HomeFinanceDeal Between Silver Lake and New Zealand Rugby Finally Reached.

Deal Between Silver Lake and New Zealand Rugby Finally Reached.

Deal Between Silver Lake and New Zealand Rugby Finally Reached.

After nearly a year of negotiations, it has been confirmed that Silver Lake will invest NZD$200m (AUD$186m) into New Zealand Rugby (NZR) to form a new commercial entity, ‘NZR CommercialCo’.

Silver Lake is an American global private equity firm with an investment interest in technology and technology related industry’s however it has numerous stakes in big sporting organisations like the Australian Professional Leagues.

NZR CommercialCo will house NZR’s revenue generating assets while its formation marks a pivotal deal in the transformation of New Zealand Rugby on the world stage.

The deal was originally blocked by New Zealand Rugby Players association (NZRPA) due to fears American investment would diminish the traditional value of three-time world champions, the ‘All-Blacks.’

However, after months of negotiation, NZR, NZRPA, and Silver Lake have reached an agreement that diminishes the player association’s fears and allows NZR to have full control over New Zealand rugby and the entity’s commercial strategy.

NZPRA chairman, David Kirk, expressed the player association’s agreement with the deal by explaining that it ensures a true and comprehensive partnership that understands what rugby means to the people of New Zealand.

“Silver Lake have shown great integrity and a commitment to getting the right deal in place…We are confident that Silver Lake is the right investment partner,” Kirk said.

Silver Lake’s initial investment into NZR CommercialCo will be followed with additional co-investments of up to NZD$100m (AUD$93.1m) to be offered to New Zealand-based institutional investors later this year.

Following the co-investment, Silver Lake’s stake in NZR CommercialCo will be between 5.71 and 8.58%, which is a substantially smaller stake compared to the initially proposed 10-15%.

To further navigate public concern of American influence and ensure high governance standards, the NZR CommercialCo board will be controlled by NZR and will include a new independent chair and independent directors.

NZR CEO, Mark Robinson, said he is hopeful that the partnership will secure NZR’s future.

“We are truly excited by what we can achieve together with Silver Lake’s world class capabilities; from fostering and growing our grassroots, to enhancing the experiences we can create for New Zealanders, and truly maximising our potential on the global stage,” Robinson said.

In conjunction with the formation of NZR CommercialCo, Silver Lake, NZR and NZRPA will establish ‘Global Rugby Opportunities’ (GRO) to invest in rugby related digital technology businesses external to New Zealand.

Having already invested in numerous technological and digital entities, Silver Lake and its managing director, Stephen Evans, have said that digital technology is the path to sports transformation.

“… we look forward to bringing our global network and resources to help New Zealand rugby drive innovation and take advantage of all the opportunities ahead,” Evans said.

The agreement between Silver Lake and NZR is subject to ratification by New Zealand’s 26 provincial unions and the Māori Rugby Board, however it is expected that the partnership’s promise of NZD$1.15m (AUD1.07m) to each union will seal the deal.

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