnie]

Share ownership in the Tigers is limited and controlled, these two current shareholders are not up to the maximum any person/group can hold. People are trying to value shares against the reported "sale price" a while back of £60 million, which was wildly over the value hence no buyers came forward. A large portion of the shares are fan owned and they are restricted and can only be sold back to the club, to prevent asset strippers trying to do "a Worcester" on us. This was in response to a shortfall in cash due partly to covid loan repayments and the missing home fixtures against the two collapsed clubs, having only played 5 home games up to today. This is not unlike the situation where Exeter's owner bought the hotel to do the same sought of thing.

[ronk]

Regardless of the valuation, based on the above figures: the owners of almost 50% of the company will see their ownership diluted to 10% and they won't get a penny. Their individual shares will be more valuable but most of the benefit will go to 2 owners and they'll massively lose voting power which will make Leicester more vulnerable to asset stripping.

You take an 80% loss and you don't even have an exit. With no voting power all you can do is sell your shares to the 2 owners at whatever price they want to pay until they take the company private at a time that suits them, or sell to someone who will.

[tigerburnie]

The new owners cannot own a majority of the shares, that was laid down when the game went pro, most of the season ticket holders were given their shares for free on the understanding that they couldn't sell them other than to the club.

[tigerburnie]

Dan Mckellar joins Leicester next year as head coach, he did a decent job in the role for the ACT Brumbies.

[paddyor]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

[blockhead]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

[The Doc]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

[Ruckedtobits]

Mail online carrying a piece about L Irish "risking" not paying Player & Staff this week due to delay in completing an incoming investment.

Can't post or copy through 'firewall'.

[paddyor]

Mail online carrying a piece about L Irish "risking" not paying Player & Staff this week due to delay in completing an incoming investment.

Can't post or copy through 'firewall'.

Daily Mail saying take over by US fund imminent and they've transfered funds to cover wages.

[riocard911]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

I remain worried, that CVC will use their financial leverage to force the Irish provinces and the Saffer franchises to muck in with and rescue the English and Welsh clubs from their current doldrums. "For the greater benefit of NH rugby" it'll be sold as........

[neill_m]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

Viaplay aka Premier have the URC till 2025, BT Sport have the Premiership and Heineken Cup till 2024, 6N rights in UK/Ireland locked up to 2025.

[Oldschool]

Eggs and one basket alarm bells going off or should be.

[Oldschoolsocks]

Newcastle rumoured to be considering dropping down to the Championship and LI in a cashflow bind with a struggle to get new investment. Newcastle have dropped ST prices from nearly 300 to 180 which is below the level of some championship sides.

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

The Heineken Cup was much better when Sky had it all, it was advertised/hyped really well, familiar and consistent presentation and format PLUS you only had to pay for SKY Sports, throw in the movies for free and jib was a good’un. Now the coverage is just a bit all over the place and it’s just not as good.

The only thing is if this does happen what will Neill do to keep himself busy ?

[neill_m]

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

The Heineken Cup was much better when Sky had it all, it was advertised/hyped really well, familiar and consistent presentation and format PLUS you only had to pay for SKY Sports, throw in the movies for free and jib was a good’un. Now the coverage is just a bit all over the place and it’s just not as good.

The only thing is if this does happen what will Neill do to keep himself busy ?

Still got Super Rugby Pacific, Currie Cup, Summer Tours, NPC, Rugby Championship (all until 2025) and Lions tours on Sky with Major League Rugby (Rugby Network), Rugby Europe Championship (Rugby Europe Website), Autumn Internationals (Prime) as thing stand + this new planned all singing, all dancing international competition from 2026.

Could see one rugby streaming service from 2025 onwards picking up 99% of the competitions etc. Sky may want to keep the Lions.

[The Doc]

Rumours about that BT wont be the Premiership broadcaster after their current agreement ends in 2024.
I wonder do CVC have a cunning plan for both of the leagues?

Isn't the rumour that CVC are looking to package all the rights (Premiership, URC, 6N) - meaning the rights holder would be THE rugby channel

Viaplay aka Premier have the URC till 2025, BT Sport have the Premiership and Heineken Cup till 2024, 6N rights in UK/Ireland locked up to 2025.

I know. The speculation was that they were going to allign them all... A one year extension would bring them all into line

Sent from my LE2123 using Tapatalk