There are signs that giant US private investment firm Silver Lake – already in late-stage talks to buy a slice of Rugby New Zealand – also wants a chunk of Rugby Australia.
Rugby Australia board’s had met with Jefferies Australia, run by local boss Michael Stock, the AFR reports. The paper named UBS alum Stock “Australia’s most powerful dealmaker” in 2019.
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Jefferies, under Stock, is advising New Zealand Rugby on its negotiations with Silver Lake for a 15 per cent stake worth up to $465 million.
Sources told AFR that Rugby Australia may retain Jefferies for advice because it will help the board speed things up given the bank’s familiarity with the sector, thanks to its recent work for arch-rival New Zealand Rugby.
Transtasman monopoly fear
Meanwhile, a second private equity outfit CVC Capital – which has already invested heavily in northern hemisphere rugby, is said to be circling.
There is a possibility if NZ does proceed with Silverlake, that CVC will then step up its attempts to buy a slice of Rugby Australia to head off a Silverlake monopoly of the two neighbouring countries, the Australian reports.
Anzac bloc a 'massive opportunity, Rugby Australia boss says
Rugby Australia chairman Hamish McLennan dropped a heavy hint that he was open to such a deal.
Earlier, asked by the Australian if an NZ deal would make Australia a more tantalising target for private equity groups, McLennan replied: “Yes. Absolutely. I think the Australian component is the last piece of the global jigsaw.”
McLennan added: “The massive opportunity for us is working in concert with NZ to create an Anzac bloc which would have massive leverage globally.”
That statement is something of a turnaround for the Rugby Australia chairman, who in September said Australia-New Zealand rugby relations were at “their lowest ebb” amid testy discussions about how to deal with the pandemic (see clip above).
The Silicon Valley-based Silver Lake – established in 1999 to invest in technology companies – has over the past half-decade spent billions buying stakes in sporting competitions and teams, from the UFC to the NBA’s New York Knicks to the football holding company whose assets include Manchester City. Its owners figure they can use their tech prowess to help high-profile teams boost their global brand in the new era of streaming and social media. With some $200b of assets under management, a $465m All Blacks deal would be chump change for Silver Lake.
With its putative foray into rugby, Silver Lake is coming up against European private equity firm CVC Capital, which bought a 28 per cent stake in Europe’s Pro14 competition for around $225m million last May and in January this year secured a £365 million deal to buy into the Six Nations tournament.
Analysts are split over what a Silver Lake-NZ Rugby deal would mean for the union broadcast partner Sky TV, which is looking to its recently-acquired global streaming service RugbyPass as an avenue to future growth.
Although it still has high hopes for RugbyPass, Sky wrote-down its carrying value from $38.4m to $10.9m last year amid the pandemic, noting the global service had incurred some $14.5m in accumulated losses with “no material synergy benefits to date.”
There could be more pressure if Silver Lake does come on board, and wants to pursue alternative routes to a worldwide audience for NZ – or Anzac – rugby.
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