The long-running and at times bitter standoff between New Zealand Rugby and the country's leading players over a multi-million dollar private equity deal has significantly evolved in the quest for a resolution.
The Herald on Sunday can today reveal dramatic developments in the Silver Lake saga — including a newly-tabled offer for a lower stake in the national game at a high valuation, and a list of player demands that could change the way the national body operates.
This comes four months after an ugly public spat between NZR and the New Zealand Rugby Players' Association, with NZR chief executive Mark Robinson saying at the time the relationship between the organisations was "at a new low".
Despite New Zealand's 26 provincial unions unanimously approving the deal at NZR's annual general meeting in April, the NZRPA, through collective bargaining negotiations, have since refused to sign off the agreement.
Several failed attempts at mediation over the US technology investment giant's bid of $387.5 million for a 12.5 per cent sale of NZ Rugby's commercial rights has been followed by weeks of silence.
While all parties are keen to keep the latest developments behind closed doors, the Herald on Sunday can reveal Silver Lake have reduced their potential equity stake from 12.5 to 7.5 per cent and significantly improved their original valuation of NZ Rugby's commercial rights in a bid to break the impasse.
When the Herald first revealed the full details of the deal in February, Silver Lake had offered $465m for a 15 per cent stake at a $3.1 billion valuation.
The deal presented at NZ Rugby's annual meeting was revised to a 12.5 per cent stake for $387.5m.
The Herald on Sunday understands Silver Lake's improved valuation for a 7.5 per cent stake was tabled after the Players' Association officially outlined its intent to not support the 12.5 per cent sale proposal three weeks ago, sparking rumours the deal was dead.
While extracting a higher valuation for a lower sale stake lessens the risks and retains more revenue, reducing the capital injection has the potential to leave the New Zealand game exposed in a fraught Covid-affected climate.
Progress is not a notion associated with the Silver Lake deal after high-ranking NZ Rugby executives and the Players' Association traded public verbal blows over the best path to safeguard the sport by boosting revenue. Negotiations in recent times, though, are edging forward in a more constructive manner with a willingness to compromise evident from both sides.
Tradeoffs can be seen in NZ Rugby and Silver Lake reducing the sale stake and the Players' Association's position shifting from wanting no part in foreign capital to acknowledging the value it can bring.
After receiving Silver Lake's improved offer, however, the Players' Association is understood to have responded with a set of conditions to ensure what they believe is a "genuine partnership".
Those conditions include the request for an independent NZ Rugby governance review that assesses the constitution, striking at the heart of the provincial union's control, and whether the existing structure is fit for purpose.
This request comes after attacks on the players by former NZ Rugby chairman Brent Impey, the breakdown of the relationship with Australia and with a view to being fully equipped to work alongside heavyweight global businesses.
This is not believed to be a major sticking point.
NZ Rugby has undergone three governance reviews in the past decade. Changes to the board structure, roles and responsibilities were certain should the Silver Lake deal progress through the creation of a new subsidiary company, dubbed CommercialCo, which will be charged with maximising commercial rights.
Any wide-ranging governance critique may include a review of the Players' Association governance structures.
The Players' Association board includes former World Cup-winning captain David Kirk, injured All Blacks captain Sam Cane, centurions Sam Whitelock and Aaron Smith, Dane Coles and Black Ferns skipper Sarah Hirini, all of whom have been heavily involved in regular meetings on the Silver Lake proposal.
Former All Blacks captains Richie McCaw and Kieran Read, and test veteran Conrad Smith, among other influential retired players, have also featured prominently in consultation process.
Other stipulations put forward by the Players' Association are based around ensuring the total amount of revenue-generating assets sold is at a level that does not compromise NZR's commercial model in the future, and includes performance components.
One source told the Herald on Sunday the Forsyth Barr proposal — selling a five per cent stake in NZR's revenue-generating assets through an NZX-listed entity, previously presented as one alternative by the Players' Association — was a "dead duck".
Yet the list of conditions from the Players' Association still includes the key principle to provide the opportunity for New Zealanders to invest in NZ Rugby, alongside any potential agreement with Silver Lake.
While ongoing negotiations between the three parties are said to be in a "good place" and progress has been made, a Players' Association source told the Herald on Sunday there were no guarantees a deal would be done, describing it as a 50/50 proposition. An NZR source said compromise could only stretch so far and that the deal would not proceed at any price or cost.
If an agreement can be reached, it is understood Silver Lake's revised valuation and offer for a 7.5 per cent stake will require the provincial unions to vote again on the proposal at a special general meeting.