Silver Lake buying a stake in the ABs?
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Iâm not in favor of it, but I equally donât trust NZRU to get it right alone. Their recent history suggests they need some adults in the room and SL may be able to provide a framework for some needed change to happen.
On the other hand, I just hate it. Like, really hate it. And it feels like a good chunk of NZ culture can be bought for about 460 million dollars, which is about the value of 460 houses in Auckland. That doesnât sound like enough to me, even if I could stomach it.
I canât help but feel that this is a really shrewd investment that will certainly pay off for SL if it happens.
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From the NRU CEO
You will have noted that there has been a lot of public commentary about the proposed SilverLake private equity purchase of a minority holding in NZ Rugby, whilst we believe there are many positives in this proposal there are some issues that NRU are seeking clarification on, in particular, our focus on and the commitment to our community game.
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@nepia said in Silver Lake buying a stake in the ABs?:
@dan54 said in Silver Lake buying a stake in the ABs?:
@sparky said in Silver Lake buying a stake in the ABs?:
@stargazer said in Silver Lake buying a stake in the ABs?:
I've the feeling that NZR is using media tactics to get everyone behind the Silver Lake deal.
It threatens provincial unions with huge bills if they don't agree with changing the format of the Mitre 10 Cup.
They use it in discussions about a women's SR competition.
Now, apparently, Robertson staying in NZ hinges on that deal. What have they told him?I smell dirty politics ....
What about alternatives to the Silverlake deal? Have they thought of any or is this the only horse they're betting on?If Razor ends up coaching the England, the main person to blame will be the muppet who appointed Foster to coach the ABs instead of him.
That would be Mark Robinson.
No the only person to blame if Razor decides to coach England is Razor himself! When a player goes overseas because he misses the ABs is exactly the same. If you want something badly enough you fight for it!
That analogy doesn't work. If a player misses the ABs in June they can fight their way back in by the end of the year.
Razor can't get the AB job for a set period. He can't fight to get it.
Regardless mate, Razor a big boy, if he decides to go overseas, it still his decision, and to blame anyone else is just avoiding the issue that he either decide his future is in NZ or overseas. I not mking excuses or saying it right or wrong, but the bottom line is , only one person decides what Razor wants. That is Razor not Robinson or the actual board that recomended Foster etc. I sure even Razor will tell you that.
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@kev said in Silver Lake buying a stake in the ABs?:
@booboo said in Silver Lake buying a stake in the ABs?:
And I'm astonished that people think NZR (there is no NZRU anymore) haven't looked deeply into this, considered multitudinous alternatives, carried out extensive Due Diligence, weighed the alternatives and settled on selling a small 15% stake of commercial income for $465m of capital as being a good outcome.
All I can see is the players trying to get their hooks into the capital, rather than the increased revenue.I wouldnât be so sure - it looks like a big number and am thinking they are just creaming themselves, as are the media. There is no rocket science here. Just marketing and a line of credit from a bank. All we have heard is that they will set up a company to market the ABs. Why do they need to sell 15% of the ABs forever to do this? Silver lake donât have special powers - do it them selves or hire people to do it, which is what Silver lake plan to do. We know nothing about the deal and how itâs structured, where the risks lie. Devil is in the detail but Ownership is forever and I just donât want someone else owning us.
What worries me most about this is that Silver Lake will be looking to sell the 15% on after five to ten years. If things work the valuation will be a lot higher. NZR wonât have the chips to buy SL out. So another Private Equity type, or successful foreign âentrepreneurâ or IPO. All smell of big trouble.
IMO NZR ought to be looking at less money up front in return for ten year deal, with renewal rights. If SL can create a much greater than base case revenue stream then they make a very good return on money. Perhaps with 25% share of revenue above threshold.
More money up front is highly likely to prove EXTREMELY COSTLY in the long term.
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@machpants said in Silver Lake buying a stake in the ABs?:
Aaron Smith is on a board? I hope he's not the secretary.
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This depresses me so much, that I haven't read anything much about it, or considered the alternative if dont take PE.
I'm against it.
I curse foreign leagues and unions with government bailouts and their own PE deals making this race to shittery necessary.
I'm just slowly disengaging from the sport.
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@mofitzy_ said in Silver Lake buying a stake in the ABs?:
@pakman
Sure, but Silverlake would have a vested interest in NZR succeeding, so it could be a mutually beneficial agreement.Not against Silver Lake, per se. Just better to structure more partnership style limited term venture and take less up front. If things work the money will take care of itself.
If not, priority to be able to ensure a clean break.
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If the deal goes ahead, it will be interesting to see the breakdown of income streams in years to come and whether it lives up to the hype.
