Agreement between the New Zealand Federation 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 team.

The vote of 89 to one, which gives Silver Lake a significant stake in NZR’s commercial rights, was described by NZR director Stuart Mitchell as a “landmark moment in the history of New Zealand rugby”.

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

The agreement stipulates the establishment of a commercial company, the majority of which is owned by the union, but in which the American company invests 200 million New Zealand dollars in exchange for a 5.8% stake.

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

– “Respect values ​​and traditions” –

In the run-up to the vote, closed-door meetings were held, as New Zealand’s 26 regional unions sought to ensure they would not be sidelined, and that there would be no financial repercussions for the new rugby league. -Zealanders at all levels.

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

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 champions.

With a success rate of 77% and having won three out of nine World Cups, they are one of the most successful teams in global sport. But they did not capitalize on their commercial potential as other major sporting brands did in Formula 1 or even European football.

NZR chief executive Mark Robinson said the deal would raise the All Blacks’ profile even further, “but it is by no means a silver 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 exchange 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 in women’s rugby and provincial rugby, while creating a fund to ensure the long-term financial stability of a union which has often run deficits in recent years. NZR in particular incurred losses of €20 million in 2020 due to the pandemic.

Mark Robinson believes that if money flows through the Silver Lake deal, it could help put in place a new salary structure and prevent some of his best players leaving for Europe or Japan.

However, Silver Lake is not her first attempt at sports.

In 2016, it was part of the investor group that bought the UFC, a major promoter of mixed martial arts (MMA) fights, and three years later acquired just over 10% ownership of the City Football Group from English soccer club Manchester City for $500. . million.