New Zealand Rugby has approved the massive $NZ200 million deal with US-based private equity firm Silver Lake in a groundbreaking deal.
The deal was confirmed in a vote taken by New Zealand Rugby delegates on Thursday, and $NZ200 million will be paid by Silver Lake will secure the firm 5-8% of NZR commercial revenue that they are expecting to increase.
In what NZR chairman Stewart Mitchell labelled a “monumental moment in the history of rugby in New Zealand”, the financial injection is hoped to improve player contracts, boost the development of the game from top to bottom and push a complete financial recovery from the Covid-19 pandemic.
The Rugby Players Association in New Zealand were against the deal and pushed for the union to seek alternatives.
Just short of NZ$37 million will be released on its completion with NZ$1 million for each union, NZ$500,000 for lower-level clubs, NZ$2 million for Maori rugby, NZ$7.5 million for local clubs and NZ$5 million to the rugby players association.
In addition to the Silver Lake investment, NZ Rugby will look to raise $NZ62.5-100 million from local sources.
A new organisation called CommLP will be created holding NZR’s commercial assets, where Silver Lake will earn a cut of between 5-8%. Meanwhile, the company will own 85% of Global Rugby Opportunities designed to support rugby-related investments in New Zealand.
The deal marks a massive moment in rugby union that may fast-track the commercial development of the game on a global scale if other unions see value in private-equity deals such as this.