Where to for Super Rugby?

[Braveheart81]

have they got a tv deal for next year, well seeing as they have shares in Sky tv as payment I think we can say probably!

Interestingly, the stake in Sky Network Television that was worth NZ$20.06m when the shares were issued is now worth NZ$3.23m.

Whilst there's a broadcast agreement in place, this is also a not a very healthy business. They had to go to the market recently to raise over NZ$150m to held improve the company's capital position.

 

[eastman]

GRR won’t be happening next year so Twiggy will want to keep the Force with the main mob for the time being. GRR could over time morph into the 2nd tier comp if the TT is done right. Private equity and this Big Bash concept into the Aus franchises could make the TT viable for us.

Does anyone here work in the finance industry or understand how private equity works?

The most important thing for any private equity firm when making an investment is operational history/ past performance. These firms then make a punt that they have the ability to optimise the business through management nous (this can come through actual commercial acumen or often just streamlining costs). That's why the only real examples of private equity in rugby has been the English League and 6 Nations, two competitions with years of operating/ performance history.

That's why all this talk of 'leveraging private equity' is fanciful until there is actually a known product- no PE firm is going to risk investing in the unknown quantity of an Australian rugby 'big bash'.

'Venture Capital' is the form of private finance that is willing to make high-risk early stage investment, however these firms invest in areas they believe have potential for growth. I can't see too many of these guys looking at rugby in Australia and viewing it as a 'huge growth' area- unless there are significant conditions attached.

I think we need to temper expectations for private capital in Australian rugby until there has been some form of competition up and running for a few years at the minimum.

 

[Braveheart81]

The most important thing for any private equity firm when making an investment is operational history/ past performance. These firms then make a punt that they have the ability to optimise the business through management nous

I think they also very much look towards distressed businesses that need a capital injection in return for equity that either wouldn't be available otherwise or not at that price.

The reality is that Australian rugby is that distressed business and the capital investment needed to secure a fairly chunky stake in it wouldn't be that high.

For Rugby Australia and the various franchises, there isn't much downside in selling a chunk of the Tahs, Reds, Brumbies and Rebels because they're not entities that anyone is drawing a profit out of anyway. They distribute to the state games below them but that could be easily managed from the proceeds of whatever percentage is sold.

It's not hard to imagine that the value of these teams will be substantially higher in a couple of years time when some normality has returned providing they can ride out this period of a pandemic and an uncertain future in terms of competition and broadcast deal.

 

[KOB1987]

Does anyone here work in the finance industry or understand how private equity works?

The most important thing for any private equity firm when making an investment is operational history/ past performance. These firms then make a punt that they have the ability to optimise the business through management nous (this can come through actual commercial acumen or often just streamlining costs). That's why the only real examples of private equity in rugby has been the English League and 6 Nations, two competitions with years of operating/ performance history.

That's why all this talk of 'leveraging private equity' is fanciful until there is actually a known product- no PE firm is going to risk investing in the unknown quantity of an Australian rugby 'big bash'.

'Venture Capital' is the form of private finance that is willing to make high-risk early stage investment, however these firms invest in areas they believe have potential for growth. I can't see too many of these guys looking at rugby in Australia and viewing it as a 'huge growth' area- unless there are significant conditions attached.

I think we need to temper expectations for private capital in Australian rugby until there has been some form of competition up and running for a few years at the minimum.

Yeah I used to work in investment management. Private equity in sport can come in many forms as you allude to, from investment funds, corporate tax relief, venture capital, HNWs, and even the membership base. The ones looking for a long term sustainable profit would be more interested in investing in the actual competition. The ones investing in a teams are more interested in the perks that come with that. I actually think you could sell 50% of the Tahs and Reds to supporters and sponsors and raise enough that way to kick things off. Force are sorted, the Brumbies and Rebels might be a bit of a harder sell due to the lower fan bases. It's certainly not beyond the realms of possibility.

Also, it's McLennan himself who has been spruiking the idea of private equity, he actually does have a small amount of experience in the field. Whilst some of the ideas floated here might be a bit lacking in the expertise department, the concept itself is not people going off half-cocked.

 

[Dan54]

Dan, in the context of my comment I was mearly pointing out / highlighting that in these uncertain times no pre-existing contracts are necessarily a given depending on the shape of the world and the ability of parties to honour said contracts. Will NZRU have a contract a deal in some form, well yes in some form.



So statements like this circulating in the NZ press were factually wrong?

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12343030


You could be right. Control the narrative.

Why the hell would anyone think the NZ press is anymore reliable than Aussie press or any other press? Yes I heard Mark Robinson say they had been approached as they were in 2017 and before that, but also heard him say while they talk to everyone in these times their focus was on just playing test rugby ! I understand what you were pointing out about uncertain times, and didn't mean to say otherwise, just meant that pretty sure they got some deal in place!

 

[Dan54]

Interestingly, the stake in Sky Network Television that was worth NZ$20.06m when the shares were issued is now worth NZ$3.23m.

Whilst there's a broadcast agreement in place, this is also a not a very healthy business. They had to go to the market recently to raise over NZ$150m to held improve the company's capital position.

Yep and Aus has got a deal in place with Fox which is also struggling, not suggesting anyone is sitting on a goldmine, but was just saying that NZRU probably had a deal in place next year.

 

[Braveheart81]

Yep and Aus has got a deal in place with Fox which is also struggling, not suggesting anyone is sitting on a goldmine, but was just saying that NZRU probably had a deal in place next year.

