Silver Lake buying a stake in the ABs?



  • Buyout giant Silver Lake closes in on stake in New Zealand All Blacks
    
    New Zealand Rugby is in advanced discussions about the sale of a stake to buyout firm Silver Lake, Sky News understands.
    

    https://news.sky.com/story/buyout-giant-silver-lake-closes-in-on-stake-in-new-zealand-all-blacks-12185341



  • @KiwiMurph said in Rugby Finances:

    Buyout giant Silver Lake closes in on stake in New Zealand All Blacks
    
    New Zealand Rugby is in advanced discussions about the sale of a stake to buyout firm Silver Lake, Sky News understands.
    

    https://news.sky.com/story/buyout-giant-silver-lake-closes-in-on-stake-in-new-zealand-all-blacks-12185341

    Bloody hell. I am not comfortable with that, it's our national team and our heritage. Yes they need to be financially viable but we do that through sponsorship not sale.



  • @Snowy Can't say I'm comfortable with it either, but if the article is accurate then I'm not as opposed as others may be. Especially given the future of sport and our competitiveness against the financial clout of the NH.

    $2 billion to give them a say in digital and media strategy (and profits) can't be too bad?

    'Silver Lake is one of the world's leading technology investors, and its partnership with the All Blacks is likely to focus on an attempt to build its digital and media rights strategy, reflecting a similar approach across City Football Group's portfolio of footballing interests.'



  • still working through how I feel about it

    I follow and am a member of the Trust that Owns AFC Wimbledon in the English League 1. The Short story, our club was stolen and so a group of fans got together and started a new club at the bottom of the football pyramid, solely owned by a Trust we the fans owns shares in, one fan one vote deal

    We have a rock solid constitution aimed at protecting the founding Principe of the club, "Fan Owned". We are getting to the point in the football ladder where that model is getting tested, financially. Building our new stadium last year has required a lot of us to invest cash, loans, grants...and finally a minority share holder.

    It took a lot of work and tweaks, things like special shares, non transferable, limited voting rights so he got his profit but couldn't control the direction of the club

    it can be done...but it has to be done properly



  • Well at least it beats being associated with a horrible beer like Steinlager.



  • I would need to see exact agreement before passing judgement (if it is just negotiating global media/digital rights then go ahead) but the first principle for me, as with the AIG sponsorship, has always been at least rationalize the ITM Cup and Super Rugby tournament before prostituting the All Black legacy.



  • The shareholders of NZ Rugby are the clubs and the provinces - selling ownership is forever and my starting position is I hate it, but of course I don’t know the detail.

    As soon as you put the short term profit motive (as businesses do) in front of longer term goals you will ruin the sport. I can just see the cost cutting discussions now.....Rugby in NZ has always been about participation in a team sport that’s a lot of fun. From that inclusiveness and its support you get an egalitarian sporting model - from club to provincial to S15 to the ABs. The All Black legacy is nothing without Clubs and Provinces. For me the ABs are just the cherry on top of NZ Rugby. If the English and French want to bankrupt themselves buying players they can’t afford let them - we should implement transfer fees though.

    They can rationalise to their hearts content Super 15 rugby (or whatever it is now) but they should just leave the rest alone. Provinces are not just some branch office in a banking network.





  • @Kiwiwomble

    Sounds a bit like my old team, Wycombe Wanderers, who have a long history of supporter ownership but have also work closely (and successfully) with businessman like Ivor Beeks. The club has just negotiated a 75% sale to an American businessman but the supporter-owned trust still owns the ground and physical assets.

    It has a phenomenal record of producing top flight managers too - Martin O'Neil, John Gregory & Lawrie Sanchez all cut their teeth at the club.



  • @kev said in Silver Lake buying a stake in the ABs?:

    The shareholders of NZ Rugby are the clubs and the provinces - selling ownership is forever and my starting position is I hate it, but of course I don’t know the detail.

    It CAN work (some football clubs have done it successfully) but needs the right partner and risks need to be managed.

    Wonder if this is Covid cashflow-related - hope not as there could be dangers with a short-term view.



  • @Victor-Meldrew is not covid related, it was talked about before. NZ rugby is totally unsustainable with the current structure, so they need to do something about it if we want to stay a world power



  • @Machpants said in Silver Lake buying a stake in the ABs?:

    @Victor-Meldrew is not covid related, it was talked about before. NZ rugby is totally unsustainable with the current structure, so they need to do something about it if we want to stay a world power

    Covid certainly didn't help (NZRU had a bit stashed away for a rainy day) but yes I do think that they need to restructure the business model. Profits mean players ultimately. Selling part of the business to private enterprise though...not convinced.

