New Zealand Rugby has had talks with private equity firms Silver Lake and CVC Capital Partners about investing in Southern Hemisphere competitions and a Club World Championship.
The New Zealand Herald on Saturday broke the news of the talks. It quoted a source from NZR as saying the discussions were on hold during the Covid-19 lockdowns, and that any deal was “miles” away from being signed.
But the source said that they had revolved around setting up a subsidiary company of NZR and putting commercial assets into the company, possibly in combination with other Sanzaar rugby unions, and would involve “something like Super Rugby in its reincarnated form, or the Rugby Championship”. The Herald report went further and said “the attraction for investors would be the prospect of a Club World Championship”.
A world club competition has been mooted by other sources recently, as part of wider discussions about the future shape of the global rugby calendar. These discussions are being driven in part by interest in rugby from private equity firms including CVC, which has stakes in the English Premiership and Pro14 European club competitions, and is planning a £300m investment in the Six Nations national team competition.
Talks between CVC and NZR were reported by the Financial Times last month. The private equity company was also reported to have had discussions with Rugby South Africa.
Last month, leading European rugby stakeholders including European Professional Club Rugby and the French Rugby Federation indicated they have also been part of talks about a world club tournament.
The weekend’s New Zealand Herald report suggested that NZR’s private equity talks could lead to some form of split between the organisation and world governing body World Rugby. The newspaper said that hopes for change in rugby were “dealt a blow” with the re-election of Bill Beaumont as World Rugby chairman last week, “a move seen as…suited to entrenching the status quo”.
Some Southern Hemisphere unions had backed Beaumont’s Argentine challenger Agustin Pichot. “It is also a result some insiders believe could set NZR on a separate course from World Rugby, particularly if issues such as revenue sharing are not swiftly addressed,” the Herald reported.
The NZR is reported to be keen to make its revenue model more robust. The source that spoke to the Herald said: “NZ Rugby making multi-million-dollar losses [that are] covered every 12 years by the [British and Irish Lions tour] … it’s gone, we have to change it completely.” The organisation is also concerned that revenues might dip if the national gets knocked off its perch as the best in the world.
Last week, NZR announced it is laying off half of its full-time staff due to the effects of the Covid-19 pandemic. It has already projected a 70-per-cent drop in revenues this season.