New Zealand's Provincial Unions have approved a historic private equity deal between New Zealand Rugby (NZR) and US investment firm Silver Lake.
The deal will see Silver Lake take a 12.5 percent stake in the game, with the company injecting $387.5 million back into NZR.
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This came after the organisation posed an operating loss of $18.7 million, with a write-down of Sky TV shares seeing this figure skyrocket to 34.7m.
In a statement on Thursday, NZR Chairman Brent Impey believes that the move to accept private equity was one of the biggest in their history.
“We are thrilled that our Provincial Unions and the Māori Rugby Board have recognised the importance of private equity in driving commercial revenue and enabling investment to ensure rugby thrives and survives into the future," he said.
"Today’s vote for Silver Lake represents a transformational opportunity for our game and one we must grasp.”
The deal allows NZR to re-focus their attention towards grassroots Rugby according to CEO Mark Robinson after a tough COVID-affected year.
“A year ago we were facing a collapse of more than 60 percent of our revenue and had to make some hard decisions in a short amount of time in order to keep costs down, while getting our players on the field and keeping our stakeholders engaged," he said. “From the Heartland unions’ decision to cancel their representative season, to the extra hours our staff and players have put in, the past year has been difficult, and we acknowledge the hardships felt by our people at all levels across the game. “We could not have done this without the support of our fans, who turned out in force, the New Zealand Government, Sport New Zealand, our broadcast partner Sky TV, ACC and loyal sponsors like Adidas and AIG, as well as the media.
"While rugby was not immune to falling player numbers, with COVID-19 severely limiting the ability to run school age tournaments, it allowed NZR time to re-prioritise the community game, he said.
“Private equity would provide the impetus for us to water the grassroots and resource the areas most in need at our clubs and Provincial Unions. It’s an exciting time to be involved.”
Despite the green light from the Unions, the deal is yet to receive confirmation from the Players' Association, branded as disappointing by Impey.
"Through swift action, good governance and hard work of our people we are fortunate to be one of the best placed national unions in the world. However, we are at a critical juncture and need our players’ support if we are to make the most of the opportunity in front of us," he added. “The game has to change, and Silver Lake’s capital injection would allow us to re-imagine rugby and invest in the areas of the community game that need it most, particularly teenage and women’s rugby, and to create better and more engaging experiences for our fans. “The players are a critical part of this journey, but we have to look at what is right across all levels of the game, our whole eco-system.
"We hope the NZRPA will realise the significance of the opportunity in front of us and will continue to work toward an agreement in coming weeks.”
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