    This is a bit out there, but I wonder how they would go with an IPO and a share of the business was distributed to the NZ population. I would buy in even knowing that I would get little or no ROI but I would get to keep my rugby team.

    The odd thing about the finances is the NPC seems to be a major drain on cash and yet it is where our player base comes from as well as a lot of the fan support. All very difficult.



  • @Snowy yeah I think WR had offered cash to the Unions, but NZ opted not to take thier's just yet?



  • In fern tradition, I haven't read the article. It's cricket season, good time to release depressing news like this.

    I'd rather nerd out on cricket stats than read a depressing article about private equity in the All Blacks. I'm going to assume it isn't true ... sometimes foreign media use the terms "All Blacks" and "NZRU" as meaning the same thing, I'm going to hope NZRU are looking for equity for a competition, not the team ... please?

    Would it even be legal? Form a WR perspective? NZRU have 3 votes on the world council, as a representative of NZRU which is a representative of the provincial unions which are are representatives of the clubs.

    Could we go all 1990 retrospective a-la every post from MN5 and speculate on a Rupert Murdoch buying 3 SARU votes from rugby-hating ANC stooges? etc etc



  • @taniwharugby said in Silver Lake buying a stake in the ABs?:

    @Snowy yeah I think WR had offered cash to the Unions, but NZ opted not to take thier's just yet?

    Hadn't heard that. Any idea what the terms were? Why would you not take it...



  • I'd rather NZRU just gave up on competing at sub-national level, settled for top players being foreign based. Come back to play test rugby.

    Obviously will play less tests per year (fine with me).

    Then, if they are playing for foreign clubs I don't give a shit about, I won't even need to be angry ever again about terrible bland tribeless franchise rugby kits. Sub-national rugby has become so identity-less that I don't really care anymore.



  • @Snowy said in Silver Lake buying a stake in the ABs?:

    @taniwharugby said in Silver Lake buying a stake in the ABs?:

    @Snowy yeah I think WR had offered cash to the Unions, but NZ opted not to take thier's just yet?

    Hadn't heard that. Any idea what the terms were? Why would you not take it...

    It's just bringing forward the payout from RWC years, where the Big 10 tier 1 unions get 'compensated' for not playing November and June EOYTs in a RWC year.

    So, ARU had a cashflow crisis, WR paid them their future income 3 years early.

    NZRU hasn't as they had 5 x this amount in their own reserves.

    Just Australia and Wales, I think, have tapped it.
    There is a separate, much smaller, pot. That WR have created as a covid crisis fund for tier 2s. I believe.



  • @Snowy what he said 🙂



  • @Machpants said in Silver Lake buying a stake in the ABs?:

    @Victor-Meldrew is not covid related, it was talked about before. NZ rugby is totally unsustainable with the current structure, so they need to do something about it if we want to stay a world power

    Thanks. Is it the structure, the money from Silver Lake or both?



  • I'm not going to read up anything on it, until there is local source. I assume the sky link above is sky UK?

    As I say, foreign media mixing "All Blacks" and "NZRU" means I'll probably just get unnecesarily annoyed.

    If there's a local source other than a crap NZ website quoting parts of a foreign article, then please post on here.



  • @Rapido said in Silver Lake buying a stake in the ABs?:

    other than a crap NZ website quoting parts of a foreign article

    jeez, why do you come here then 😉





  • @Kiwiwomble said in Silver Lake buying a stake in the ABs?:

    NZ Herald?

    He didn't want a crap NZ website...



  • @Snowy missed that bit....



  • @Kiwiwomble said in Silver Lake buying a stake in the ABs?:

    @Rapido

    https://www.nzherald.co.nz/sport/rugby-new-zealand-rugby-in-talks-with-private-equity-firm-silver-lake-in-mega-deal/C4FPWKM3V734JPDZAFWOG2QDCE/

    NZ Herald?

    Thank you.

    With the realisation that NZ Rugby's financial model can no longer rely solely on the All Blacks to fund the game, a high ranking NZ Rugby source explained how a private investment could be carried out.

