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Saracens kicks American stake sale talks into touch

Written by on 29/01/2021

The owner of Saracens, the Championship rugby team, has kicked talks with a prospective American backer into touch amid renewed confidence in the club’s long-term financial prospects.

Sky News has learnt that Nigel Wray, who has been an investor in Saracens since 1995, halted discussions this week with executives at MSD Capital, the private investment firm set up by the computing tycoon Michael Dell.

Mr Wray, who stepped down as the club’s chairman last year after its salary cap scandal, had been exploring the sale of a minority stake to raise funds for investment in projects including the ongoing redevelopment of its stadium.

Saracens' chairman Nigel Wray after the European Champions Cup Final at BT Murrayfield, Edinburgh 13/5/2017
Image: Saracens’ former chairman Nigel Wray

Sources close to the situation said that a new multimillion pound sponsorship deal struck this month had instilled renewed belief in Mr Wray and his daughter – the club’s chief executive – about Saracens’ commercial appeal.

The family is said to be open-minded about a longer-term sale of equity, but – a source close to them said on Friday – that would now take place against a more attractive backdrop for the valuation of sports assets, which have been hit by the COVID-19 crisis.

Saracens, which will kick off its bid to regain Premiership status in March, were relegated after being found guilty of persistently breaching rules relating to players’ remuneration.

The scandal – which resulted in a £5m fine and 35 Premiership points deduction – triggered uproar from rivals and Mr Wray’s resignation as chairman.

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The property tycoon took full ownership of Saracens in 2018 after buying back a 50% stake which had been sold to Remgro, a South African company.

He has overseen the most successful period in the club’s history, winning three European Champions Cups in the last five years and the Premiership five times over the course of a decade.

Mr Wray’s wealth helped Saracens attract players such as the England captain Owen Farrell and international team-mate Maro Itoje.

In a sign of returning corporate confidence in Saracens, it confirmed recently that it had signed up the American owner of City Index in a record-breaking sponsorship deal.

Allianz, the German insurer, terminated its long-running association with the club after the emergence of the salary cap crisis.

Saracens has remained a shareholder in Premiership Rugby Limited despite its relegation.

Like other elite leagues and sport governing bodies, Premiership Rugby, which is backed by the private equity firm CVC Capital Partners, has seen its financial assumptions hit by the pandemic.

There remains chronic uncertainty about the timing and status of myriad international sporting events this year, despite the widening distribution of coronavirus vaccines.

That uncertainty is driving an investment frenzy into elite sports, including in rugby.

Earlier this month, Sky News revealed that Silver Lake, the US-based buyout firm, was in advanced talks to take a stake in the New Zealand All Blacks’ commercial rights arm.

A £365m deal for CVC Capital Partners to buy a stake in the Six Nations Championship is expected to be announced next week.

Saracens declined to comment on Friday.

 Sky News

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