Silver Lake closes deal with New Zealand rugby in cash

Stakeholders of the body that runs the legendary New Zealand All Blacks have voted to sell a 12.5% ​​stake in its commercial rights to a US private equity firm despite opposition from the powerful association of rugby players.

The 26 Pacific National Rugby Unions voted unanimously on Thursday to support a $ 387.5 million (US $ 281 million) investment proposal in New Zealand rugby for Silver Lake, a $ 75 billion buying company in California known for its bets on tech groups.

The controversial decision paved the way for high-stakes negotiations between the game administrators and the New Zealand Rugby Players Association, the approval of which is necessary for the private capital transaction to proceed.

The deal, if approved by the association, would start 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 destroyed rugby’s revenue stream.

Luxembourg-based CVC already has minority stakes in the English Premier League, Pro14 club competitions and the Six Nations. He has also held talks with South Africa, the current world champions, on the purchase of a 15-20 percent stake in the commercial branch of sport in the country.

“What you just did was incredibly significant,” Brent Impey, chairman of New Zealand Rugby, said at the body’s annual meeting after the vote.

“The game needs to change and Silver Lake’s capital injection would allow us to reimagine rugby and invest in the areas of community play that need it most, particularly women’s and teen rugby.”

New Zealand rugby produced a loss of A $ 34.6 million in 2020 due to a fall of A $ 55 million in revenue caused by the coronavirus pandemic, interrupted accessories.

According to the draft agreement, dubbed the “Future Project” by its proponents, Silver Lake would pay A $ 387.5 million for a 12.5% ​​stake in a company that owned the commercial interests of Nova Rugby. Zealand, included the All Blacks, one of the most recognized brands in world sport.

The deal would value the commercial interests of New Zealand rugby for more than A $ 3 billion and allow it to allocate A $ 39 million to stakeholders, including the provincial unions that voted for the deal.

New Zealand Rugby said the deal would transform the game and provide investments for grassroots rugby, technology and other initiatives that will grow the sport.

Crucially, it would also provide more money to retain talented local players, increasingly targets of European and Japanese clubs, according to the agreement’s sponsors.

But Silver Lake’s proposal has proven controversial. Critics have warned that there is a risk of repeating the mistakes that shook football, where elite clubs tried to establish a European pro-independence superleague.

In January, the players’ association told New Zealand Rugby would not approve the deal because of concerns about 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 appropriation, as Silver Lake is an Anglo-American privately held company,” the letter said, seen by the Financial Times.

Silver Lake, that too it has a stake at the Manchester City football club, he has tried to calm the fears of players and fans of over-marketing the sport. He noted the structure of the agreement, in which the company would continue to be majority owned and controlled by New Zealand Rugby.

But several mediation sessions between the board and the players ’association have failed to reach an agreement on Silver Lake’s offer.

Rob Nichol, chief executive of the players association, told FT that mediation efforts are on hold while the body consults its members.