NZ Rugby is already largely comprised of its commercial operations. Its 2020 accounts will get filed at this monthâs annual meeting âscheduled for the 29th â where the unions will vote on whether to agree to a final proposal. In calendar 2019, the national union generated income of $187.1 million, of which $57.5m was from broadcasting rights, $72.9m from sponsorship and licensing, and $16.4m from matchday takings. $27.9m of other income largely came from the unionâs $20.2m of Rugby World Cup grants and $5m from NZ government grants. Of its $194.5m expenditure that year, $54.2m went to the national teams, $92.3m to competitions and $14.1m on administration. Another $33.3m went to game development through NZ Rugbyâs distributions to the 26 provincial unions. In 2018 and 2019, that sets the commercial operations cost base at about $150m, with commercial income of almost $170m in 2018 and $147m the following year. How that will actually look under a new model hasnât been ironed out yet, with the prospective deal with Silver Lake still just a proposal.Source: https://businessdesk.co.nz/article/finance/the-missing-silver-lake-link-and-all-blacks-ltd
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@mofitzy_ said in Silver Lake buying a stake in the ABs?:
@pakman
Sure, but Silverlake would have a vested interest in NZR succeeding, so it could be a mutually beneficial agreement.I was also thinking this. The return on their investment is heavily dependent on the ABs success on the field. The value of the brand would collapse if the ABs went the way of Wales in the 90s and 00s.
But are the Yanks aware of this? They have iconic sporting teams in the US that are cash cows regardless of their success (look at the Nicks). Same probably applies for the top PL soccer clubs.
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A statement on behalf of the Heartland unions was sent to media on Friday afternoon:
Today, all 12 Heartland Provincial Unions want to unanimously express their public support for the proposed Silver Lake partnership with NZ Rugby. âWe believe it is time for our views to be heard because rugby for all of our players and participants starts in our communities and Heartland Rugby is all about community rugby. âThe grassroots level of the game is the cornerstone of rugby in New Zealand and we see the Silver Lake partnership with NZ Rugby, vital in ensuring community rugby survivesâ said Heartland Secretariat, Chairperson, Bridget Belsham. As custodians of the community game in their individual regions, the Heartland Provincial Unions represent a significant number of Clubs & Schools. Funding is required to ensure the important development pathways and participation programmes are available to support & grow the game in our regions. Rugby is facing immense challenges and investment into the community game must happen now. There are more than 150,000 rugby players in New Zealand and millions of fans. âWe believe this opportunity deserves our unconditional support and is required to secure the long-term future of rugby in our countryâ. -
i find that reassuring
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Here is the full article on Stuff.
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The furore over the breakaway six in UK football is a window into the issues.
For big money the objective is to recruit international fans. The problem is that they want to watch the big ten countries play each other and arenât so interested in Super rugby etc. And playing in Europe more practical than on other side of world.
The original fan base is easily disenfranchised.
Rather we throw our lot in with Japan.
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Former NZ Rugby boss fears ultimate cost of Silver Lake deal
Meaningless exhibition games for the All Blacks and a greater stake in New Zealand Rugby will be the ultimate outcome of the proposed $460 million deal with US tech giant Silver Lake fears a former head of New Zealand Rugby. Next week's New Zealand Rugby AGM will vote on whether to proceed with the proposed $460 million deal which would give Silver Lake a 15 percent stake in the game. But David Moffett, who was chief executive of New Zealand Rugby between 1996 and 2000, struggles to see where the value for Silver Lake is. "Silver Lake are not benefactors. They are not going to pump a whole lot of money into New Zealand Rugby without expecting a return (so) I am struggling to see how they can increase the revenue return to NZR and ultimately themselves that New Zealand Rugby haven't been able to do on their own," Moffett said. "After all, they (NZR) are the biggest rugby brand in the world. They are right up there with Manchester United and some of those other great sporting brands. "There wouldn't be a door that (CEO Mark Robinson) couldn't open to talk about raising money... so what happens if this doesn't work out?" The backlash from football fans in the Britain and Europe over the now suspended European Super League should also be a warning sign, Moffett said. "Clubs have sold their souls and then had to do complete backflip." But Moffett accepted the NZR was caught between a rock and a hard place in trying to secure its financial future "just like every rugby union in the world". "Even prior to Covid things were looking pretty difficult especially with the implosion of Super Rugby which was going to happen irrespective of Covid because they couldn't make up their mind just what sort of format it was going to take and people were turning off in droves and I hope for New Zealand Rugby's sake they have chose the right path to go down." If the deal did not lead to more flowing into grassroots rugby "it could have the opposite effect and that would be terrible", Moffett said. Under the proposal, Silver Lake will essentially get a 15 percent stake in the new commercial rights company that would be established, but Moffett felt Silver Lakes influence would translate to more than that. "If (Silver Lake) don't get the return they expect, they may very well say we want a bigger percentage and a bigger say. "Because if they don't get the return that has been worked out, because spread sheets are one thing but delivery is another, then they will be looking at ways at which they can and... the first place they will look at is how many times can we get the All Blacks to play and where they can get them to play. "Will it be exhibition matches in the United States for example? But whether it's now or in the future you will see the All Blacks playing more games and perhaps more meaningless games and that just devalues the greatest brand in rugby."
