Agreement between the Federation of New Zealand and the Silver Lake Fund

The New Zealand Rugby Union (NZR) on Thursday agreed a NZ$200 million (€122 million) deal with California investment fund Silver Lake, ending a two-year battle for the commercial rights to the iconic All Blacks.

The 89-1 vote, which gives Silver Lake a significant stake in NZR's commercial rights, was described by NZR director Stuart Mitchell as a “historic moment in New Zealand rugby history”.

“It took us a long time to get here because our members care deeply about our game, our communities and our people,” he added.

The agreement calls for the establishment of a commercial company, majority owned by the union, but in which the American company will invest NZ$200 million in exchange for a 5.8% stake.

An additional NZ$100 million investment will then be made available to New Zealand institutional investors and Silver Lake’s stake could increase to 8.58% depending on the equity investment.

– “Respect for values ​​and traditions” –

In the run-up to the vote, closed-door meetings were held as New Zealand's 26 provincial unions sought to ensure they would not be marginalised and that there would be financial implications for the new rugby at all levels.

“Digital technologies are transforming sport and media, and presenting many opportunities for rugby, which we are ready to help realise while respecting the values ​​and traditions of the game in New Zealand,” said Silver Lake Managing Director Stephen Evans.

Rugby is more than just a sport in New Zealand: it is seen as an integral part of the social fabric, and the men's national team, the All Blacks, are national heroes.

With a success rate of 77% and having won three of the last nine World Cups, they are one of the most successful teams in world sport. But they have not capitalised on their commercial potential as much as other major sports brands in Formula 1 or even European football.

NZR chief executive Mark Robinson said the deal would raise the profile of the All Blacks further, “but it is by no means a magic bullet. We know we still have a lot of work to do and Silver Lake has the same vision for things.”

For his part, Stuart Mitchell hopes to reap the benefits of this partnership “in the next four to five years.”

In return for its expertise in better promoting New Zealand rugby and the All Blacks brand internationally, Silver Lake could get its hands on the massive commercial rights currently valued at NZ$3.5 billion (€2 billion).

The aim of NZR is to be able to invest money into women’s rugby and regional rugby, while creating a fund to ensure the long-term financial stability of the union which has often run a deficit in recent years. NZR in particular suffered a €20 million loss in 2020 due to the pandemic.

Mark Robinson believes if the money comes through the Silver Lake deal, it could help set up a new salary structure and prevent some of his best players from leaving for Europe or Japan.

However, Silver Lake is not her first foray into sports.

In 2016, she was part of the investor group that bought UFC, the major promoter of mixed martial arts (MMA) fights, and three years later acquired just over 10% of City Football Group owner Manchester City Football Club for $500 million.