'We we will not grant approval' - Players' union pen shock letter to NZR over multi-million dollar equity sale
The organisation representing New Zealand’s professional rugby players have sent an explosive letter kiboshing a proposed 15 per cent sale of NZR.
Earlier this year an American tech giant – Silver Lake – tabled NZ$465m for 15 per cent of the money-generating side of New Zealand Rugby in the latest global private-equity play to hit the sport.
However, the NZRPA – who represent many of the countries highest profile All Blacks – have hit by back at the deal, penning a letter to the NZR in which they say they will not sanction such a move at the current time. The New Zealand Herald released the letter this weekend, which represents the views of board members which include current All Blacks Sam Cane, Sam Whitelock, Aaron Smith and Dane Coles.
The eight-page letter reads: “We had expected we would wait until the process had run its course and NZR had presented a full and complete proposal to NZRPA before assessing the proposal and granting approval or not. However, on the basis of information known to NZRPA today and the analysis and assessment of that information, we have concluded that we will not grant approval for the restructure and sale proposed by NZR and believe we should communicate that conclusion to you now.
“The decision to not grant approval to the restructure and sale of a minority interest in New Zealand Rugby has been arrived at after careful consideration by the board of NZRPA. The Board of NZRPA consists of 3 independent directors, one executive director and 10 player representatives, drawn from the All Blacks, the Black Ferns, the All Black Sevens, the Black Fern Sevens and the Super Rugby franchises.
“The remainder of this letter sets out our reasons for not approving the NZR proposal and outlines an alternative approach we believe NZR should investigate and pursue.
The NZRPA point out that they believe there is no need to sell 15 per cent of it capital to raise funds and that ceding veto rights to Silver Lake is not acceptable.
In one of the letter’s strongest sections, the players’ union outline how the deal could hurt the relationship between rugby union and the wider New Zealand public; titled: “Loss of the special and distinctive relationship between New Zealanders and New Zealand’s representative rugby teams.’
“The relationship between New Zealanders and the All Blacks, the Black Ferns and other representative rugby teams is difficult to put into words, but we all understand it to be a special bond related to New Zealand pride and identity.
“New Zealand’s rugby players play for themselves, their family and their country with a commitment to success that is demanded by history and required by legacy. New Zealand’s rugby fans understand this commitment and see in it the essence of what, from one perspective, it means to be a New Zealander.
“This, above all, is what NZR is selling and Silver Lake are buying. 129 years of history and talent and results that record extraordinary success, achieved only because of who we are and what rugby means to us. No one else has done it. No one else could have done it. We believe there is a risk that this special bond and the nature of what rugby means to New Zealanders, players and spectators alike, is at risk in the proposed transaction.
“In addition, as you know, Maori and Pacifica culture is woven deeply through the fabric of New Zealand rugby’s brands, reputation and revenue generating assets. We know many players are, and believe many other New Zealanders would be, uncomfortable with the thought that NZR was selling income-generating assets that relied, in part, upon cultural practises and understandings that they consider not for sale under any circumstances. There is an inherent risk of real or perceived cultural misappropriation given Silver Lake is an Anglo-American private equity firm.”
The NZRPA also believes the deal will lead to an inevitable financial conflict of interest, citing World Rugby’s failed 6 billion pound deal with a Swiss marketing firm, which they say was a result of CVC’s deals with various unions and leagues.
“It is clear to us the establishment of an unbreakable partnership with one private equity firm will place constraints on the ability of NZR to maximise value independent of that private equity partner in the future. NZR’s future options will be materially reduced by committing itself to deal only in circumstances that satisfy Silver Lake as well as NZR. It is therefore likely NZR will forego future value as a result of its commitment to Silver Lake.
“As an example of value foregone because of prior alignment to a private equity party we give the failure of the Nations Championship.
“Last year, World Rugby was forced to drop a £6bn deal with In front, a Swiss marketing agency, to create a new annual tournament dubbed the Nations Championship. The concept failed partly because it would have forced the countries that compete in the Six Nations to abandon their deal with CVC.”
“We accept that many other issues needed to be resolved for the Nations Championship to proceed but the conflict of interest between the national rugby unions and CVC was clearly a contributing factor.”
The New Zealand Rugby Players’ Association was founded by New Zealand’s professional rugby players as their independent representative body in 1999.
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