The mighty All Blacks are being courted by the commercial muscle of a large private equity firm Silver Lake, which wants to acquire a stake in the world's most famous rugby team.
The promise here is that it will bring more money into the game, allowing for development from the ground up.
But will this really happen? Or will the All Blacks end up as little more than a commercial entity that's turned its back on local fans?
Today rugby journalist Gregor Paul gives the Front Page podcast a rundown on all the biggest issues facing NZ Rugby amid the blockbuster deal.
What are the details of the deal?
Gregor Paul: "Silver Lake, a fund manager specialising in private equity investments, particularly in the technology sector, is going to pay $200 million for a 5.8 per cent stake in a commercial company that's going to be set up separate from the Rugby Union. That's where they'll put all their commercial assets, which includes broadcast, sponsorship, digital assets, basically all the money they make currently from selling things."
How will Silver Lake make money from the deal?
GP: "Largely it boils down to the fact that All Blacks are a huge brand, which everybody will agree that they are, but they are currently not monetising themselves in a way that other big sporting brands like Manchester United have been able to do. Silver Lake thinks there's money to be made in finding new All Blacks fans. Now, according to Silver Lake there are millions of people sitting around the world who are potential All Blacks fans who are currently not paying any money towards the brand. So their whole business plan is really built on finding these people, engaging with them and monetising them. There could be anything from 10 to 60 million latent All Blacks fans out there. They're going to find them and bring in a whole lot more money through these people."
What does this international focus mean for the local fans?
GP: "It probably won't make a huge deal of difference to the local fan, because I think the fan – whether here or abroad – is going to be put at the centre of all decision-making around rugby, particularly the All Blacks. Silver Lake wants to try and improve every competition that locals play in, whether it's Super Rugby or the All Blacks. They've got to find more value for that. They've got to improve the in-stadia experience for the local fan. The in-home experience is something that Silver Lake will see as an area where they can add real value. What we'll see in this area is a whole range of changes to apps and the technology aspects of watching test matches. We'll have all sorts of different things, like new camera angles that you can view on your phone."
What commercial impact will this have on the players?
GP: "The immediate danger is the impact this could have culturally. The All Blacks are a big brand. They're a commercial entity. We get that. But at the moment they're a commercial entity with a hardcore Kiwi theme behind them. You go out and meet these guys and it's always surprising to the rest of the world that they're very approachable. They've got this Kiwiness about them. Half the time, they're not wearing shoes when you meet them. That whole element has been really important in terms of grounding them and keeping them accessible. I guess the danger here is that you bring in an American fund manager, and then they go on a global search to find a chair and CEO to run this new commercial company. They may have very little feel for New Zealand or the All Blacks. They might have worked for the NFL or the NBA. And the danger is that they don't understand what's made the All Blacks tick and they don't understand New Zealanders. If we get to that point and we start seeing branding around the All Blacks, which is a bit pusher, less humble and more individualistic, that could run against the bedrock values."
With the focus on international fans, will there be fewer home games?
GP: "That's happened already. The All Blacks have played tests in the US, Japan and Hong Kong as a means to showcase the brand. I don't think we'll necessarily see any more of that because there literally isn't any room in the calendar to shove in another game and play it. Player welfare has got to be critical for these guys. But what is likely is for it to become a regular part of the calendar for the All Blacks to play at least one test match in either the USA or Japan, because I think those two countries are clearly commercially the biggest pots in the game. That's where Silver Lake would like to see them playing."
Will more money trickle down to the grassroots?
GP: "The initial investment will see $29 million go into a legacy fund. The idea behind this is to have this pool of money permanently available for grassroots rugby to tap into. This might be to redevelop a local rugby club, it might be to find a community rugby officer to operate somewhere and try to drum up kids to play. It's a bit like the NZ on Air fund for broadcasting. You make an application as to why you need money and it will be determined whether you get it or not. So $29m is quite a lot – and the idea is that any excess profit – if there is excess profit – will go directly into that legacy fun over the years and they'll keep replenishing it and building it over time."
Will it have any impact on the women's game?
GP" I don't think it will be impacted directly as such. They won't earmark money and say that's going to the Black Ferns. But the way this works is that the professional players - and this is the umbrella the Black Ferns will come under - take 36.5 per cent of all New Zealand Rugby's revenue. That's a deal built into the collective agreement, and that's been going on for 15 or 16 years. So, the player payment pool is linked to overall revenue, so if the overall revenue of this commercial company grows, then the overall revenue of the player payment pool is going to grow. And that's great because the additional money will mean there should be more to pay individual contracts for the Black Ferns and a wider group of young female players will be able to enjoy enough income, so they can become full-time players."
Is there a chance of egos clashing because of commercial imperatives?
GP: "Well, that's one of the biggest risk points going into this because the All Blacks brand has been built on humility, teamwork and being understated. There's a danger that when you get an external group of people who are trying to monetise this group, who see a direct link between entertainment, audience and money. Therefore, they want this thing to have a show business appeal to it - and there's a huge danger if players are encouraged to build their own brands, and use their social media accounts to showcase themselves. It could, for instance, become difficult, if someone doesn't get picked. At the moment, there's a rule at the All Blacks that if someone doesn't get picked, they're not allowed to sulk. You've got one minute to go up to your room and feel sorry for yourself, then you come back downstairs and help the guy who's taken your jersey. It's all about the team...
"The worry now is that if there is this sort of entertainment focus put on it, and the guys are encouraged to speak when they feel like it, we could have drama being swung around here. It takes 120 years to build a brand that's worth $3.5 billion. I don't think it will take much more than 112 days to destroy that and for the value to come shooting right down if we've got guys fighting internally or if the team is dogged by scandal because of social media nonsense going on."
• The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am.