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All Blacks Valued At $2 Billion As Private Equity Investment Nears

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New Zealand’s rugby union team, known to the world as the All Blacks, are close to agreeing a private equity investment deal with California private equity fund Silver Lake, according reports emerging from Auckland. 

The New Zealand Herald first reported the story in May last year, but in recent days, they, along with Sky Sports New Zealand, have been quoting sources that suggest that the pace of talks has ramped up, with a valuation of $2 billion placed on the All Blacks.

Silver Lake, who are frontrunners to make the investment, are thought to be looking for a 15% stake in NZ Rugby. The private equity fund has an existing sports investment in City Football Group, the holding company of Premier League club Manchester City, and was part of a consortium that bought out the UFC mixed martial arts promotion.

NZ Rugby is the governing body of the sport in New Zealand and has been in financial distress due loss of income caused by Covid-19. Speaking last year, chief executive Mark Robinson said that NZ Rugby had exhausted half of its cash reserves during the pandemic and was in need of new revenue streams.

According to the Sky Sports, the deal would be for a stake NZ Rugby’s commercial arm, which in practice means the All Blacks. 

"You would set up a subsidiary company of NZ Rugby and get investment into that company in some form of partnership,” said the insider source quoted in the NZ Herald. “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.”

Sanzaar is the governing body of rugby union in the Southern Hemisphere and includes NZ Rugby, along with its equivalents in South Africa, Australia and Argentina. Together, they administer the Super Rugby club competition and The Rugby Championship, between their respective national teams. 

The confederation has been a sore point in recent years, as South Africa increasingly orients around European rugby—which is on a more convenient TV time zone—and Australia’s rugby union continues to lose ground domestically to the National Rugby League (NRL). 

The travel issues caused by Covid-19 saw Super Rugby reduced to domestic competitions and The Rugby Championship proceed without South Africa. Now, New Zealand seem to be taking financial matters into their own hands.

"We've got to get revenue streams and we can't afford to fund those ourselves,” said the insider. "Certainly at the Super Rugby level, our financial model there is under huge pressure, both the competition and our teams. We're grossly under-capitalised. That's a critical area."

Private Equity has already caused significant disruption in Northern Hemisphere rugby union, where CVC Capital Partners have made investments into the Six Nations international tournament and the Gallagher Premiership and Pro14 club competitions. 

Rugby union fans in Europe have recently been angered by attempts, thought to have been instigated by CVC, that have seen the Six Nations in danger of being taken off free-to-air television in the U.K. and put behind a TV paywall as soon as 2022.

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