New Zealand Rugby, players agree to sell stake to Silver Lake

New Zealand Rugby (NZR) and the players union have struck an in-principle agreement to sell a minority stake in NZR's commercial business to US private equity firm Silver Lake for NZ$200 million ($133.54 million).

The deal, which values NZR's commercial assets at NZ$3.5 billion ($2.34 billion), will see Silver Lake take 5.71%-8.58% of a new entity called "NZR CommercialCo" following an additional co-investment offered to New Zealand institutions later in the year.

It gives Silver Lake a smaller stake compared with the NZ$387.5 million offered for 12.5% last April, which was ultimately rejected by the players union.

NZR will have less money to plough into the game's development, even with a co-investment of up to NZD $100 million by institutions.

The deal will still need to be ratified by a majority of New Zealand's 26 provincial rugby unions, which stand to receive reduced distributions compared with the previous agreement.

"They'll have questions, they'll want to understand the proposal more," NZR boss Mark Robinson told reporters on Thursday.

"We would like it to be a really clean, clear majority and (then) we know we've got a really strong mandate to get into this."

NZR will retain full control over rugby as well as the commercial strategy, it said in a joint statement with the New Zealand Rugby Players Association (NZRPA) and Silver Lake.

The NZRPA will have a seat on NZR CommercialCo's board, which will have an independent chair and directors, the statement said.

Silver Lake, NZR and the NZRPA will also form an entity called "Global Rugby Opportunities" (GRO) to invest in "global rugby and rugby-related technology businesses" outside New Zealand.

NZR and NZRPA will take a 15% share of GRO's profits in return for "their contribution of sports expertise, know-how and relationships".

Though New Zealand's national men's All Blacks team are a global brand and commercial powerhouse, provincial rugby has drained NZR's coffers in recent years and been hit hard by the Covid-19 pandemic.

Robinson said the Silver Lake deal guaranteed an immediate injection of NZ$37 million to invest in the game at all levels.

"We've talked a lot about the fact that we need to get the game on more of a sustainable footing," he said.

"Initially, hopefully it can shore up the financial resilience of our stakeholders and members."