US private equity firm Silver Lake secured a NZ$200 million (US$134 million) stake in New Zealand Rugby and its famed All Blacks on Thursday after provincial unions overwhelmingly endorsed the deal following years of wrangling.
The vote by 89-1 ended a heated two-year negotiation that pitted rugby bosses against the players' association and provincial rugby unions, amid concern about selling off part of the country's culture to foreign owners.
Rugby is more than just a game in New Zealand and is seen as an integral part of the social fabric.
The All Blacks are regarded as national heroes, winning three of the nine Rugby World Cups, and are one of the most successful teams in world sport.
NZR chairman Stewart Mitchell hailed a "monumental moment in the history of rugby in New Zealand".
"It has taken us some time to reach this point and that is because our members care so deeply about our game, our communities, and our people," he said Thursday.
Right up until the vote, closed-door meetings were going on as New Zealand's 26 provincial unions sought assurances they would not be sidelined and there would be benefits for the game at the grassroots level.
The deal sees Silver Lake, a fund manager specialising in private equity investments and whose growing stable of sports interests already includes Manchester City, pay NZ$200 million for a 5.8 percent stake in a new commercial entity operated by NZR.
An additional investment of NZ$100 million will later be offered to New Zealand-based institutional investors and Silver Lake's holding could rise to 8.58 percent depending on the share uptake.
Silver Lake is expected to provide expertise in areas such as broadcast, sponsorship and digital technology innovations.
"Digital technologies are changing sports and media, providing a lot of opportunities for rugby, and we are ready to help go after them while respecting the values and traditions of the game in New Zealand," said Silver Lake managing director Stephen Evans.
- 'No magic bullet' -
Critics say the All Blacks have not capitalised on their marketability in a way other leading brands in sports such as Formula One and European and English football have done.
New Zealand Rugby was hit hard by the coronavirus pandemic, losing NZ$40 million in 2020, and its provinces have been losing money for several years as spectator and player numbers fall.
NZR chief executive Mark Robinson believes if money floods in under the Silver Lake deal it could enable a new pay structure with the players and provinces.
Rugby Players' Association chief executive Rob Nichol described the lengthy negotiations as "a thorough and robust process" with "the potential to be a very successful partnership and way forward for rugby in New Zealand".
Robinson said it would enable NZR to take the All Blacks to a wider audience, but cautioned that "it is in no way a magic bullet.
"We know there is still a lot of hard work to do and we know the Silver Lake team hold the same view."
Sport has become an attractive proposition for institutional investors in recent years, particularly in the United States and Europe, and rugby has not been immune.
Private equity company CVC last year paid £365 million for a 14.3 per cent stake in the Six Nations.
New Zealand Rugby's Mitchell also warned that the deal was not an instant cure.
"We've now got to sit down, work with a new board, make sure we get these business plans in place, make sure we perform to those business plans with our partners and reap the rewards that hopefully will come in the next four to five years," he said.