Wellington (AFP) - New Zealand Rugby secured a lucrative but controversial investment Thursday from US private equity firm Silver Lake after allaying fears from the players' union that the deal risked tarnishing the famed All Blacks' legacy.
The partnership will see Silver Lake put NZ$200 million ($134 million) into a joint commercial entity, which will remain majority-owned by New Zealand Rugby.
Institutional investors will be given the opportunity to purchase a further NZ$100 million stake later this year, although New Zealand Rugby will retain ownership of around 90 percent.
New Zealand Rugby described the deal as "transformational" for the cash-strapped body, ensuring financial stability and providing money for priorities such as women's and grassroots rugby.
"This partnership presents rugby with an extraordinary opportunity to secure its future and unleash its true potential -- we are truly excited by what we can achieve together with Silver Lake's world-class capabilities," New Zealand Rugby chief Mark Robinson said.
It follows almost two years of sometimes acrimonious negotiations when the New Zealand Rugby Players' Association threatened to veto the deal.
NZRPA chairman David Kirk, who last year told AFP he feared the investment would result in the All Blacks being sold out to commercial interests, said he now supported the partnership.
"The agreement provides capital on a sound economic basis," he said.
New Zealand Rugby chairman Stewart Mitchell acknowledged the tensions but was satisfied his organisation had met its responsibilities as "guardians of the game".
"The journey to get here hasn't been easy at times, there was healthy debate and some adjustments by all parties but always with the good of the game at the heart of this process," he said.
Under the deal, Silver Lake gains a stake in NZR's commercial rights and will provide expertise on expanding the All Blacks' digital footprint to generate revenue from the three-time world champions' global fan base.
"Digital technologies are transforming all sports, and we look forward to bringing our global network and resources to help New Zealand rugby drive innovation and take advantage of all the opportunities ahead," Silver Lake managing director Stephen Evans said.
Attractive investment
The deal values New Zealand Rugby's commercial interests at a whopping NZ$3.5 billion.
Silver Lake originally sought a 12.5 percent stake in the commercial entity but the players' union were concerned it would give the firm too much power.
The focus for the Americans is the All Blacks, recognised globally as the benchmark in rugby union and well known even by casual fans for their fearsome pre-match haka challenge.
New Zealand Rugby posted a NZ$34.6 million loss in 2020, with the bottom line hit hard by the coronavirus pandemic.
The governing body typically operates in the red, relying on a windfall every 12 years from tours by the British and Irish Lions, who last visited in 2017.
California-based Silver Lake, which started out as a technology investment vehicle, has moved into sport recently, taking a 10 percent stake 18 months ago in City Football Group, owners of English Premier League giants Manchester City.
Rugby union, with its wealthy fan base, has proved an attractive investment opportunity for private equity, with CVC Capital Partners taking stakes in England's Premiership, the Pro14 provincial competition and the Six Nations tournament.
Rugby Australia has also indicated it is looking for an injection of private equity cash.
