Rugby’s soul at stake with private money
Investment could solve New Zealand Rugby’s financial woes but the self-promotion required would be at odds with the team ethos
Supposedly, you are not meant to look a gift horse in the mouth. This is the advice many would give to New Zealand Rugby now as they consider whether to engage in talks with private equity groups that want to invest in Southern Hemisphere rugby and specifically the All Blacks.
These are unprecedented times. CVC Capital, which has close to $200 billion of investments, is about to buy a stake in the commercial rights of the Six Nations.
There are other groups, just as well funded, who are equally eager to pump money into the game, and World Rugby will meet this week to assess what opportunities exist and how they should be approached.
But for NZR, there is a separate and specific opportunity. The All Blacks are on every private equity hit list and while there are investors exploring the prospect of buying a stake in Sanzaar properties — Super Rugby and the Rugby Championship — there are just as many eager to see if they can buy a piece of the world’s best known team.
NZR knows this because it says it has talked with most of them. Nothing formal or specific, more big picture, preliminary stuff that gives a sense of how things could develop if the national body decides it is genuinely interested in opening itself up to private equity.
And, with a balance sheet that is forecast to continue collecting red splotches for the next few years at least, what choice does NZR really have but to jump into bed with a private equity firm that could make all that financial worry disappear?
It’s not that simple, though. NZR needs more money, but it has to consider at what price that investment would come.
Private equity groups are not driven by anything other than return on investment, and what would be at stake is rugby’s soul.
The spirit of the game is important. Rugby can get a little pious, self-righteous even, about its culture of brotherhood and fraternity but there is an underlying truth that it has an ethos that marks it as different to other codes.
This is the issue NZR is having to consider at the moment — the hidden downsides of private equity rather than the obvious upsides.
Can rugby preserve and maintain its values of camaraderie when there are paymasters running it who care not about the human interest element but only the cold hard cash?
And it would be all too easy to underestimate the power of team values and tradition in having established the All Blacks as the global brand they are.
In 2009 when the All Blacks were in Italy, jersey sponsor adidas organised for a few players to have dinner with AC Milan. Not many footballers turned up, and those who did arrived in the obligatory Lamborghini or Ferrari, immaculately attired in Gucci, Versace and Armani.
If they were there on sufferance, they didn’t initially bother to hide it, but as the evening progressed, they became fascinated at the bonds they saw among the All Blacks.
They were blown away that teammates helped teammates — even those competing for the same position shared ideas and encouraged each other. They were flabbergasted that after 80 minutes of bruising contact, teams would have a drink with each other. All this blew them away because they said in their world, they weren’t sure of all of their teammates’ first names, and after a game, they legged it out of the stadium, head down, pushing past the legions of fans who wanted an autograph.
It was obvious to the All Blacks there that night the best footballers in the world wanted what they had — that professional football may have financial riches but could provide none of the emotional fulfilment of rugby. The Milan players asked if they could have dinner with the All Blacks again — they kind of liked feeling part of something bigger than themselves. Ask the All Blacks who won the World Cup in 2015 what made it so special and they will all say it was the journey rather than the destination.
That campaign was as much about winning friends as it was the tournament: the special moments were having Georgia and Namibia come to the All Blacks’ changing room and be amazed at the souvenirs they were given which ranged from kit to treasured selfies with Dan Carter and Richie McCaw.
The question for NZR is whether they feel they can preserve the spirit of the game should they indeed commit to private equity and perhaps even more specifically, they are having to grapple with whether they could make the inevitable change of mindset that would be required should they end up building their own streaming platform in partnership with an investor.
Of all the possibilities that sit in front of NZR at the moment, the prospect of owning and distributing digital content globally is the one that carries the most appeal.
Owning a streaming platform that is available direct to consumers around the world has long been on NZR’s wish-list. There are All Blacks fans everywhere and broadcast deals into foreign markets don’t necessarily bring NZR value commensurate to the pulling power of the brand.
Having seen how the NBA has grown revenue and profile by owning its own digital property, NZR’s interest in doing the same has risen significantly, and with private equity now on hand to meet the up-front costs of development, the dream could easily become reality.
There is still a barrier, though. It’s not money, but mindset. Rugby is built on the cult of team, not individual, yet the success of any digital project will depend on the ability of fans to engage with the players.
The NBA promotes the individual. The stars have licence to speak, to be themselves and create the impression that the sport is all about them.
Rugby, and specifically the
All Blacks, are at pains to deflect individual praise and credit the team for everything.
If private equity comes on board as a partner — be it in a digital offering or anything else — they will demand the game more aggressively promote itself and expect the star names to be comfortable talking about themselves.
They will also expect them to be more compelling and revealing than they currently are, because as much as the whole self-effacing thing can be endearing, it can also lack authenticity when the wing who has beaten five defenders and pulled off the impossible, says he was just fortunate to have been in the right place at the right time.
Fans can appreciate that a player is grateful just to be part of the team, but they lose interest pretty quickly when the individual refuses to say whether they would prefer to play one position ahead of another.
A deal with private equity would require a major change in attitude and what NZR has to determine is whether that can happen without the All Blacks losing the essence of themselves in the process. If the thread is tugged, will it all unravel, or is it possible for self-promotion to co-exist with the idea of the team being bigger than the individual?
Is it possible for selfpromotion to co-exist with the idea of the team being bigger than the individual?