Sky TV reveals more detail on NZ Rugby stake

Sky TV has revealed another restriction on the 21.8 million shares it granted NZ Rugby as part of its new Sanzaar deal.

The deal, announced last month, gives Sky rights to All Blacks, Super Rugby and Mitre 10 Cup games through to 2026 for an undisclosed cash sum ($400 million, the Herald understands) plus a 5 per cent stake in the pay-TV broadcaster.

Sky previously revealed that NZ Rugby must hold its stake for a minimum of two years.

An NZX filing yesterday states that NZ Rugby must also give Sky at least 10 working days’ notice if it wants to sell its shares when the restricted term expires. New Zealand Rugby will also have to hold good-faith talks with Sky and give the broadcaster the chance to line up a purchaser.

Sky also disclosed that the 21,801,325 shares were issued at a price of 92c — valuing them at $20.06m.

The deal — in which a sporting code will take a stake in a broadcaster for the first time in New Zealand — has been labelled as “revolutionary,” entrepreneurial and innovative.

But the reality is that companies typically include shares in a deal when they don’t have enough cash to pay for it outright.

The two-year restriction crimps NZ Rugby, but not as much as some feared.

The ability for NZ Rugby to offload its shares after two years gives the sporting body plenty of space to sell the stake before it has to renegotiate the five-yearly rugby rights.

The 5 per cent shareholding will also make it obvious when NZR sells or reduces its stake, as any change will trigger a substantial shareholder notice to the NZX.