Silver Lake buying a stake in the ABs?
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I agree with Hansen, these parties need to get together and sort this behind closed doors rather than through the media.
Players come over as a bit greedy to me, NZR come over as fools.
In saying that, Robinson hasn't really done much right since taking over from Tew has he?
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@gt12 said in Silver Lake buying a stake in the ABs?:
@kirwan said in Silver Lake buying a stake in the ABs?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
intellectual tech that Silver Lake offers in terms of capability and competency framework
"intellectual tech that Silver Lake offers in terms of capability and competency framework"
What does this mean?
I’m yet to hear it clearly explained but the past consultant in me hears this:
credibly provide access to e-business growth strategies
See here
Thanks, I genuinely had no idea what it meant. I’d be all over buying streaming directly from NZR.
Edit: Great link, giving that to my boss.
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@kirwan said in Silver Lake buying a stake in the ABs?:
@gt12 said in Silver Lake buying a stake in the ABs?:
@kirwan said in Silver Lake buying a stake in the ABs?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
intellectual tech that Silver Lake offers in terms of capability and competency framework
"intellectual tech that Silver Lake offers in terms of capability and competency framework"
What does this mean?
I’m yet to hear it clearly explained but the past consultant in me hears this:
credibly provide access to e-business growth strategies
See here
Thanks, I genuinely had no idea what it meant. I’d be all over buying streaming directly from NZR.
Edit: Great link, giving that to my boss.
When I was doing some consultancy with a friend of mine a few years ago, we would add at least one phrase from that site in our presentation and challenge the other to pick it in real time.
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@gt12 said in Silver Lake buying a stake in the ABs?:
@kirwan said in Silver Lake buying a stake in the ABs?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
intellectual tech that Silver Lake offers in terms of capability and competency framework
"intellectual tech that Silver Lake offers in terms of capability and competency framework"
What does this mean?
I’m yet to hear it clearly explained but the past consultant in me hears this:
credibly provide access to e-business growth strategies
See here
I thought the article with Buck Shelford hit the mark. He was saying that he heard a story but wasn’t convinced by it and then the answers given to questions didn’t give him any more reassurance. The nuts and bolts are what will Silverlake do to make this company that NZRFU is investing $40m of its sales price into to work? Does it come with some agreed commercial arrangements and IP or is it just another startup making its way in the world. Everything else is just spin. That’s what they need to convince the stakeholders. This have to do it, best option, rush to sign it is just not right. It is not your typical business. It has many stakeholders and as Buck says, they haven’t been consulted in a genuine way.
It would be interesting to see the history of NZ companies who have rushed to buy assets overseas, and ended up being sold pups e.g. two old ones now being Telecom with AAPT, Warehouse with Yellow sheds in Aussie. I am sure they had analysts all over those deals and then ended up losing their shirts. Can’t really think of any expansionary successes?
In comparison, corporate raiders have had sweet pickings in NZ. We always buy the line that we need international investment and sell ownership, when it’s not money that is required.
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@gt12 said in Silver Lake buying a stake in the ABs?:
@kirwan said in Silver Lake buying a stake in the ABs?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
intellectual tech that Silver Lake offers in terms of capability and competency framework
"intellectual tech that Silver Lake offers in terms of capability and competency framework"
What does this mean?
I’m yet to hear it clearly explained but the past consultant in me hears this:
credibly provide access to e-business growth strategies
See here
Brilliant - love it.
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@steven-harris said in Silver Lake buying a stake in the ABs?:
The only credit I will give Rob Nicol is the fact he is winning the charm offensive hands down ,
Is he? Being out of the country I'm missing that.
I'll once again reiterate my position in that the Silver Lake deal is a guaranteed lump sum capital investment for an agreed percentage return, with a win-win based on increasing revenue through avenues that the investors have available to them.
The FSB deal seems to be a nebulous, hoped for investment, appealing to people who are already heavily invested in NZ rugby, without a clear plan to increase revenue.
Anyone remember that failed campaign in the early/mid 90s under that idiot David Moffett where you could ring a 0900 number to "donate" $5 to "club rugby". Seemed like a good idea. But the people who would be prepared to send $5 to club rugby were already up to their eye balls in membership fees, volunteering, sponsoring etc etc.
Mum and Dad investors aren't buying into this as they're already a part if it.
Can't see institutional investors buying in as they just want the return, without the effort to try and increase that revenue.
