New Zealand Rugby (NZR) reportedly faces a financial crisis as it rapidly depletes its $200-million Silver Lake investment by 2031.

According to a report on the New Zealand Herald, the anticipated revenue surge following Silver Lake’s equity partnership in 2022 has not materialised, exacerbating the problem.

NZR’s commercial arm, New Zealand Rugby Commercial (NZRC), incurred unexpectedly high costs, including a substantial $10.5 million annual interest payment to Silver Lake. Lower revenues and increased costs project a depletion of reserves before a substantial income boost.

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Despite recording $270m in revenue and securing broadcast and sponsorship deals, NZR’s economic landscape shifted post-Silver Lake’s equity sale in 2022. The $38m NZRC investment, coupled with annual interest payments, strained NZR’s financial outlook.

Efforts to secure additional capital faced challenges, prompting an attempted $62.5m underwrite from Silver Lake. Institutional reluctance and market conditions thwarted plans. NZR and the New Zealand Rugby Players’ Association (NZRPA) entered mediation, leading to a provincial union straw poll on Silver Lake’s $62.5m offer.

While unions overwhelmingly approved the transaction, the NZRPA insists the decision exposes NZR to unwarranted financial risk, emphasising the disparity between initial projections and the harsh reality of revenue growth and cost implications.

Photo: Anne-Christine Poujoulat/AFP