The ongoing stand-off between New Zealand Rugby and the Players’ Association has taken a turn for the worse, with the governing body now accusing players of demanding ‘untenable’ payments at the expense of the community game.
According to a report in the New Zealand Herald, mediation between NZ Rugby and the Players’ Association concluded on Tuesday following intensive talks held over the past three weeks.
It is believed the parties could not reach an agreement on the proposal to sell 12.5% of NZ Rugby’s commercial rights for $387.5 million, with Silver Lake valuing NZ Rugby at $3.1bn.
The Players’ Association has presented revenue-raising alternatives to the NZ Rugby board and the 26 provincial unions, who are poised to vote on the Silver Lake proposal at the annual general meeting in Wellington this Thursday.
Some of the alternatives include debt servicing – raising a $150m revenue bond at 4% interest, or selling a 5% stake in commercial rights to private investors.
NZ Rugby has since hit back in a 10-page letter, signed by chief executive Mark Robinson and chairman Brent Impey.
‘NZR have quantified the surplus the players are seeking beyond an assessment of needs at over $100 million through to 2025,’ the letter states. ‘This position and, therefore the proposal, is untenable to NZR.’
‘NZR believe that no single part of the game can be treated in isolation of the needs of all of rugby, so that the player payment pool cannot be viewed as separate and sacrosanct versus community rugby. This is all particularly relevant when the partnership is considering a fundamental paradigm shift in revenue generation.
‘The Silver Lake distribution is a cost associated both with revenue generation support and with NZR receiving capital today, that enables us to underwrite the long-term financial security of the wider game.
‘NZR therefore believe it is entirely appropriate that the player payment pool should be based on NZR’s share of revenue rather than the 100% of gross player generated revenue as proposed by the players. This player modelling shows a lack of appreciation of the entire rugby system and the underinvestment in the community game.
‘The consolidated approach modelled by the NZRPA effectively increases the players share to 41.78% of NZR revenue, a share that can only come from funding that would otherwise go to supporting all of rugby across New Zealand.
‘This approach creates a further imbalance of funding in the game and results in excess surpluses to players, while the financial health of NZR and community rugby suffer.
“We do not consider the players need more than this quantum during that period. After payment of all these costs, the NZRPA modelling shows a surplus of over $100m on top of these payments. This is not tenable to NZR and we question why it is needed.
‘This under-investment has over the last decade seen ever increasing challenges at community rugby level. NZR acknowledge the professional game and the revenues generated by it have thrived and delivered exceptional results on the field over this same period. But it is critical in looking forward to take a full view of the health of rugby in New Zealand and set investment requirements with that all of rugby view.
‘We seek clarity as to whether the Silver Lake proposal as tabled by NZR is in fact still “live” in the view of the NZRPA. If the players fundamentally do not believe this proposal is right for rugby in New Zealand, then we question why we are continuing to mediate and negotiate on the proposal on the basis that the NZRPA will support the deal if the right financial terms can be agreed for the players.
‘NZR ask that the players assess their position as presented by the NZRPA and review the trending funding imbalance between professional rugby and the 270 professional players cohort, with the needs of the wider game and the communities in the length and breadth of New Zealand.’
Photo: Fiona Goodall/Getty Images
