FILE PHOTO: Rugby Union - Rugby World Cup Tournament Opening Press Conference - Roland Garros, Paris, France - September 4, 2023 World Rugby CEO, Alan Gilpin during the press conference REUTERS/Sarah Meyssonnier/File Photo
LONDON (Reuters) - Rugby union’s governing body World Rugby has revived talks to raise funds for growing the sport in the United States, three people familiar with the matter said.
Dublin-based WR, led by CEO Alan Gilpin, could use the funds raised to invest in the U.S. by creating a new league or investing in existing ones, the people said.
The governing body first explored options in 2021 including selling a stake in the World Cup’s commercial rights that would be used to fund other areas of the sport, Sky News reported at the time, but a deal never materialised.
The revival of talks would be a test of appetite for the sport in the U.S. as it builds towards hosting the 2031 men's World Cup and 2033 women's World Cup.
The quadrennial men's tournament was last year won by South Africa in France and is next scheduled to take place in Australia in 2027. It is by far the biggest generator of funds for the sport which turned professional in 1995.
France 2023 generated a 475 million-pound ($622 million)surplus for reinvestment in the game, with 300 million pounds directly invested into unions and regions, WR said.
Australia 2027 is projected to generate 550 million pounds and the 2031 event, the first Rugby World Cup held in the U.S., is projected to earn 770 million pounds, not taking into account the current investment process.
The sources, who spoke on condition of anonymity, cautioned that discussions are ongoing and may not lead to a transaction.
Private equity firms Providence and KKR have held talks about participating in the process, which is being handled by bankers at Jefferies, two of the people said.
The group is considering raising the funds by issuing debt, one source said.
Jefferies did not immediately respond to a request for comment. Providence and KKR declined to comment.
GROWTH PLAN
A WR spokesman said the organisation was exploring opportunities to fund a U.S. growth plan, aimed at accelerating rugby’s growth in the country in the run-up to and beyond hosting Rugby World Cups in 2031 and 2033.
"WR has engaged a global financial services leader to test the market and identify potential commercial partners and investors with the relevant expertise to help achieve key growth goals," the spokesman said.
"A formal go-to-market strategy launched in early 2024 is attracting enormous interest. As a result, WR is currently in conversation with a number of interested parties who share our growth vision. Conversations continue to be exploratory, and no formal offers have been made or accepted."
Funds raised would be used to develop the sport in the U.S., which has been a long-term target for WR as part of its attempt to expand interest beyond the relatively limited traditional strongholds of the sport.
WR has held discussions with governing body USA Rugby and Major League Rugby (MLR) about the optimum way to fund that growth, which could involve creating a new league or boosting the existing MLR set-up, sources said.
Founded in 2017, MLR is a professional league in North America comprising 12 teams, featuring 11 from the US and one from Canada.
Any agreement would have be presented to World Rugby’s 132 national member federations for a vote.
($1 = 0.7631 pounds)
(Reporting by Amy-Jo Crowley and Mitch Phillips, editing by Ed Osmond)
