New Zealand Rugby has moved a step closer to selling a stake in the game after the nation’s provincial unions voted unanimously to give the green light to a huge deal with a US investment firm.
The 26 unions and the Māori Rugby Board voted to sell a 12.5% stake to the private equity firm Silver Lake that would bring a cash injection of $NZ387m to NZR, which posted a NZ$18.7m operating loss at its AGM on Thursday.
It brings into sharp focus the prospect of the All Blacks becoming a non-wholly publicly owned entity for the first time in the team’s 115-year history.
The deal, which values NZR’s commercial rights at $2.23bn, is yet to be ratified and needs the approval of the players’ union for it to go ahead.
NZR said it would continue discussions over the coming weeks with the New Zealand Rugby Players’ Association, which is holding out on the deal over a range of issues.
Several high-profile players, including All Blacks captain Sam Cane, have raised fears about the commercialisation of sacred team symbols – including the haka – and increased demand to play exhibition games for money and brand exposure.
NZR chair Brent Impey said the “game has to change” and that the support of the players was crucial.
“The players are a critical part of this journey, but we have to look at what is right across all levels of the game, our whole ecosystem,” Impey said. “We hope the NZRPA will realise the significance of the opportunity in front of us and will continue to work toward an agreement in coming weeks.”
Should the deal be rubber stamped, a large portion of the money would be funnelled into grassroots rugby, which has suffered from falling participation numbers at the community level.
The drop in participation has been in part due to the Covid-19 pandemic, which has also affected NZR’s bottom line. The operating loss blew out from the $5m budgeted pre-Covid to NZ$34.6m, which included a NZ$16m writedown of Sky Television shares created.
“New Zealand Rugby needs investment,” Auckland University of Technology senior lecturer Richard Wright told Radio NZ. “Why? Because other people are not investing as much in rugby as much as they used to do, and that includes New Zealanders.”
Silver Lake has a portfolio of stakes in sporting clubs around the world; the UFC, the Premier League’s Manchester City, A-League’s Melbourne City and the NBA’s New York Knicks included.
“They’re investment bankers. They would have done their due diligence. They’re not mugs,” Wright said. “The All Blacks played six times last year. The most they might play this year is 15 times. To get that return on investment, they’re going to want to see the All Blacks playing and the ABs brand as much as possible.”
The prime minister, Jacinda Ardern, would not say whether she supported the deal, saying it was NZR’s decision.
“The offer that has been made there with the negotiation that is under way, it is not something that directly involves the New Zealand government,” she said.
Sports minister Grant Robertson said: “I just encourage both parties to continue talking because for the good of the game we need our elite players to be well looked after, happy to be playing here, and carrying on supporting the next generation coming though.”