US equity firm Silver Lake - which is set to invest in New Zealand Rugby - does not invest in anything unless it sees profit in it, says the UK-based co-host of The Price of Football podcast, which digs into the influence of finance in the sport.
Comedian, writer and podcaster Kevin Day is a staunch fan of Crystal Palace football club. Photo: Supplied
New Zealand Rugby and Silver Lake have agreed on a deal worth up to $NZ300 million. Under the terms of the agreement, which remains subject to ratification by the Provincial Unions and Māori Rugby Board, Silver Lake will invest $200m in a new commercial entity that will control all revenue-generating assets of NZR.
Comedian, writer and podcaster Kevin Day is a staunch fan of Crystal Palace football club and self-described hopeless football romantic. He is also the co-host of The Price of Football podcast which investigates the influence of finance and 'sportswashing' in the sport, and explores the nature and depth of supporters to their local football clubs, big and small.
Chelsea Football Club is on the market after its former owner Roman Abramovich, a Russian oligarch with tight Vladimir Putin ties, threw the team up for sale in the wake of Russia's invasion of Ukraine and said he would give proceeds to war victims.
Day said Chelsea fans have been the recipients of billions of pounds of support from Roman Abramovich who has written off their debts for several years.
He said when Abramovich was first sanctioned Chelsea could not sell tickets of any sort and only those with season tickets could attend the games, nor merchandise, food or drink in the grounds, though the rules have now been slightly relaxed.
"What's happened to Chelsea is just proof that without the comfort blanket of a billionaire owner who is willing to spend a lot of money every season - the top teams aren't really able to function or survive."
Potential American buyers the Ricketts family - who own the Chicago Cubs - were in the running but eventually backed out after it was rumoured the family patriarch, Joe Ricketts, was deeply Islamaphobic.
Meanwhile, Newcastle United was recently bought by an arm of the Saudi Arabian government and there are plenty of other examples of Premier League club owners behaving badly. All of this has distanced English fans from the game, and clubs, they grew up loving.
NZ's relationship with the black jersey
Day said hearing New Zealand rugby players talking about what playing for their country represents to them is almost spiritual and the All Black shirt is iconic.
"We don't have that, most football fans here support, they want England to win, but they support their club more than they support their national side."
Day said Silver Lake would not invest without profit.
"What's happened is that the New Zealand rugby authorities are doing what most football clubs will be doing for the next five to 10 years and using the pandemic as an excuse."
He said in the UK for example many clubs that were mismanaged before the pandemic are now blaming it for their dire financial situation.
"Everton for example, huge club in English football, just announced losses of 170 million pound which will put them well outside the parameters for being punished for breaking financial fairplay rules, profit and sustainability rules as they are now."
He said Everton blamed $100m pounds of that loss on Covid, which is nonsense.
"But the Premier League which consists of the clubs that are in the Premier League at any one time - are not going to pick at that scab because it's an excuse they're going to use as well."
He said it is worrying that NZ Rugby is also using that excuse since Silver Lake has no moral reason for investing in New Zealand rugby.
"The only reason they've got involved in New Zealand Rugby is they've looked at it and they look at it long-term and they'll be thinking 20, 30, 40 years time 'we can make money out of this, we'll be making a continuing profit, we'll be getting interest payments.'"
Day said football clubs financially commit themselves to doing things like building new stadiums and sponsorship deals which require loans that they will be paying ruinous interest on for years to come.
He said he thinks many New Zealand rugby fans will be uneasy about this outside money being invested into New Zealand Rugby.
"I'm not telling you anything that you don't know, but it's part of your national psyche."
Day said in English football most fans are prepared to accept sponsorship because it is impossible to compete without taking sponsorship money.
"But again, in English football, there's a growing unease that clubs are sponsored by gambling companies, for example, the days are long gone where you could be sponsored by an alcohol company or a tobacco company and my guess is within five years gambling companies won't be able to sponsor football teams either."
Day said the worry will then be who will be able to afford to sponsor a Premier League Football club because it takes a lot of money.
"And that's when companies like Silver Lake come in as well, cause they'll spot an opportunity."
Day said New Zealand Rugby needs to consider what would happen if a sovereign state in the Middle East offers to fund them, such as happened with Newcastle United.
He said it is likely that New Zealand Rugby feels obliged to take Silver Lake funding.
"Silver Lake will dress it up as the act of a benefactor, but it isn't.
"It's heartbreaking to learn that New Zealand Rugby are no in hoc to a company like Silver Lake who are - yeah shadowy is really the only word you can use when you try and find out who it is that owns Silver Lake or who are the major investors in Silver Lake it's almost impossible to do."
