Silver Lake buying a stake in the ABs?
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@machpants said in Silver Lake buying a stake in the ABs?:
@booboo said in Silver Lake buying a stake in the ABs?:
It's a catch 22. NZ rugby (as opposed to NZ Rugby) needs the All Blacks to make money to fund the game, but the more money the All Blacks make the more money they want, thus there is less money to fund they game, thus the All Blacks have to make more money to fund the game, and thus they want more money ..
They don't want more money, they automatically get more money. The collective agreement gives a percentage of income to players. No ifs buts or maybes, so yes the more money the ABs make the more they get. But it is not a catch 22, as that percentage doesn't change.
They get a set proportion of income.
Capital investment is not income.
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@taniwharugby it’s all about the detail. Just a great believer in you get nothing for free. Sometimes everything ain’t that shiny.
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@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.
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@dagrubster The AB valuation is probably a little deflated at the moment due to Covid. Silver Lake will probably make capital gains just by buying in at the right time.
They will also be buying a right to a proportionate percentage of generated revenue. They dont just hand over 500m and get whatever they can make on top. They buy the right to a percentage of future earnings. Who knows how much, but it probably reflects the percentage of their stake.
So, nah. They can just buy in and sit on their hands and they will still make money.
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I’m not in favor of it, but I equally don’t 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 doesn’t sound like enough to me, even if I could stomach it.
I can’t 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 wouldn’t 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 don’t 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 it’s structured, where the risks lie. Devil is in the detail but Ownership is forever and I just don’t 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 won’t have the chips to buy SL out. So another Private Equity type, or successful foreign ‘entrepreneur’ 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 month’s annual meeting –scheduled for the 29th – 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 union’s $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 Rugby’s 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 hasn’t 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. “We 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. “The 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 survives” 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. “We believe this opportunity deserves our unconditional support and is required to secure the long-term future of rugby in our country”. -
i find that reassuring
