Opinion: Hello Silver Lake, goodbye All Black stars
‘If you cut player wages... expect top players exodus’
Argentina fans don’t get to see the magical Lionel Messi play except on their television sets. Brazil fans would have to hop on a flight to Paris to get a living glimpse of Neymar’s impossible skills. So why then is New Zealand Rugby so intent on doing a deal that risks many of its best players going overseas?
If you cut player wages, as the Silver Lake deal proposes, then it is logical to expect more and more top players to go overseas. And what then, because you can bet your bottom dollar that Silver Lake will want Beaudie and Richie playing for the All Blacks. They will be nudging NZR to change the rules on overseas representation, and then even more will head for the airport.
It’s lunacy. Sure, the All Blacks lost to Argentina for the first time last year, but that doesn’t mean wanting to become the South America of rugby. And yet NZR chairman Brent Impey is determined to push through this deal.
But this showdown with the players is very far from over. The proposed agreement with Silver Lake has alienated a lot of current players and has outraged many fine All Blacks leaders from the past. Expect to hear from a few of them in the coming weeks.
And let’s be clear here. The players don’t want a cent of the $375 million of the Silver Lake bid to own part of the company. Rob Nichol and David Kirk, the chief executive and president of the New Zealand Rugby Players Association, said on Monday.
Kirk, as successful off the pitch as he has been on it, is bemused why NZR would expect the players to think that this is a good deal. Kirk said, ‘‘Any business that sells 12.5 per cent of its revenue but keeps all its costs is in trouble. So the solution is to cut players’ costs. They say we’ll cut you by 12.5 per cent as well.
‘‘No employee in the world would say that because the bosses have decided to capitalise on future revenue, then they will happily take a pay cut. But if it happens, then it is totally logical that we will lose a higher percentage of players overseas. Then we will have gone the same way as everyone else in the world.’’
And that is not a good way. Due to the foresight and resilience of the late Jock Hobbs, New Zealand took control of its players when the game went professional. They did not lose them to the money men like so many of the fools who were in charge of the northern hemisphere unions back then. And look at the mess those countries are now in.
Kirk says, ‘‘All those clubs don’t run the game cost effectively. They get in bidding wars for the players. They go through their money. Then they bring in more private money. It’s a slippery slope.’’
It’s a very slippery slope and yet it is one that NZR seems determined to flail about on. And why? The game in this country is not in dire financial straits. It has ridden out Covid better than any other country in the world. And since the game went professional, year on year it has grown revenue by 8 per cent. As Kirk says, most businesses would be delighted by such an outcome. ‘‘New Zealand rugby is not broken as they keep trying to say,’’ he adds.
Far from it, and yet NZR wants to push through a deal that I wouldn’t mind betting is anathema to most New Zealanders. Don’t believe me? Well, back in 2013 a referendum was held about John Key’s plans to sell off New Zealand’s power companies. More than two thirds of voters said, ‘‘No, thank you.’’ And that was to Kiwi investors. Imagine what voters would think of selling off the All Blacks to a posse of Americans.
Nichol told me that one player had said to him: ‘‘We’ll probably do really well out of this. But what about our kids? They probably won’t play professional rugby in New Zealand. It will end up like soccer.’’
It’s a huge worry for the players. Nichol says the players already have an agreement to kick money back into the community game starting next year. Above a certain amount, the players have pledged to put 5 per cent back into the community game.
Nichol says: ‘‘The players see themselves as a big part of their communities. They see themselves as custodians of the jersey. Their mantra is to add value to it and pass it on to the next player. It’s an identity for us. And we struggle with the idea of selling 12.5 per cent of that to people who have no history with that jersey.’’
Kirk says: ‘‘When you align with someone in business you ask if they have the same motivation as you. And with Silver Lake the answer is clearly no. Their one simple motivation is to make money. That exposes you to genuine risks of cultural misappropriation. It doesn’t feel right especially when you are not in a crisis situation.’’
But much of this does not seem right. Where is the business plan for the new proposed commercial arm of NZR? No-one has seen one.
There is a reason why PWC came up with the sort of glowing appraisal that was presented to the provinces. Kirk says; ‘‘NZR took out of scope any assessments of future financial forecasts. It’s kinda relevant. So PWC had no say. Hello? Anyone in there?
‘‘The provinces haven’t been well served in terms of having the implications of the deal comprehensively explained to them. They were given the optimistic version. And it’s hard to blame anyone who is struggling to pay the bills for taking the money. Good people sit on these boards and I don’t blame them. But NZR should be planning long term.’’
As a result of the constraints placed on PWC, the players’ association asked another set of accountants, BDO, to come up with a full, unfettered appraisal of the deal. BDO concluded there were huge levels of financial risk that could leave the game in this country exposed.
So why go there? Kirk and Nichol believe there is an extremely viable alternative to the Silver Lake deal that keeps ownership of New Zealand rugby in Kiwi hands. They are working hard with experts in the field to make the proposal to offer 5 per cent to the New Zealand public ‘‘rock solid’’.
In that scenario then a senior government minister, like Grant Robertson, could come in behind the deal and say, ‘‘We’d love to keep rugby ownership in New Zealand. We shouldn’t be selling the All Blacks jersey.’’ Government support would be hugely valuable.
As Nichol says: ‘‘If you need a hand, ask the people who really care.’’
And the people who really care are the millions of Kiwis out there. Nichol has been inundated with voices saying ‘‘don’t let this happen’’. The public offering is a viable alternative. The Green Bay Packers are a publicly held nonprofit corporation. And guess what? They have stayed in Green Bay for more than a century despite being the smallest market in professional American sport. So yes, there is a working model out there.
So don’t let NZR slide this deal through. Nichol believes this decision is even more important than those made when rugby first went professional. Kirk says: ‘‘If the Silver Lake deal goes through, people in 5 to 10 years time will say, ‘Why the hell did we sell 12.5 per cent of the business?’’
And there really is no good answer to that. It’s a betrayal. And what happens when that money’s gone? Do you sell another 12.5 per cent of the business? It is just not sustainable. So thank heavens for the players. More power to them. At least some rugby people have a bit of vision.
It’s a very slippery slope and yet it is one that NZR seems determined to flail about on. And why? The game in this country is not in dire financial straits.