    "You would set up a subsidiary company of NZ Rugby and get investment into that company in some form of partnership," the source told the Herald in May. "You put commercial assets into that company — whether that's in combination with Sanzaar partners and something like Super Rugby in its reincarnated form, or the Rugby Championship.

    and

    Following the Herald's report, which stated negotiations with Silver Lake and other private investment firms would resume once Super Rugby's future had a firm blueprint, Sky News UK now suggests a 15 per cent stake could be sold.

    That's what I thought.

    Some NZRU and maybe SANZAAR cmpetitions. Not 'The All Blacks'.

    Panic over.

    Good old useless foreign rugby media and use of the term All Blacks. A BBC article I read last year made it sound like the All Blacks teams were in financial negotiations in the build up to a test match. Would have needed to select Ben from Accounts.



  • $2B for a 15% stake would make the ABs worth over $13B?

    Doesnt seem right.



  • @taniwharugby said in Silver Lake buying a stake in the ABs?:

    $2B for a 15% stake would make the ABs worth over $13B?

    Doesnt seem right.

    No, it doesn't.

    But even more, not right, for just a stake in the competitions.

    Panic re-commenced.



  • @Rapido said in Silver Lake buying a stake in the ABs?:

    @taniwharugby said in Silver Lake buying a stake in the ABs?:

    $2B for a 15% stake would make the ABs worth over $13B?

    Doesnt seem right.

    No, it doesn't.

    But even more, not right, for just a stake in the competitions.

    Panic re-commenced.

    It's not $2B for the 15% - I think they're saying NZRU in total is $2B:

    NZ Rugby's entity has been tentatively valued at US$2 billion ($2.79b NZD).

    So, they're saying they might carve a bit of that out, into it's own entity, and sell 15% of THAT... was my impression.
    In general, the quotes from the "high ranking NZ Rugby source" - suggest that they're going to be very careful that there's zero foreign ownership of the actual NZRU/ABs... keeping this stake/investment fairly well firewalled.



  • @Kruse They cannot sell the NZRFU as it is not owned by paid employees of that organisation. It is simply a body set up to organise and administer rugby in NZ and is effectively owned by the financial (and Life) members of each and every club affiliated to a provincial Rugby Union that is also affiliated to the NZRFU (and there are none that aren't!). .
    They might be able to sell off or pledge assets/intellectual property or interests in things they own or run (eg broadcasting rights to the NPC, naming rights to teams or competitions etc) but they cannot "sell" part of the governing body as it is, in effect, a "Co-operative".



  • Unless the NZ government comes to the rescue, NZR (like other nation unions and many sports organisations) is going to need a lot of investment to make up for revenue lost in the Covid-19 crisis. Silver Lake has a very strong track record of successful investments (Skype, Dell, UFC, Twitter).

    For me, the chief stakeholders in New Zealand Rugby will always be the players and the fans, especially those closely involved in grassroots and Heartland Rugby. But if the piggy bank is so empty that Private Equity's involvement is necessary for competitive Rugby to survive in New Zealand then Silver Lake are a good organisation to be speaking to.



  • @sparky Investment firms don’t give money away for free. They will want a return that is greater than current owners (Clubs & Provinces). No one can just magic new revenue sources out of nothing - so the plan has to be good and the chosen partner has to add value to that plan. I note the digital media stuff.

    For me the worry is that the plan will be non existent and something will be lost.

    I worked for Telecom (Spark) when it was sold to the Americans in the 80’s with the same type of story - they would magically bring investment and knowledge and the company would do wonderful things. All that happened is they bought a monopoly for a song - just after the Government had upgraded its network ( to digital exchanges at that time ). So with no major new investment required for the foreseeable future, and a rising share market they just cut costs (people) milked the company (read NZs ) for dividends and sold their shares at the top of the market. Best investment ever for them but they really added no long term value - they were nothing special. Still remember sharing the lift with the big Texan CEO of Telecom Auckland in his boots and smoking cigars - they just came and went.

    So when the story is we need the foreign investment I say bullshit to that. Show me first how they will grow our revenue streams and why only they can do that for us and why they require ownership rights? It’s all fairies and unicorns - but with a good (?) chance they will just end up just being blood sucking leeches.

    Just waiting for the full story but a little bit skeptical



  • @Rapido said in Silver Lake buying a stake in the ABs?:

    I'd rather NZRU just gave up on competing at sub-national level, settled for top players being foreign based. Come back to play test rugby.

    Obviously will play less tests per year (fine with me).

