Stakeholders at the body that runs New Zealand’s legendary All Blacks have voted to sell a 12.5% stake in its trading rights to an American private equity firm despite opposition from the powerful players’ association rugby.
The Pacific nation’s 26 provincial rugby unions voted unanimously on Thursday to support a proposed NZ $ 387.5 million (US $ 281 million) investment in rugby in New Zealand. by Silver Lake, a $ 75 billion California buyout known for betting on tech groups.
The contentious decision paved the way for high-stakes negotiations between the game’s administrators and the New Zealand Rugby Players Association, whose approval is required for the private equity transaction to proceed.
The deal, if approved by the association, would launch a battle for influence in one of the world’s most popular sports between Silver Lake and its rival. CVC Capital Partners at a time when the Covid-19 pandemic has shattered the revenue stream of rugby.
Luxembourg-based CVC already holds minority stakes in the English Premiership, Pro14 club competitions and the Six Nations. He also had talks with South Africa, the reigning world champions, on the purchase of a 15 to 20 percent stake in the commercial branch of sport in the country.
“What you just did was incredibly meaningful,” said Brent Impey, president of New Zealand Rugby at the organization’s annual meeting after the vote.
“The game has to change, and Silver Lake’s capital injection would allow us to reinvent rugby and invest in the areas of community play that need it most, particularly teenage and women’s rugby.
New Zealand rugby suffered a loss of NZ $ 34.6 million in 2020 on a drop in its revenues of NZ $ 55 million caused by the coronavirus pandemic, which has disturbed lights.
Under the draft deal, dubbed “Project Future” by its promoters, Silver Lake would pay NZ $ 387.5 million for a 12.5% stake in a company holding the business interests of New Zealand Rugby, including including the All Blacks, one of the most famous brands in world sport.
The deal would value New Zealand Rugby’s business interests at over NZ $ 3 billion and allow it to channel NZ $ 39 million to stakeholders, including provincial unions who voted for the deal. .
New Zealand Rugby said the deal will transform the game and provide investment in grassroots rugby, technology and other initiatives that will grow the sport.
Basically, it would also provide more money to retain talented local players, who are increasingly targeted by European and Japanese clubs, according to supporters of the deal.
But Silver Lake’s proposal proved controversial. Critics have warned he risks repeating mistakes that have rocked football, where elite clubs have attempted to establish a European Super League breakaway.
In January, the players’ association told New Zealand Rugby that it would not approve the agreement due to concerns over the loss of control and threats to the financial viability and cultural values of rugby in New Zealand.
“There is an inherent risk of real or perceived cultural misappropriation given that Silver Lake is an Anglo-American private equity firm,” said the letter, viewed by the Financial Times.
Silver Lake, which also has a stake in Manchester City Football Club, sought to allay the fears of players and fans of over-marketing the sport. He highlighted the structure of the deal, in which the business enterprise would still be majority owned and controlled by New Zealand Rugby.
But several mediation sessions between the board of directors and the players’ association failed to agree on Silver Lake’s offer.
Rob Nichol, chief executive of the players’ association, told the FT that mediation efforts were on hold while the body consulted with its members.