New Zealand Rugby will sign a trade agreement with Silver Lake

New Zealand Rugby has been approved to sign a landmark deal with California-based private equity firm Silver Lake that will bring in cash, but some observers fear a “special bond” between New Zealand and their national team, the All Blacks, could be threatened. .

NZR Chairman Stuart Mitchell described it as a “memorable moment” for the sport.

Silver Lake will provide about $ 180 million for a portion of NZR’s 5-8 percent of future commercial revenue, which it promises to use to enhance its efficiency.

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NZR will use the money to improve players’ salaries, support grassroots rugby, and finance its own victims of the COVID-19 epidemic.

At a special general meeting of the NZR on Thursday, delegates voted 89-1 to support the deal due to initial opposition from the Rugby Players Association, which took almost two years to come to fruition.

The RPA urged sports administrators to consider alternative investment sources, including a share float that would allow small New Zealand investors to receive a share of all blacks.

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About $ 33 million will be distributed as soon as the agreement is signed: $ 900,000 for each of New Zealand’s top tier provinces, $ 450,000 for lower tier provinces, মা 1.8 million for Mওori rugby, $ 6.7 million for clubs and $ 4.5 million for players’ associations.

NZR will also seek between-56-90 million from New Zealand institutional investors, and Silver Lake will have the option to increase its investment if it is not raised.

The Silver Lake Agreement would see the establishment of a new entity known as CommLP, which would hold all of NZR’s commercial assets and hold a minority stake in Silver Lake.

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This would give US agencies between 5.7-8.6 percent of revenue from broadcasting rights, ticket sales, merchandising and other commercial activities.

Silver Lake will hold 85 percent of the global rugby opportunity, a newly formed entity accused of exploring new “rugby-related opportunities” for New Zealand rugby.

An independent report commissioned by the PWC for the provincial unions and leaked to the media ahead of Thursday’s meeting warns of possible damages to the Silver Lake Agreement.

The report warns that once the agreement is signed, “Geneti will go out of the bottle” and NZR will not be able to return to its previous commercial structure unless it is able to buy back the Silver Lake partnership.

The report states that early cash injections will help fund NZRs at a time when participation and visitor numbers are declining.

It will also allow NZR to explore business opportunities abroad with less risk.

But PwC warns that CommLP will need to raise revenue by about 8 percent each year to offset part of Silver Lake’s revenue, which previously went directly to the NZR.

PwC said “the acquisition of new business ventures remains uncertain” but added that they would be “more achievable with Silver Lake as a partner.”

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