All Black deal with Silverlake goes through

[Guy Smiley]

link

New Zealand Rugby's provincial unions have signed off the $200 million Silver Lake deal.

The 26 provincial unions cast 90 votes via secret ballot, with only one vote against the deal, at NZ Rugby's Auckland headquarters.

NZ Rugby chairman Stewart Mitchell said it was a "monumental moment" in the history of NZ rugby.

The deal will see $37m distributed immediately with the 14 NPC teams receiving $1m each, 12 heartland unions $500k each ($6m total), Māori rugby $2m, community clubs $7.5m, Players' Association $5m.

In addition to the $200m deal, there will be an opportunity for NZ institutional investors to raise $62.5m and $100m. If there is insufficient institutional demand, Silver Lake would increase its position to ensure a minimum capital raise of $62.5m.

Good. Now we can finally get on with dominating the world of rug.... oh

[Kiwias]

Is there a possibility that hidden somewhere deep in the smallest of small print a condition that the payments will only be made after Foster is no longer the coach?

[Guy Smiley]

Is there a possibility that hidden somewhere deep in the smallest of small print a condition that the payments will only be made after Foster is no longer the coach?

I had a text conversation with a mate on this today, I sent him the news and our chat, surprisingly perhaps, turned to the price of a hitman.

[Gumboot]

It'll be interesting to see how this all plays out, but that genie out of the bottle stuff in the PWC report has to be a concern long term.

[Ymx]

I actually can’t believe it has happened.

His chief executive, Mark Robinson, added: “Different people will have different views on whether it’s the most significant [moment in our game], but we think it’s hugely exciting. There have been other junctures that have demanded huge amounts of attention, but this is for us a monumental step forward for the game, and one that provides great opportunity.”

Most significant moment in our game, and most significant bonus of his. Blimey he’s truly been spellbound.

NZRFU now need to make additional profit to stay afloat.

US market. Yep, really, that’s viable. They don’t give a shit about rugby, or the draw of it being played by a quaint island in the South Pacific.


Sorry, rant over

[Ymx]

My only hope is that this holding (when Silverlake sell in a few years) gets converted to a public NZX listing.

[Guy Smiley]

There’s no such thing as the NZRFU.

[Grandpa]

My only hope is that this holding (when Silverlake sell in a few years) gets converted to a public NZX listing.

And when Silver Lake sell their share... all their "expertise" goes with them? And what restrictions are there around who they sell their equity to?

[Guy Smiley]

You guys know that SL don’t own any part of the ABs or NZR, right?

[Ymx]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

[Gumboot]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

Yep.

[Grandpa]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

Yep.

And anything to stop them selling their share in that to Putin in 5 years time... ?

[Guy Smiley]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

I’ll say it again… there is no such thing as NZRFU.

The deal was to set up a seperate corporate entity that SL partner up with NZR in. That entity is the vehicle to drive revenue from whatever material NZR generate that will fuel income.

SL don’t get their hands on anything inside NZR.

The risk is what happens to that entity should SL decide to sell out down the track. Even then, there is no risk to NZR itself, only to whatever share they have in the seperate company and how that material it owns is used.

It’s about leverage.

[Gumboot]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

Yep.

And anything to stop them selling their share in that to Putin in 5 years time... ?

They may have a much bigger share to sell by then. Or they may just cut their losses and put their bucks elsewhere. Or they may do something else. But whatever they decide to do, it'll be on their terms, not the NZRFU's.

[Knoath]

My issue is they where looking to buy into the AB's at their peak. They are nowhere near that now and looking to go further down the rankings with current set up, what's the bet, they have an escape clause, ummmm your sh t no one wants to watch you, we can’t sell sh.t see ya and pay up.

[Ymx]

NZ Rugby would control the board of CommLC, but the appointment or termination of its chief executive, chief financial officer and chair, as well as transactions worth more than $100m and loans of more than $50m would require Silver Lake’s approval, the consultant said.

Not to mention the enhanced voting rights they have secured. This is a typical PE trick to hamstring an exec board.

