While executive changes and high-profile events grab headlines, Andrew and Nicola Forrest's well-established private investment firm, Tattarang, continues its strategic moves.
According to sources in the know, Tattarang, led by John Hartman, is now in the final stages of negotiations to become the new investor in Rugby Australia. These formal discussions, which commenced last week, follow a pivotal one-on-one meeting between Hartman and Rugby Australia's CEO, Hamish McLennan, held at Tattarang's waterfront offices in Perth in late August. Reportedly, McLennan is seeking exclusivity in this potential deal.
Rugby Australia, advised by Jefferies, has been on the lookout for a substantial $250 million injection of growth capital, with an estimated valuation of around $2 billion. Tattarang faces competition from global buyout giant CVC Capital Partners, which has been actively involved in sports-related mergers and acquisitions, such as investments in La Liga and Silver Lake, the private equity firm that infused $200 million into Rugby New Zealand in 2022.
Rugby Australia has been enticing potential investors with promises of returns stemming from broadcasting and streaming rights, merchandise sales, and ticket revenue, according to McLennan.
Andrew Forrest's inclination toward supporting local businesses and brands is no secret. He previously funded the Western Force rugby team in Perth, demonstrating his willingness to back underdogs. Additionally, Forrest has significantly boosted the earnings of Australian boot maker and saddler RM Williams, increasing its profitability to $45 million since his investment three years ago.
Despite a $4.5 million operating loss in 2021, with revenue reaching $98.6 million (an improvement from a $27 million operating loss in 2020), Rugby Australia managed to turn a profit of $8.2 million in 2022, with revenue totaling $129.2 million. McLennan remains optimistic that Rugby Australia can capitalise on the sport's "golden decade" to drive revenue growth and return to profitability.
Last month, Rugby Australia unveiled a major restructuring plan, granting it greater control over key management decisions, coaching appointments, and talent-related matters at the country's five Super Rugby clubs: the NSW Waratahs, Queensland Reds, Canberra Brumbies, Melbourne Rebels, and Western Force. This restructuring is set to be the most significant in Australian rugby union history.
Rugby Australia also secured a substantial $100 million, three-year broadcast rights agreement with Nine Entertainment in November 2020. Moreover, the organisation is gearing up for participation in the upcoming men's Rugby World Cup, set to kick off in France later this week.