But the deal agreed to by the unions and the Maori Rugby Board last Thursday puts in place potential for better finances and more engagement with the demands of modern sport as well as international audiences.
Abandoned is 100% ownership of what has been considered this country’s national team, the All Blacks.
An overseas buyer, the United States-based private equity firm Silver Lake, will have a stake in all the revenue generated — somewhere between 5.71% and 8.58%.
Silver Lake is putting in $200 million.
And it is underwriting shortfalls if New Zealand-based institutional investors do not come up with the $62.5 million to $100 million to be offered later this year.
The plan is not without risk. If income does not increase, the deal simply means another “stakeholder” takes a piece of the pie.
The more likely outcome is that revenue will grow, and all parts of rugby will be the winner.
In particular, Silver Lake is expected to bring international, media rights and digital expertise to the new commercial arm of the New Zealand Rugby, Commercial Co.
Silver Lake already has interests in the likes of Twitter, Dell, Expedia, Airbnb and many other companies involved with technology, e-commerce and communication.
Rugby, with Silver Lake on board, will be endeavouring to do far more to “monetise” the All Blacks and potential All Black followers around the world.
The brand might be able to be built further and flourish through the likes of e-sport, fantasy rugby, virtual reality viewing or whatever is on the horizon.
Rugby itself could look more outwards, a shock perhaps to traditional ways and traditional defensiveness. Like the NBA in the United States, players could well be expected to have more engagement, be more open and display more character.
Overseas models might be imitated so game-day experiences improve, and the fans are more front, centre and on both sides?
There are all sorts of opportunities for global brands as the NBA and the English Premier League are showing.
It is, then, digital transformations and changes in attitudes and practices which are the key to long-term Sliver Lake success.
Nonetheless, in the short term, the cash is more than welcome — especially at the so-called “grassroots”, the foundation of rugby.
From the $200 million, $37 million will be split among the NPC unions ($1 million each), Heartland unions ($500,000 each), clubs ($10,000 to $50,000 depending on size), Maori rugby $2 million and the Rugby Players Association $5 million. A new Legacy Fund receives $60m.
The rest, after costs, goes into NZ Rugby reserves.
Without a doubt, rugby has to adapt or it will fade.
Apart from women’s numbers, and more recently the under 85kg competitions, participation has steadily fallen in the face of so many other options and shifts in society.
Team sports in our individualistic age are losing allure, and the physicality of rugby and fears of head injuries is putting many families off the sport.
Competition and potential financial rewards in other sports for the most talented people are more intense.
Covid, too, has disrupted rugby.
The habit of regularly going to the bigger matches has been broken and will be tough to win back.
Many an older season ticket holder has drifted away. Super Rugby crowds are down.
Rugby will be seeking to generate interest and money in the modern world.
Silver Lake, hopefully, can help with the changes needed.
The deal has nearly two years to put together — and there is much detail still to work through.
Rugby, at the insistence of the powerful Players Association, is also facing a governance review.
Rugby needs to proceed with care but also urgency to secure its place in today’s wider world and across New Zealand.
Silver Lake can play a role in that.
