WELLINGTON, New Zealand -- New Zealand Rugby will move ahead with a plan to sell a 12.5% stake in its commercial rights, mainly the All Blacks, to U.S. investors after winning the support of provinces at its annual meeting Thursday.
New Zealand’s 26 provincial unions voted unanimously in favor of the proposal to sell the stake to California-based Silver Lake Partners for 387.5 million New Zealand dollars ($279.2 million), valuing the rights at NZ$3.1 billion ($2.2 billion).
The only remaining obstacle to the private equity deal is the New Zealand Rugby Players’ Association. The union representing professional players has expressed concern about several aspects of the sale, including the possible commercialization of traditional and cultural symbols such as the silver fern and All Blacks’ haka.
Talks between the player union and New Zealand Rugby, conducted with a mediators, have not so far allayed those concerns.
New Zealand's Sports Minister and Deputy Prime Minister Grant Robertson urged the players to continue talks.
“New Zealand Rugby has been working hard on it, trying to establish what it believes is a more secure financial base for the sport,” Robertson said. “Some of the details that are now emerging show the provincial unions will be getting some slice of the extra money that might be coming in, but other details are still a little bit unclear.
“And obviously on the other side of the equation you’ve got the Rugby Players’ Association who are concerned about both the salaries that the players get but also some other issues like protection of cultural icons such as the haka.”
The Silver Lake deal will represent a more momentous change for the All Blacks than rugby’s move to professionalism in 1995. For the first time the New Zealand national team — known as the All Blacks since 1905 and the most successful team in world rugby — will not wholly belong to New Zealanders.
NZR chairman Brent Impey said the Silver Lake deal represented a major turning point for rugby in New Zealand, though fans won't notice any changes once the deal goes through. He told the provinces “what you just did was incredibly significant.”
“The game has to change and Silver Lake’s capital injection would allow us to re-imagine rugby and invest in the areas of the community game that need it most, particularly teenage and women’s rugby and to create better and more engaging experiences for our fans," Impey said.
“We hope the NZRPA will realize the significance of the opportunity in front of us and will continue to work toward an agreement in coming weeks.”
The players and other critics fear the outside investment will substantially change the way in which the All Blacks operate and will effect the team's relationship with fans. They argue NZR will have to continue funding rugby at all levels but with only 87.5% of its previous commercial income.
NZR chief executive Mark Robinson said “we believe this will benefit everyone in the game.” He refuted suggestions the deal would see the history and tradition of the All Blacks sold to “faceless billionaires.”
“The people we’ve been working with (at Silver Lake) have a strong connection to (rugby), they grew up playing the game,” Robinson said. “They’ve spent time with former All Blacks on Zoom and have been frankly like excited kids meeting people like that, enjoying time with them and getting a better sense of what it means to be an All Black and a Black Fern and the importance of the legacies of the game in our country.”
“They’ve invested a huge amount of time in trying to understand as best they can what the game means to us and trying to get inside the DNA of the game.”
Under the deal, New Zealand Rugby will bundle its commercial assets in a new organization called Commercial LP in which Silver Lake will hold a 12.5% share. That share will give Silver Lake a role in decision making around where, when and who the All Blacks play and in other matters relating to the team.
NZR says the deal is necessary to ensure the future financial sustainability of the sport in New Zealand at all levels. The annual meeting heard NZR lost NZ$34 million ($24.7 million) last year and its revenues fell 26%, mainly due to the coronavirus pandemic. It plans to establish a “legacy fund” to ensure grassroots rugby remains financially sustainable.
Provincial unions are cash-strapped after last year’s pandemic disruption and are attracted to the deal by the promise of an immediate NZ$39 million ($28 million) cash distribution from NZR.
Silver Lake Partners was formed in 1999 and has focused mainly on investment in the technology sector and has holdings worth $79 billion in companies such as Airbnb, Twitter and Dell Technologies. It also holds a stake in City Football Group, which owns the English Premier League club Manchester City.
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