Photo: RNZ
The New Zealand Rugby Players Association (NZRPA) had suggested two alternative funding models to New Zealand Rugby (NZR), instead of the proposed Silver Lake deal which it said carried a very high level of financial risk .
The Silver Lake deal would give the equity firm a 12.5 per cent stake in a newly created NZR entity called Commercial LP for $387.5m, which would control NZR s commercial interests, including merchandising and ticketing. The numbers don t add up to make New Zealand Rugby profitable at least until 2025 and if you want to believe it is profitable after that you have to believe that 100 percent of the growth initiatives that Silver Lake and New Zealand Rugby believe are coming through do come through, Kirk told
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“Between us, we need to resolve what the collective will look like beyond this year in order for the players to respond to NZR’s request for approval of the proposed Silver Lake transaction.” In a statement, outgoing NZR chairman Brent Impey said it was “disappointing” the NZRPA hadn’t yet come to the party “Through swift action, good governance and hard work of our people we are fortunate to be one of the best placed national unions in the world. However, we are at a critical juncture and need our players’ support if we are to make the most of the opportunity in front of us.“
Make no mistake, Silver Lake is in this to make serious money. It’s understood NZ Rugby will pay Silver Lake 12.5 per cent of revenue from commercial operations after three years, starting from 3.5 after the first year and 7 following the second. NZ Rugby rakes in just under $200m a year in revenue. Silver Lake, if it can help NZ Rugby raise that amount, will therefore get a bigger slice of the pie.
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NZ Rugby Players’ Association boss Rob Nichol was deep in mediation with NZ Rugby until last week, when talks were called off. So there is potential for it to make tens of millions of dollars, especially if the deal lasts up to 10 years. NZ Rugby, of course, will also benefit. Providing everything goes to plan.