The news that private equity behemoth Silver Lake would try to buy a 12.5% stake in the beloved All Blacks for $378m was nothing short of controversial when it came out.
Before we all have a knee-jerk reaction to PE getting involved in sport (oh the humanity!) let's first understand what Silver Lake are & what they are wanting to do with the All Blacks:
Silver Lake made a name for themselves providing "growth" capital to the tech space. This meant they wrote big cheques for companies which would IPO/sell out imminently
Their specialty has been providing much needed $$ to established management teams and have a lighter touch approach to getting involved in day-to-day operations (e.g. getting debt funding, forming partnerships with TV rights, checking the team are on-track)
Due to COVID-19 and poorly managed global competitions; NZ rugby has last c.$40m over the last two years
Grass roots rugby in NZ is underinvested in and their is a risk that the coaching IP which NZ holds so dearly is being overseas to countries like UK and Japan
Silver Lake will hold their interest for up to 10 years and then hopefully sell it at a profit
Right now, in Australia, there is also an underinvestment in grass roots and similar deals are being mooted by Rugby Australia
As referenced in this article, PE investing in sport is not necessarily a safe bet and well known Aussie PE outfit Archer lost big on their investment in Supercars
This being the case, if Australia could get funding which had a) longer term horizon, like Silver Lake, b) ability to include it on big TV-rights deals like NZ are chasing and c) Rugby Australia is willing to make fundamental changes to current management, PE could be exactly what the Wallabies need.
Perhaps the backer will be someone similar to CVC (who backed Northern Hemisphere rugby) but either way Rugby Australia which lost $27m last year need to consider their options.
Once the funding is sorted, we can set about re-building 'grass roots' rugby.
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