New Zealand Rugby CEO Steve Tew. Photo / Photosport
New Zealand Rugby CEO Steve Tew. Photo / Photosport
In these rapidly changing times, New Zealand Rugby could well be grappling with the question of privatisation.
Recent probes about accessing public funds, through tax breaks for leading All Blacks, don't happen without at least considering the alternative — privatising aspects of the business by tapping into benefactors or equitygroups.
Those conversations — public and private funds — naturally overlap.
Treading further down the private route could be radical and cut against the grain of NZR's blueprint; its central contracting model and vice grip on governance.
NZR has been conservative in this space, since 2011 leaving private funding to the five Super Rugby franchises, while maintaining control of the players.
Many private investors are, in fact, provincial unions.
Opening the door further is the global way. England's Premiership Rugby recently sold a 27 per cent share to CVC Capital Partners, former Formula One owners, for £200 million ($374m).
The Pro14, featuring teams from Ireland, Wales, Scotland, Italy and South Africa, is expected to be next to sell off a significant stake. The French Top 14 and Japanese Top League are both privately owned.
Already struggling in this global market, New Zealand must be wary of being left behind. Seeking private investment is now possible, if the right partner and terms could be reached.
Montpellier owner Mohed Altrad, worth an estimated US$2.5 billion ($3.8b), last year expressed interest about investing in New Zealand Rugby.
In any such case, the question is, then, at what cost?
New Zealand's near decade-long dominance is under threat. Firstly, there's the spread of expert Kiwi coaching nous, the mirroring of development systems and carefully managed player workloads in other parts of the world. And then there's the money gap, with player retention more difficult than ever and only getting worse.
Solutions are difficult. Unable to compete on salaries, NZR has tried forging relationships with overseas clubs and sabbaticals to persuade long-term commitments from premier All Blacks.
These, though, are far from foolproof due to the risk of injury while players are loaned abroad, and the likelihood of fatigue and rust upon return.
Tax breaks were always going to be a difficult pitch, despite Ireland ushering them in long ago.
NZR chief executive Steve Tew was unwilling to discuss private investment publicly but such alternative measures to counter the player drain are understood to be under consideration.
New Zealand Rugby CEO Steve Tew. Photo / Photosport
One could emerge from the Sydney Morning Herald revelations that David Paradice, the global funds management owner worth A$519 million, pays a portion of David Pocock's salary, and that other private backers fund Israel Folau, now signed for the next four years.
In theory, NZR could do the same, but sourcing wealthy benefactors willing to plough large sums for benevolent purposes appears a distant dream for rugby here.
Other private funding options include replicating the Australian Rugby Foundation, the national fundraising body set up by Rugby Australia in the hopes of creating a self-sustaining future fund.
This allows anonymous backers to make tax deductible donations, with some funds then used to top up leading players' salaries.
Even this is a complex process, however, with individual donors able to dictate where their investment goes. Some may want to fund the grassroots game — not top players.
Third party deals also provide vital private funds.
In 2014 the Irish Times reported that to lure Jonathan Sexton, reigning World Rugby player of the year, back from Paris club Racing 92, the national union and Leinster helped facilitate sponsorship worth over NZ$250,000 per-year with Topaz, the Denis O'Brien-owned Irish petroleum retail chain.
At the top end, the Herald understands NZR creates similar partnerships. The union linked former All Blacks captain Richie McCaw with Air New Zealand, and did likewise for Beauden Barrett with Tudor. Both companies have commercial arrangements with the All Blacks, and separate deals with those players.
The well is, however, not bottomless on such arrangements, and companies are selective in who they fund. Headline players must be blemish free and seen as likely to retain that image.
New Zealand Super Rugby teams also facilitate third party deals with specific players - the face of season ticket memberships, promoting Auckland transport (Jerome Kaino) or Nib Insurance (Benji Marshall).
Even then, third-party deals are not nearly enough to halt the exodus.
With these commercial avenues all but tapped out, the prospect of private investment, partial sale or partnership sits on the table.
Either comes with significant risk. Welcoming cut-throat commercial expertise loosens control, potentially allowing ego-driven agendas to enter and objectives other than serving the national team and its pathways.
Private benefactors might also, say, demand access to teams or specific players which is not conducive to performance.
Murray Bolton's $5m investment in the Blues over the Past five years ended abruptly with NZR opting to step in and buy back his 40 per cent share in the franchise last year.
That is not to say it could not work with other individuals but it does highlight the dangers.
Similarly, someone such as Altrad getting his hooks in, the question would be what does he want in return?
Test rugby's potential World League concept offers hope for significantly boosted revenue for the struggling southern nations — up to $20m each, supposedly from one broadcaster.
Yet that proposal faces strong opposition from the Home Nations, those hatching other plans to serve their backyards, and is therefore no guarantee to proceed.
Like its neighbours, New Zealand is vulnerable. Private investment seems the way forward in other parts of the rugby world. Whether complications can be navigated here remains a risk and reward discussion.