[Ymx]

NZRFU

[Ymx]

They own a slice of the revenue generating assets of the NZRFU. AB generated revenue is a major part of that. And well it’s pretty much the important part of it.

I’ll say it again… there is no such thing as NZRFU.

The deal was to set up a seperate corporate entity that SL partner up with NZR in. That entity is the vehicle to drive revenue from whatever material NZR generate that will fuel income.

SL don’t get their hands on anything inside NZR.

The risk is what happens to that entity should SL decide to sell out down the track. Even then, there is no risk to NZR itself, only to whatever share they have in the seperate company and how that material it owns is used.

It’s about leverage.

The thing they get their hands on inside of the NZRFU is the revenue it generates. That’s a pretty key thing to have your mits on inside an entity.

[Gumboot]

NZRFU

[Grandpa]

NZRFU

Think he means NZ Rugby Fuck Up...

[Gumboot]

NZRFU

Think he means NZ Rugby Fuck Up...

Could be, it's what most of us probably expect at this point.

[Ymx]

I like it.

NZR-FU have sold a percentage of the revenue, not the profits. So it’s a lot worse than it sounds.

The money losing entity now need to make up an extra 8% profit, on top of turning the loss, just to keep positive.

[Grandpa]

I like it.

NZR-FU have sold a percentage of the revenue, not the profits. So it’s a lot worse than it sounds.

The money losing entity now need to make up an extra 8% profit, on top of turning the loss, just to keep positive.

Clever negotiation by them.... they can do nothing and still rake in money... it shouldn't even have been a percentage of profits either.. should have been a percentage of "growth" in profits... they only earn on what they improve...

[Ymx]

Factor that 8% in to this

[Guy Smiley]

sold a percentage of the revenue, not the profits. So it’s a lot worse than it sounds.

No, they haven't.

Silver Lake, a United States-based global technology investment firm, will pay $200m for a minority ownership percentage of between 5.71% and 8.58% in NZR CommercialCo – containing all the revenue-generating activities of the organisation.

Later in 2022, an additional co-investment of between $62.5m and $100m will be offered to New Zealand-based institutional investors, with Silver Lake underwriting (and increasing its stake) if it is not fully subscribed.

They've set up a seperate entity that will control the revenue. SL don't have control of that, they have a share of it... a minor share at that.

The advantage that such a set up should deliver is increased revenues, SL's expertise is the benefit in that area. What we need to see from NZR is an improvement in their own in house expertise so that they're not wholly dependent on SL, they should seek to learn from and benefit by the set up. They also need to be in a position to act on their own if need be, should SL look to sell their share. NZR should have first option on that if it comes up.

[Gumboot]

Next step, the eBlacks?

[Ymx]

In 2018 take the revenue 189m, 8% of which is 15m

That would turn it in to a loss of (16.9m)

For 2020 it would be 11m, and a loss of (29.7m)



I really hope I’ve got this wrong!

[Ymx]

I’m assuming Silverlake won’t be taking cash out of the system, therefore the value of their shares will grow as a percentage of the tot of CommLP much like the way pref shares work.

I hope I’m wrong.

[JM2K6]

The funds for the various sub-SuperRugby levels look good, no? Could do a great amount for semi pro, amateur, and community game.

[Enzedder]

Factor that 8% in to this

Go back a couple more years - you have factored in Covid which shouldn't factor any more

[Guy Smiley]

The funds for the various sub-SuperRugby levels look good, no? Could do a great amount for semi pro, amateur, and community game.

Yes, absolutely...provided we have good governance of those sub groups. Hopefully some sort of template could be agreed on to assist smaller unions with decision making although naturally, they'll have differing needs.

The benefits of the deal seem to be overlooked in a sort of generalised opposition to big business.

[Jimmy Smallsteps]

I wonder who the solitary union was that voted against the deal?

My guess is Buller.

[Guy Smiley]

I wonder who the solitary union was that voted against the deal?

My guess is Buller.

I'll go with South Canterbury... Timaru Council was the first to vote to leave the Local Government body over objections to Three Waters. The mistrust and hate runs rich and strong in the shadow of the hills.