    Then, if they are playing for foreign clubs I don't give a shit about, I won't even need to be angry ever again about terrible bland tribeless franchise rugby kits. Sub-national rugby has become so identity-less that I don't really care anymore.

    This is the crux of it for me too. What do they need the capital for? If it is just to prop of recurrent expenditure (player salaries, the franchises etc) and they don't intend to change the model then what is in it for Silver Lake?

    If the model is going to be changed it's not clear why we would need additional capital to let players play overseas, cull unions or pull out of SANZAAR and auction off our test matches etc. If we were trying to renationalize the structure I could understand why you would need that injection.



  • @rotated To me sub national rugby is everything. You undermine that and in 10-15 years the ABs will be also rans on the field and we will all be watching English football. When the ABs become a team of rich pricks coming back from Europe a few times a year then it’s game over for me as a spectator.



  • @kev said in Silver Lake buying a stake in the ABs?:

    @rotated To me sub national rugby is everything. You undermine that and in 10-15 years the ABs will be also rans on the field and we will all be watching English football. When the ABs become a team of rich pricks coming back from Europe a few times a year then it’s game over for me as a spectator.

    Need to protect the grassroots



  • @canefan said in Silver Lake buying a stake in the ABs?:

    @kev said in Silver Lake buying a stake in the ABs?:

    @rotated To me sub national rugby is everything. You undermine that and in 10-15 years the ABs will be also rans on the field and we will all be watching English football. When the ABs become a team of rich pricks coming back from Europe a few times a year then it’s game over for me as a spectator.

    Need to protect the grassroots

    Seriously wonder though, you could sell stakes in nzr for$1k each...30,000 folks and you've got$30M to play with. Honestly, I'd support to keep us out of the hands of venture capital in exchange for support, half price tickets and no voting rights👍👍



  • @nzzp said in Silver Lake buying a stake in the ABs?:

    @canefan said in Silver Lake buying a stake in the ABs?:

    @kev said in Silver Lake buying a stake in the ABs?:

    @rotated To me sub national rugby is everything. You undermine that and in 10-15 years the ABs will be also rans on the field and we will all be watching English football. When the ABs become a team of rich pricks coming back from Europe a few times a year then it’s game over for me as a spectator.

    Need to protect the grassroots

    Seriously wonder though, you could sell stakes in nzr for$1k each...30,000 folks and you've got$30M to play with. Honestly, I'd support to keep us out of the hands of venture capital in exchange for support, half price tickets and no voting rights👍👍

    I’d invest in a heartbeat.



  • AFC Wimbledon ran a bond scheme

    This meant there was a min spend of $1000 but you could put in more if you wanted and choose the term length (3 - 20 years) and the return (0-3%) so those that just wanted to help could put it in for 0% and 20 years but those that wanted to help but may not have been able to afford just to give the cash got a small return

    we raised 7 Million quid (over $12M) in maybe 6 months, I imagine the AB's would have much more pull than a small league 1 football club



  • @Rapido said in Silver Lake buying a stake in the ABs?:

    I'd rather NZRU just gave up on competing at sub-national level, settled for top players being foreign based. Come back to play test rugby.

    Obviously will play less tests per year (fine with me).

    Then, if they are playing for foreign clubs I don't give a shit about, I won't even need to be angry ever again about terrible bland tribeless franchise rugby kits. Sub-national rugby has become so identity-less that I don't really care anymore.

    I'm 100% the opposite to this. That would be me almost done as a rugby fan. Would I have to get back into cricket? Become a soccer fan? Get Fox back on so I can watch the Worriers?

    Ah fuck, I'm about to slink off into a deep depression.



  • @Nepia said in Silver Lake buying a stake in the ABs?:

    Get Fox back on so I can watch the Worriers?

    Shit man don't do that. Depression can deepen.



  • @nzzp said in Silver Lake buying a stake in the ABs?:

    @canefan said in Silver Lake buying a stake in the ABs?:

    @kev said in Silver Lake buying a stake in the ABs?:

    @rotated To me sub national rugby is everything. You undermine that and in 10-15 years the ABs will be also rans on the field and we will all be watching English football. When the ABs become a team of rich pricks coming back from Europe a few times a year then it’s game over for me as a spectator.

    Need to protect the grassroots

    Seriously wonder though, you could sell stakes in nzr for$1k each...30,000 folks and you've got$30M to play with. Honestly, I'd support to keep us out of the hands of venture capital in exchange for support, half price tickets and no voting rights👍👍

    Join a club?


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