All Blacks captain Sam Cane with fans after the second Bledisloe Cup test match between the All Blacks and Australia at Eden Park, in October 2020. Photo / Brett Phibb
On Thursday, New Zealand Rugby is expected to sign off on a $200 million partnership with US investment firm Silver Lake. In the third instalment of a five-part series, Gregor Paul looks at what
it means for professional rugby
Since New Zealand Rugby began its courtship with Silver Lake, there have been two misconceptions about how a private-equity deal could affect the professional game.
Credible voices have suggested that the richest players will become richer and that the All Blacks will be asked to squeeze yet more tests into an already crammed calendar.
There is some truth to the first point as there will be more money available to pay the players.
That, however, is not because the players will take a large chunk of Silver Lake’s initial $200m investment, but because they have a revenue-sharing arrangement.
Under the terms of the collective employment agreement between the players and New Zealand Rugby, 36.5 per cent of the latter’s revenue is placed in what is called the Player Payment Pool (PPP), which is the fund from which all the players’ salaries are drawn.
The more NZR earns, the more the players earn; if Silver Lake’s arrival does generate a transformational lift in annual income, the professional game will directly benefit.
Some of that money will be used to retain talent and with demand for Kiwi players high in Japan and France, inevitably there will be wage inflation and yet higher pay packages for the best-known to keep them in New Zealand.
But while the pot will grow, so too will the mouths it needs to feed and it is emerging female athletes who could be the greatest beneficiaries of Silver Lake’s arrival as one of the key priorities will be to grow Super Rugby Aupiki and the popularity and profile of women’s rugby more generally.
It has been suggested that the All Blacks will be asked to play more tests in ever-more exotic venues. NZR is adamant that is not part of the plan.
It is possible that some players will end up playing more games in future, but that will have nothing to do with Silver Lake.
NZR chief executive Mark Robinson has recently been in Dublin for World Rugby meetings and talks are advanced about recalibrating the international season to create a biannual competition known as the Nations Championship.
This would effectively see Japan and Fiji elevated to a six-team Southern Hemisphere top-tier who would play each of the current Six Nations teams in the July and November test windows.
The November window will be extended from three weeks to four to allow a final to be played between the two respective top teams. There are also advanced plans to create a world club championship where the winners of Super Rugby play the winners of the European Rugby Champions Cup.
These initiatives, should they get the go-ahead at a vote in November, are designed to lift the quality not quantity of rugby played and estimates out of the UK suggest the Nations Championship could see all 12 participants enjoy a 40 per cent increase in their current broadcast revenue.
“We have been really consistent that we see the [Silver Lake] opportunity as being able to create more value through playing the same amount or even less rugby,” says Robinson.
“We may well play the same amount of rugby in different parts of the world. No different to what we have already done with games in Japan, USA but a lot of our focus is to get the international calendar resolved because there are some great opportunities there.”
The likely reality for the male professional game is that Silver Lake’s presence will not burden the athletes with egregious physical demands, but New Zealand Rugby Players’ Association boss Rob Nichol, says the desire to put the fan at the centre of the game will be transformational for the players.
Competitions could have more intensity and value. The style of rugby encouraged will appeal to players as much as fans and an increased effort to better market the sport, could lead to greater endorsement and business opportunities for players.
US sports have become popular around the world by encouraging the athletes to be honest and authentic, to promote themselves on their own social-media channels and to not fear controversy or rivalry as they both drive audience interest.
New Zealand’s current generation of players are thought to be ready to embrace such a culture and respond favourably to new demands to promote and market the game more aggressively.
“The professional game will benefit from the commercial expertise and focus, global marketing, fan engagement and technology opportunities that we believe Silver Lake will be able to open doors to and help NZR build its capability in,” says Nichol.
“This will translate to stronger revenue growth than we have historically experienced, and that will ultimately flow back into the professional and community levels of the game to help maintain the legacy of top-level rugby in this country.”