On Monday, Coventry City owner Joy Seppala claimed that Premiership rugby clubs had “topped out” and reached their full potential, in reference to Wasps, who she believes want to buy her League One side.
But Tuesday’s news that Leicester Tigers have launched a formal sale process following a string of interested investors, shows a clear refusal to buy into that thinking.
The investment from CVC Capital Partners for a 27 per cent stake in Premiership Rugby – providing around £13m per team – last December has “created an attractive environment for investment at club level”, Tigers claim, as the sport continues to expand its commercial reach.
“The CVC deal that was announced has obviously changed the landscape of the game,” Tigers chairman, Peter Tom, tells City A.M. “Over the past six months we have had interest from several individuals or groups.”
As such the Leicester board have made the decision to undertake a strategic review of the club, including the implementation of a formal sale process, which will be led by financial advisers Zeus Capital.
It comes after the worst season in the club’s history: 2018-19 was the first time the Tigers did not finish in the top six since the game turned professional, as the 10-time Premiership winners were embroiled in a relegation scrap, finishing 11th.
But despite those difficulties, they have sold more than 11,000 season tickets for next season, with 90 per cent renewing, and produced around £20m in revenue thanks to CVC’s money, meaning they have no debt.
“We’ve had three or four not good seasons, one awful season, and we’ve had a full review of what’s gone wrong and put in place a series of changes,” Tom explains. “I think you can tell from the signings we’ve made that we are heading in the right direction.”
Another significant change looks set to be made to the club’s ownership, which is currently comprised of around 10,000 shareholders, including Tom, who has a nine per cent stake in the club and is open to selling it.
“I’ve been chairman for a long time,” the 78-year-old says. “We are custodians of the club. It’s about the long-term transition and if it’s in the club’s best interest [for me] to stay or go then that’s what I will do, it’s all about the future of the club.”
The other shareholders include businessman Tom Scott, who owns around 46 per cent of the Tigers, and a large number of supporters who own around 250 to 300 shares each.
They were all notified of the club’s intentions on Tuesday, to a mixed reception, although any talks are still at a preliminary stage.
While the Tigers are keen to highlight that no sale may arise, Tom stated they are “looking to have a resolution to this over the next six months.”
When asked about the club’s value, the former-player-turned-chairman added: “It’s been reported at around £60m, based on football calculations of three times revenue, but what’s most important for us is how much the investor would look after the club and its values.”
The Tigers are the first club to make such a move following the investment from CVC and it is the latest sign, following a string of investment bids across rugby union, to suggest the sport has plenty of potential left in yet.