And again, the only part of this equation whose only responsibility is to maximise the return for the individuals within it's membership is the only stakeholder resisting the deal.
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@booboo said in Silver Lake buying a stake in the ABs?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
The only credit I will give Rob Nicol is the fact he is winning the charm offensive hands down ,
Is he? Being out of the country I'm missing that.
I'll once again reiterate my position in that the Silver Lake deal is a guaranteed lump sum capital investment for an agreed percentage return, with a win-win based on increasing revenue through avenues that the investors have available to them.
The FSB deal seems to be a nebulous, hoped for investment, appealing to people who are already heavily invested in NZ rugby, without a clear plan to increase revenue.
Anyone remember that failed campaign in the early/mid 90s under that idiot David Moffett where you could ring a 0900 number to "donate" $5 to "club rugby". Seemed like a good idea. But the people who would be prepared to send $5 to club rugby were already up to their eye balls in membership fees, volunteering, sponsoring etc etc.
Mum and Dad investors aren't buying into this as they're already a part if it.
Can't see institutional investors buying in as they just want the return, without the effort to try and increase that revenue.
And again, the only part of this equation whose only responsibility is to maximise the return for the individuals within it's membership is the only stakeholder resisting the deal.
It’s Silverlake that get the guaranteed return. 6.7%. Then it’s the NZRFU that is funding the new company. It’s a startup so there is risk which is 100% with the NZRFU.
So exactly what commercial agreements and IP will Silverlake provide to this new company? We have heard they will be allowed to advertise on Twitter ( along with everyone else ) and they can build some Rugby games ( as anyone can ). Where are the new deals that only they can access?
Selling 12.5% of your revenue ( not profit ) for EVER ( with the other party taking no risk - because at 6.7% they are in the gravy ) is not something a normal business person would ever do. And this is not a normal business, it’s a sport that belongs to everyone. Not some corporate raiders.
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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?:
@steven-harris said in Silver Lake buying a stake in the ABs?:
The only credit I will give Rob Nicol is the fact he is winning the charm offensive hands down ,
Is he? Being out of the country I'm missing that.
I'll once again reiterate my position in that the Silver Lake deal is a guaranteed lump sum capital investment for an agreed percentage return, with a win-win based on increasing revenue through avenues that the investors have available to them.
The FSB deal seems to be a nebulous, hoped for investment, appealing to people who are already heavily invested in NZ rugby, without a clear plan to increase revenue.
Anyone remember that failed campaign in the early/mid 90s under that idiot David Moffett where you could ring a 0900 number to "donate" $5 to "club rugby". Seemed like a good idea. But the people who would be prepared to send $5 to club rugby were already up to their eye balls in membership fees, volunteering, sponsoring etc etc.
Mum and Dad investors aren't buying into this as they're already a part if it.
Can't see institutional investors buying in as they just want the return, without the effort to try and increase that revenue.
And again, the only part of this equation whose only responsibility is to maximise the return for the individuals within it's membership is the only stakeholder resisting the deal.
It’s Silverlake that get the guaranteed return. 6.7%. Then it’s the NZRFU that is funding the new company. It’s a startup so there is risk which is 100% with the NZRFU.
So exactly what commercial agreements and IP will Silverlake provide to this new company? We have heard they will be allowed to advertise on Twitter ( along with everyone else ) and they can build some Rugby games ( as anyone can ). Where are the new deals that only they can access?
Selling 12.5% of your revenue ( not profit ) for EVER ( with the other party taking no risk - because at 6.7% they are in the gravy ) is not something a normal business person would ever do. And this is not a normal business, it’s a sport that belongs to everyone. Not some corporate raiders.
Sorry. Didn't phrase that well. There is an agreed percentage for the investor in the SL deal, but an unknown for the investor in the public float.
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@kev said in Silver Lake buying a stake in the ABs?:
Selling 12.5% of your revenue ( not profit ) for EVER ( with the other party taking no risk - because at 6.7% they are in the gravy ) is not something a normal business person would ever do. And this is not a normal business, it’s a sport that belongs to everyone. Not some corporate raiders.
the other party is taking a risk with the capital they are investing.
Them making money is dependent on NZR remaining profitable, surely? I mean, if NZR go under, they lose too.
