Advanced talks are underway between English rugby union’s top teams, including the league leaders Bath, Saracens, and Harlequins, along with private equity backer CVC Capital Partners, to provide a multimillion-pound loan to Newcastle Falcons. The loan is intended to help the struggling club meet financial criteria required to play next season in the Premiership.
Newcastle Falcons, currently at the bottom of the league table, with just two wins out of 11 matches, requires additional funding to pass the tests set by the league’s Financial Monitoring Panel. This situation arises following the financial collapse of other clubs like Worcester, Wasps, and London Irish in recent years, reducing the Premiership to just ten teams.
The proposed loan, expected to be around £4m, is subject to approval by the Department for Culture, Media and Sport, and is aimed at ensuring the club’s survival and enabling it to continue competing. The size of the loan may vary between £4m to £5m and the clubs are keen to ensure it’s treated on the same terms as the emergency funding provided to the sport by the government during the pandemic.
CVC, which acquired a stake in Premiership Rugby in 2019, has significantly boosted the league’s broadcast audiences, attendances, and sponsorship revenues. The talks for the loan coincide with negotiations for a new broadcast rights deal for Premiership Rugby, indicating a positive commercial outlook for the sport.
Newcastle Falcons’ owner, Semore Kurdi, has put the club up for sale and several parties, including family offices, have shown interest in acquiring it. Despite efforts to reduce costs, the club remains lossmaking, underspending on player wages as per the league’s salary cap regulations.
While CVC, Newcastle Falcons, and DCMS declined to comment on the ongoing discussions, the rugby community remains hopeful for a resolution that would secure the club’s future in the league.