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Birmingham City’s owner, Knighthead Capital Management, is among a number of American investors exploring the purchase of potential new franchises in Prem Rugby before a radical shake-up of the sport due to be ratified by the Rugby Football Union on Friday.
The RFU council will vote at Twickenham on proposals to ringfence the 10-team Prem with no promotion or relegation until 2030, when a staged expansion is planned, beginning with the addition of two more teams.
While former top-flight sides such as London Irish, Wasps and Worcester Warriors as well as ambitious Champ clubs like Ealing Trailfinders will be given the opportunity to apply, Prem Rugby is also keen to secure new additions. New York-based merchant bank, The Raine Group, and Deloitte have been engaged with a brief to discuss franchise opportunities with potential new owners, as well as bringing new investment into Prem Rugby itself.
Knighthead is understood to have expressed interest in acquiring a franchise as the next stage of its multisport strategy that has seen it buy a 49% share in the Birmingham Phoenix Hundred franchise, and a majority share in Netball Super League club Birmingham Panthers.
While discussions are at an early stage, Knighthead is attracted by the prospect of expanding its reach, according to rugby sources, who are also convinced there is a gap for the sport in the West Midlands, which has lacked a professional team since the Coventry-based Wasps went into administration in 2022 and were liquidated.
Knighthead bought Birmingham City in 2023 before investing in cricket and netball last year, and has committed to spending between £2bn and £3bn on building a new “Sports Quarter” for the city, which will include a 62,000-seat stadium and 15,000-capacity indoor arena.
There is also scope within its plans to build a smaller 10,000-seat stadium for Birmingham City’s women team, which could also be used for rugby.
The city has a significant rugby heritage in the form of Birmingham Moseley Rugby Club, which is 153 years old and were a founder member of the first top-flight league when they joined Courage National I in 1987, but were relegated four years later and are now in the third tier.
The vote on adopting a franchise model is expected to be passed despite vocal opposition from clubs in the second-tier Champ, as the RFU Council endorsed “the rationale and the need for change” at its last meeting in October.
Future expansion of the Prem would be managed by an open tender process similar to the points-based licensing system used in rugby league, while aspiring franchise holders would also have to pay to join by buying a so-called “P share”, which are valued at about £12m.
Knighthead has two years to decide whether it wishes to join the tender process, as clubs will be invited to issue an expression of interest to join in 2030 two years earlier.