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@taniwharugby said in Silver Lake buying a stake in the ABs?:
@kev said in Silver Lake buying a stake in the ABs?:
Selling 12.5% of your revenue ( not profit ) for EVER ( with the other party taking no risk - because at 6.7% they are in the gravy ) is not something a normal business person would ever do. And this is not a normal business, it’s a sport that belongs to everyone. Not some corporate raiders.
the other party is taking a risk with the capital they are investing.
Them making money is dependent on NZR remaining profitable, surely? I mean, if NZR go under, they lose too.
They get revenue % so their risks are much reduced if any.
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Another question is what is NZRU planning to do with its new found reserves?
$40m to new company to grow revenue, $40m to Provinces. Leaves another $300m to do what? Apparently this is desperately needed....but maybe not all of it....right now. I know the thinking might be taking it while it’s on offer but giving up so much revenue for EVER is an over reach by current administration.
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@steven-harris said in Silver Lake buying a stake in the ABs?:
Price Waterhouse Cooper also looked over the deal and said
The opinions of graduates managed by someone who has never actually run a business isn't worth a bucket of warm piss. And as anyone who has whored themselves out as a consultant knows; you never write the report until you know what the paying client wants to hear.
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OK. Let's solve this.
Assume conservative revenue base is $175m p.a..
Sell royalty over 12.5% revenue up to, say, $180m p.a. in a tax efficient fashion, perhaps via pension fund/listed vehicle.
That's $22.5m p.a. income. Let's assume 4.5% yield equals $500m.
Then set up jv with SL whereby SL gets royalty equal to 25% of revenue OVER $180m p.a.. Initial SL investment, say, $30m. Maybe NZR matches that.
NZR gets long term patient capital, significantly higher proceeds, and retains access to SL commercial expertise.
SL gets association with one of sport's greatest teams, reduced investment but enhanced share of the growth it helps to generate.
MUCH BETTER!
And if SL won't play ball it can only suggest there's more to it's existing deal than it's letting on.
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@pakman said in Silver Lake buying a stake in the ABs?:
OK. Let's solve this.
Assume conservative revenue base is $175m p.a..
Sell royalty over 12.5% revenue up to, say, $180m p.a. in a tax efficient fashion, perhaps via pension fund/listed vehicle.
That's $22.5m p.a. income. Let's assume 4.5% yield equals $500m.
Then set up jv with SL whereby SL gets royalty equal to 25% of revenue OVER $180m p.a.. Initial SL investment, say, $30m. Maybe NZR matches that.
NZR gets long term patient capital, significantly higher proceeds, and retains access to SL commercial expertise.
SL gets association with one of sport's greatest teams, reduced investment but enhanced share of the growth it helps to generate.
MUCH BETTER!
And if SL won't play ball it can only suggest there's more to it's existing deal than it's letting on.
Sharing in revenue “growth” is a much better deal for us. If we could get it I would like to see current broadcasting rights excluded but give them a higher % of the new marketing company and take less money up front. The more i think about we have really been sold a turkey and these guys will think it’s Xmas.
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@pakman said in Silver Lake buying a stake in the ABs?:
OK. Let's solve this.
Assume conservative revenue base is $175m p.a..
Sell royalty over 12.5% revenue up to, say, $180m p.a. in a tax efficient fashion, perhaps via pension fund/listed vehicle.
That's $22.5m p.a. income. Let's assume 4.5% yield equals $500m.
Then set up jv with SL whereby SL gets royalty equal to 25% of revenue OVER $180m p.a.. Initial SL investment, say, $30m. Maybe NZR matches that.
NZR gets long term patient capital, significantly higher proceeds, and retains access to SL commercial expertise.
SL gets association with one of sport's greatest teams, reduced investment but enhanced share of the growth it helps to generate.
MUCH BETTER!
And if SL won't play ball it can only suggest there's more to it's existing deal than it's letting on.
Your structure is so much better. Think we have got greedy and don’t realise we are being tucked.
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Read not keen on SL, player's defintely see a different side to the selling of ownership than the 'suits'
From NZH Paywalled - There's a lot more https://www.nzherald.co.nz/sport/former-all-blacks-captain-kieran-read-reveals-concerns-with-the-silver-lake-deal/NAKNAZB7ECE7EAT7DLK3APYPSQ/
In an interview with Newstalk ZB, asked about the lay of the land in Japan and whether he thought the Olympic Games should go ahead as planned, the 35-year-old revealed he experienced a minor case of Covid-19.
