Provincial rugby unions gave their blessing yesterday to a controversial deal to allow a private equity firm to buy into New Zealand Rugby.
The deal would allow global technology investment firm Silver Lake to take a 12.5 per cent stake in New Zealand Rugby's commercial interests - netting the national body $387.5m.
The deal can't proceed without the approval of the New Zealand Rugby Players' Association.
Photo: timhester/123RF
Craig Calder, chief executive of the South Canterbury Rugby Union and Rowena Davenport, chairperson of the Otago Rugby Football Union, joined Kathryn Ryan to explain why the deal got the backing of provincial unions.
Calder says the decision made yesterday was very clean cut, unanimous and without an ambiguity or questions.
“In fact, we had a summary session after lunch and the PUs [provincial unions] just see this as the way to go and it’s the only way we’re going to get out of the deficit position we’re in at the moment.”
He says a fact that’s been buried is that New Zealand Rugby Union will still run the game, own the game, and still be responsible in the games that are played.
“This is a commercial arm that’s been set up, called ComCo [Commercial LP], of which Silver Lake is 12.5 percent shareholder. ComCo is about exporting or growing the revenue base for New Zealand Rugby and the All Blacks brand, the Black Ferns brand and NZ Māori.
“It’s not true that the All Blacks are going to be eroded and the haka’s going to be touched and all that sort of carry-on. This is a commercial equity deal and it’s really laser-focussed on commercially growing this game.”
Silver Lake also owns a shareholding in UFC and the Manchester City FC and Calder says this deal isn’t much different.
“[UFC] is a growing sport, where was that sport five years ago? Look what they’ve done to that. It’s about improving the customer experience – the experience of the fans of the All Blacks and New Zealand rugby.”
Calder says Silver Lake comes at sport from a tech perspective and they, for instance, will be able to provide tech for All Blacks or provincial fans that breaks down statistics and so on.
He says that, once the agreement is signed, all clubs – including university clubs – will get a sizable cash injection and further ongoing support from New Zealand Rugby.
“That’s amazing. I’ve got clubs in my area where the roof is leaking and they have no money to fix it. We’ve increased girls’ rugby playing by 44 percent but, when they go along to play, they can’t get changed because there’s no changing sheds. They can’t have a shower. We’re at a critical place and we need this funding.”
Additional, a ‘legacy fund’ will be held a trust which provincial unions can apply to if they need funding for projects such as sheds.
“It may be as simple as needing pads around their posts, they can apply to the legacy fund and that’s administered by a separate trust. That’ll take to build but it will build and build and build over the years.”
Rowena Davenport says it wasn’t a quick decision for the Otago Rugby Football Union to get on board.
“It’s a big and complex undertaking so New Zealand Rugby ran a really great process that involved all the provincial unions very early on, and other stakeholders too, so we had a lot of opportunities to ask questions.”
Reservations Davenport heard included things like the deal being rushed but she says the provincial unions didn’t feel like that was the case.
“With any investment deal, there is risk. You can’t eliminate those risks, but there is understanding of those risks and plenty of mitigants in place that we were comfortable the reward was worth taking the risk.”
Davenport says it could be a watershed moment for the game.
"I'm very excited about this and what it might mean for community rugby."
