CVC Capital Partners and Haveli Investments bought Jagex in February 2024 in a deal reported at about $1.1 billion, and since then we’ve had two price hikes in under two years, a 65% increase on the annual sub, the 6-month tier removed, and grandfathered rates tightened. Everyone’s focused on the prices themselves but I wanted to understand who’s actually behind these decisions and what their track record looks like, so I started pulling on threads. The chairman of Jagex is Marc Allera, appointed in March 2024 right after the deal was announced. He also chairs CVC’s Global Sport Group, a $14 billion platform holding their stakes in LaLiga, Ligue 1, Six Nations, Premiership Rugby, and WTA tennis. The Jagex deal was led by CVC’s Sports, Media and Entertainment team, not a gaming team. They ended up in charge of a game studio because CVC sees RuneScape as a fan engagement business with recurring revenue. The Haveli side is where it gets really interesting though. Haveli was founded by Brian Sheth, a billionaire who joined Vista Equity Partners at its founding in 2000 and eventually became its president for about a decade. If you haven’t heard of Vista, they’re basically famous in the tech industry for having a secret 100+ point operating manual for extracting maximum profit from software companies with locked-in users. They specifically look for high retention, recurring revenue, and products people can’t easily walk away from, and then they systematically optimize pricing, restructure contracts, and cut costs until margins are as high as possible. Sheth left Vista, started Haveli, raised a dedicated $833 million gaming fund, and Jagex is their largest gaming investment. Can’t be sure they’re running Vista’s playbook on Jagex specifically, but the pattern of changes since the acquisition fits it pretty closely. CVC also has history with this kind of thing. They bought The AA jointly with Permira back in 2004 and in 2006 a Labour MP tabled a motion in the House of Commons accusing them of “greed and blatant asset stripping” for borrowing £500 million against the AA’s own assets to pay themselves a dividend. The AA eventually went public, stock peaked at 416p, then collapsed to 35p over the following years. A 91% drop, with the heavy debt loaded on during PE ownership cited as a major factor. British membership company, loyal subscriber base, piled with acquisition debt from a leveraged buyout. The structure is pretty similar to what we’re looking at with Jagex now. CVC isn’t exactly in a strong position across their wider portfolio either. They tried to sell equity in their sports portfolio at 9 billion euros and buyers passed, so they ended up doing a financing deal that valued it at 7 billion instead. Their French football investment has been a mess with their Paris offices raided as part of a corruption investigation into broadcasting rights. Three Premiership Rugby clubs went bust during their investment period. A senior CVC managing partner is under a tax fraud investigation in Spain tied to a hospital sale. And their share price has lost over half its value since peaking in late 2024, dropping another 7% after their March 11 earnings report. Hard not to wonder what that kind of pressure across the portfolio means for the companies that are actually performing. Tl;dr: Jagex is being run by a sports media rights team with an underperforming portfolio, the chairman has no gaming background, and the co-buyer built his career on a playbook for squeezing subscribers. That’s the context for your price hike. submitted by /u/PossessionDangerous9
Originally posted by u/PossessionDangerous9 on r/2007scape