John Roughan: NZ Rugby and the Silver Lake, super league conundrum

What exactly does the rugby union plan to do with the $387 million it will receive if it sells a share in the All Blacks? I’ve been reading all the discussion of the Silver Lake proposal on the sports pages and haven’t seen this question asked or answered.

More worrying, I’ve asked a rugby club administrator and he didn’t know the answer either. He said he’d asked that very question in a briefing by his provincial union and nobody could answer it.

It’s the first question a prospective investor would ask. If a business wants to raise additional capital it needs to declare fairly precisely what it proposes to do with it. Or the prospective investor may have a proposal exciting enough to convince the business to give it a share of the company.

Yet all we know of this proposal is that Silver Lake is a Silicon Valley private equity investor in sports venues and teams as well as technology stocks, and NZ Rugby is said to be in a desperate financial situation, having taken a $40 million hit from Covid-19 last season.

No wonder the players’ association is nervous. Rugby bosses appear to have entered this deal as supplicants rather than businesslike owners of one of the strongest sporting brands in the world. And NZR’s dependent provincial unions behaved like the supplicants they are when they voted unanimously to support a deal they know so little about.

The absence of a stated plan for drastic change is all the more surprising because conditions are ripe for one. Like many disrupted industries, rugby has been confronted with facts it had to face eventually.

It knew the international competitions devised at the outset of its professional era had outlived their appeal. Covid-19 has cleared the slate of international commitments and reminded us of our game’s domestic strength.

When sports turns professional they tend to forget the local identities, loyalties and social life that gave rise to the sport. All professional codes have just received a salutary reminder of those fundamentals from English football fans.

When the owner of a few prestigious clubs in the English Premier League proposed to set up an elite league with others in Europe last month, even their own fans revolted. The fans didn’t just value their club, they valued local rivalry.

The Economist saw the proposition as an attempt to foist American sporting culture on Europe. It celebrated a banner carried by a Chelsea fan that declared, “We want our cold nights in Stoke.”

The owners, American in some cases, quickly cancelled their plans for a European Super League and the outcry has had obvious resonance in New Zealand right now. But there is one big difference. New Zealand entered rugby’s version of a Super League at the dawn of its professional era, 25 years ago.

A quarter of a century is long enough to discover what works and what doesn’t, and Super Rugby hasn’t.Seeing teams from places such as Natal and Transvaal was an exciting prospect if you had grown up listening to crackling broadcasts from South Africa, but it turned out that matches between local franchises attract bigger audiences.

So why not build on that? Under border closures, Super Rugby Aotearoa has been produced intense contests, possibly too intense for the players’ welfare. But five teams are not enough. It ought to be possible to produce a premier competition of 8-10 professional teams in New Zealand based on provinces, bearing their names.

Silver Lake, which has a stake in one of the clubs involved in the European Super League debacle, might be ready to consider the possibility that New Zealand rugby has the potential to stage a domestic competition that could command international interest.

If Silver Lake will not invest in that possibility, we find enough savings in this country. Super Rugby has been a financial disaster. None of the franchises makes money, not even the ever-successful Crusaders. It has been years, I’m told, since Christchurch clubs saw any money from the Crusaders.

If franchises no longer faced the cost of flying teams halfway around the world every season the savings might enable a bigger domestic league to be developed. And if it attracted enough international interest the television and streaming rights could give NZ Rugby another revenue source.

Right now the All Blacks are NZR’s only source of funds for the entire game in this country. They carry an image that is immensely valuable not only for rugby but for New Zealand. Mention where you come from in most countries and the one thing people know about New Zealand is the All Blacks.

They are probably better known than the game they play. It’s not hard to believe an investor could have a plan to tap more value in the brand but let’s hear it.

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