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Rugby Australia makes private-equity offer to smooth NZR talks

MELBOURNE, AUSTRALIA - JUNE 04: TEN Chief Executive Officer and Managing Director Hamish McLennan speaks to the media at the Melbourne Cricket Ground on June 4, 2013 in Melbourne, Australia. Cricket Australia today announced a historic $590 million broadcast deal with the Nine and Ten networks that will see Tests, one-dayers and the Big Bash League shown on free-to-air TV. (Photo by Quinn Rooney/Getty Images)

Rugby Australia chairman Hamish McLennan has said he will offer New Zealand Rugby a bigger slice of any private equity investment in a revamped Super Rugby, as part of ongoing talks between the unions over the future of the competition.

Recently-appointed RA chairman McLennan is eager to establish a competition with neighbours New Zealand from 2021. The ‘trans-Tasman’ set-up under discussion would cut the extensive travelling commitments of the current Super Rugby tournament by excluding South African and Argentinian teams, and also help relieve the financial burden of the Covid-19 pandemic.

The talks have produced friction between RA and NZR. McLennan said last week that NZR was trying to dictate terms in a way that “feels a bit master-servant at the moment.”

Over the weekend, McLennan told the Sydney Morning Herald: “More teams equal more broadcast dollars, which will lead to private equity investment if that’s the way we decide to go…I think even if the Kiwis got slightly more of a return out of that investment that would be entirely fair, and we both need more investment into our respective unions.”

Both countries’ unions have recently attracted interest from private equity investors. SportBusiness reported last month that US-based private equity firm KKR is in early stage talks with Rugby Australia about an investment in the sport. KKR is said to be in talks with both Rugby Australia and the Melbourne Rebels, the Super Rugby team, about a stake worth “hundreds of millions of [Australian] dollars.”

NZR has had talks with private equity firms Silver Lake and CVC Capital Partners about investing in Southern Hemisphere competitions and a Club World Championship.

NZR has been reviewing its participation in Super Rugby in a process named ‘Aratipu’. According to a report by New Zealand media agency MediaWorks, one of the options under consideration is a new competition involving Australia, New Zealand, and “a team from the Pacific”.

Former All Blacks coach Steve Hansen told local media he wants NZR to stand firm in negotiations with RA. Hansen told Stuff Media: “Without being controversial, we have been looking after the Aussies for years, and every time we have required something from them, particularly at a high level, sometimes they have gone missing.”

His views were backed by Waratahs’ coach Rob Penney who says New Zealand must be careful over its rugby relationship with Australia.

In a bid to ease the friction RA’s McLennan told the Herald there was a bigger picture to keep in mind.

“This runs the risk of turning into a squabble where everyone begins to forget what they were fighting for in the beginning,” he said.