Details of Silver Lake's buy-in of New Zealand Rugby revealed

Author
RNZ ,
Publish Date
Wed, 28 Apr 2021, 11:34AM
NZ Rugby chief executive Mark Robinson (Photo / Photosport)
NZ Rugby chief executive Mark Robinson (Photo / Photosport)

Details of Silver Lake's buy-in of New Zealand Rugby revealed

Author
RNZ ,
Publish Date
Wed, 28 Apr 2021, 11:34AM

By RNZ

New Zealand Rugby has confirmed the sale price for the buy in of US tech giant Silver Lake to the game here.

In papers released for tomorrow's AGM which will be asked to approve the deal, Silver Lake will get a 12.5 percent stake in a new entity called Commercial LP for $387 and half million.

The new entity will control NZR's commercial interests.

Up to $43.75 million of the sale price will be committed to working capital for Commercial LP, along with a proportionate contribution from Silver Lake.

The document said $39m will be distributed to stakeholders, such as provincial unions.

A legacy fund will be established to ensure the sustainability of rugby at all levels.

More than nine months in the making, the deal must receive backing from more than 50 percent of the country's provincial rugby unions at the AGM along with the approval of the New Zealand Rugby Players Association.

A California-based private equity firm, in 2019 Silver Lake acquired a 10 percent stake in City Football Group (CFG), which owns English Premier League side Manchester City and teams in the United States, Australia and China.

An investment in one of the most famous brands in world sport would expand the buyout giant's $US 75 billion ($NZ 104 billion) portfolio of companies, most of which are technology and sports venues and teams, according to its website.

Silver Lake was in the news last week as part of the European Super League crisis in which 12 European football clubs tried to set up an alternative competition to the Champions League, before it fell apart from public opposition.

Former New Zealand Rugby chief executive David Moffett told RNZ recently he struggled to see where the value for Silver Lake is.

He wondered if there would be meaningless exhibition games for the All Blacks and a greater stake in New Zealand Rugby will be the ultimate outcome of the deal.

"Silver Lake are not benefactors," he told RNZ's Extra Time. "They are not going to pump a whole lot of money into New Zealand Rugby without expecting a return (so) I am struggling to see how they can increase the revenue return to NZR and ultimately themselves that New Zealand Rugby haven't been able to do on their own.

"After all, they (NZR) are the biggest rugby brand in the world. They are right up there with Manchester United and some of those other great sporting brands.

"There wouldn't be a door that (chief executive Mark Robinson) couldn't open to talk about raising money... so what happens if this doesn't work out?"

All 12 of the country's minor provincial unions have come out in support of the deal.

"We believe it is time for our views to be heard because rugby for all of our players and participants starts in our communities and Heartland Rugby is all about community rugby," Heartland group chair Bridget Belsham.

"The grassroots level of the game is the cornerstone of rugby in New Zealand and we see the Silver Lake partnership with NZ Rugby vital in ensuring community rugby survives," she said.

"Rugby is facing immense challenges and investment into the community game must happen now. There are more than 150,000 rugby players in New Zealand and millions of fans.

"We believe this opportunity deserves our unconditional support and is required to secure the long term future of rugby in our country".

The final hurdle for the deal going through could be an agreement with the players.

A mediator has been called in to try and resolve a standoff between NZ Rugby (NZR) and the Players Association (NZRPA).