"My club went through Covid – I had it," Read said. "We had a few weeks of isolation.
"It wasn't too bad - there was a day or so of feeling pretty bad and upset then I came good. Half our team got it and it went round quite a few of the clubs so they postponed the season.
"It was quite strange, you would expect us all to have the same strain but we didn't know what it was. Some guys lost taste and smell; some had fevers, some were quite mild, some guys it lasted for a week or so, it depended on the person. I was fine after a couple of days.
"The Japanese people are very compliant. I wore a mask for six months, everywhere I went, everyone does that.
"I've seen the New Zealand Inc proposal and from New Zealand's point of view you've got to seriously look into it and show a little bit of vulnerability and say perhaps there is another viable option, let's genuinely have a look at it because if we don't have a strong robust debate about the options then we're going to be stuck with one which potentially might not have been the best option," Read said.
"In a big decision you can't be shut off and think this is the one way to go. You've got to look at different perspectives. New Zealand Rugby definitely needs to look at this proposal genuinely not just with a grain of salt. The New Zealand public and fans just want it to be resolved in the best way possible that's going to help everyone in the game here.
"The thing that scares me around Silver Lake is that the 12.5 per cent is going to be given to them forever. That scares me a lot because I know they're looking to grow this game, which is what we want to do, then it's a big chunk of what we're making going into that.
"I look at the New Zealand Inc proposal and I personally like it because it's about Kiwis having a slice of the pie they really care about. Money is a big thing, but it's not the be all and end all. It's making sure we grow the game as best we can. There's only so much money can do. People in New Zealand are willing to do with the most they can with what's given to them."
The $387 million windfall aside, one of the arguments for the Silver Lake deal is the capability and established contracts the US firm is expected to bring in regards to potentially doubling NZ Rugby's annual revenue through monetising offshore fans.
Read, however, believes NZ Rugby could instead use the Players' Association proposal to hire that expertise.
"It's giving you a good chunk of money to go out and get these people who can have that reach around the world. That's what Silver Lake are going to do – they're not doing it themselves. They're going out and getting those people. We know how strong the All Blacks brand is, what it can do and the doors it can open, so if you go and leverage it you've got the money to have those conversations if need be."
Despite an extensive process which involved NZ Rugby engaging Jefferies banking group and commissioning an independent PWC report that was presented to the 26 provincial unions, who then voted unanimously in favour of the Silver Lake proposal at the recent AGM, Read believes alternatives were not thoroughly explored.
"The Players' Association probably don't think New Zealand Rugby did their full due diligence and looked at this proposal genuinely prior to signing with Silver Lake. New Zealand Rugby have decided this is going to give us the most money so go with this. The big thing here is making sure they sit down and trust each other to be honest. The only way to do it is sitting down and making sure you grind it out with each other. Hopefully that's going to happen."
At heart of the ugly, ongoing public standoff between NZ Rugby and the Players' Association is a feeling the players were not included early enough in the process.
"It's pretty easy to see that's how it should have been done," Read said. "That's how it's supposed to be done in terms of the collective and it would probably have stopped all this airing of the laundry out in the public and potentially offered New Zealand Rugby some genuine options they could have looked at before going down this pretty long tunnel of Silver Lake without all these different options that could have come their way."
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I’m sure it’s already been mentioned, but this part has me wondering whether it’s all Yank bullshit.
The $387 million windfall aside, one of the arguments for the Silver Lake deal is the capability and established contracts the US firm is expected to bring in regards to potentially doubling NZ Rugby's annual revenue through monetising offshore fans.
Apart from having those bs games in Boston that we love so much, how on earth are they suddenly going to double the revenue? What do these geniuses (who no doubt have a strong understanding and commitment to the sport of rugby) have up their sleeve that’s worth handing over 12.5% of revenue for. And I understand that’s in perpetuity right?
As other posters have already mentioned, with money so ridiculously cheap right now why not take out a loan if they do desperately need the cash. The interest would be far lower than handing over revenues until the end of time.
I could have my wires completely crossed here so feel free to have a kick, but this does seem like a pretty stupid deal. I keep coming back to what SL will actually be able to do for NZ rugby and whether they can actually increase revenues to such an extent that this deal makes sense.
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It's a dream deal isn't it? An eighth of all revenue (not profit!) for the rest of time for only $387 million upfront.
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