One is the major issues is that we don't have a deal in place for next year whereas NZ do.

NZ's deal is for a competition that probably won't exist though (although most of the value lies in the test matches which hopefully will exist and remain unchanged in 2021).

Part of my point though is that what was hailed as a great strategic partnership by NZRU in acquiring a stake in their broadcaster as part of their deal might end up being less of a great strategy if that broadcaster really tanks. The reality though might be (like Australia) that there really isn't another viable broadcaster at least in the nearer term.

 

[Jimmy_Crouch]

Part of my point though is that what was hailed as a great strategic partnership by NZRU in acquiring a stake in their broadcaster as part of their deal might end up being less of a great strategy if that broadcaster really tanks. The reality though might be (like Australia) that there really isn't another viable broadcaster at least in the nearer term.

Unless Sky TV pivot the All Blacks are sitting on the top deck of the Titanic.

 

[The Honey Badger]

Yes I make mention of that in my last paragraph - the broadcast deal will be tiny so to retain our players it would be reliant on private equity.

Or else a drop in pay, - a move to semi pro

 

[Rugbynutter39]

Or else a drop in pay, - a move to semi pro

I personally would rather say a 6 to 8 team semi pro comp - say join forces with twiggy and rapid rugby then a closed borders trans Tasman comp with nz with say only 2 to 3 teams...

 

[The Honey Badger]

I personally would rather say a 6 to 8 team semi pro comp - say join forces with twiggy and rapid rugby then a closed borders trans Tasman comp with nz with say only 2 to 3 teams.

I Agree,

Not long ago I would have been 100% Trans Tasman, but Quick Hands convinced of the problems with that model.

I am thinking for Aus Rugby, the more Aus teams (even at Semi Pro level) the better, - more places to develop home grown talent. 8 teams is my thinking - using the existing NRC model - but with playing our best players including the highly paid ring fenced wallabies.

Then a selection based formation of either 2 or 3 teams to play a short TT series. Which would be Tahs and Reds.

Best of Both worlds

 

[Derpus]

I Agree,

Not long ago I would have been 100% Trans Tasman, but Quick Hands convinced of the problems with that model.

I am thinking for Aus Rugby, the more Aus teams (even at Semi Pro level) the better, - more places to develop home grown talent. 8 teams is my thinking - using the existing NRC model - but with playing our best players including the highly paid ring fenced wallabies.

Then a selection based formation of either 2 or 3 teams to play a short TT series. Which would be Tahs and Reds.

Best of Both worlds

I think cutting the Brumbies and Rebels would be fatal not only to Rugby in Australia but to the Wallabies chances of ever being competitive with the top 5 teams in the world.

 

[drewprint]

More word from NZ (Scotty Stevenson) about only 2 Aus teams being allowed in to the NZ model. Perhaps McLennan was correct and the NZ CEO was talking rubbish when he denied it?

https://www.tvnz.co.nz/one-news/spo...m-overdue-says-1-news-sports-scotty-stevenson

 

[The Honey Badger]

I think cutting the Brumbies and Rebels would be fatal not only to Rugby in Australia but to the Wallabies chances of ever being competitive with the top 5 teams in the world.

My concept would be that the Brums/Rebs and Force all existed in a NRC. The Tahs and Reds dont exist in that comp but Sydney and Brisbane and the 2 country sides do.

Tahs and Reds are then formed as a SOO type selection to play each other in SOO and in a TT super comp.

If we could have 3 teams, then the highest finishing of the Brums/Rebs/Force make the 3rd but they would have free selection across all Aus teams including any non selected players for NSW & QLD .

Aus Rugby needs to make the NRC the primary focus. The TT comp needs to be short and sweet and not become the primary focus

 

[Dan54]

More word from NZ (Scotty Stevenson) about only 2 Aus teams being allowed in to the NZ model. Perhaps McLennan was correct and the NZ CEO was talking rubbish when he denied it?

https://www.tvnz.co.nz/one-news/spo...m-overdue-says-1-news-sports-scotty-stevenson

Not sure who bullshitting who mate, but I heard McLennan say a few weeks ago he had his doubts whether Aus had the depth for 4 teams and maybe buying in players was one option. That is not a report , but something he actually said on breakdown!
I not sure how it will all pan out, you got the likes of Georgina Robinson saying one thing, as is NZ Hurld, which immediately makes me wonder, and then you supposedly now have McLennan saying different to what he was indicating earlier, you got Eddie Jones etc saying Aus need to be back to 3 teams and concentrate their talent to make Wallabies stronger, we have some saying that Super 12 was the best model (which I kind of agree with) but that got changed because Aus and SA wanted more teams, so buggered if I know where it will go!
By the way Sumo Steveson's is only an opinion piece!

 

[eastman]

I think they also very much look towards distressed businesses that need a capital injection in return for equity that either wouldn't be available otherwise or not at that price.



The reality is that Australian rugby is that distressed business and the capital investment needed to secure a fairly chunky stake in it wouldn't be that high.

Good point but I can't see any large/ top tier firms (including the like of CVC) making this kind of investment. I can only see this happening through a smaller/ boutique firm being championed by a rugby aficionado...

 

[drewprint]

Not sure who bullshitting who mate, but I heard McLennan say a few weeks ago he had his doubts whether Aus had the depth for 4 teams and maybe buying in players was one option. That is not a report , but something he actually said on breakdown!
I not sure how it will all pan out, you got the likes of Georgina Robinson saying one thing, as is NZ Hurld, which immediately makes me wonder, and then you supposedly now have McLennan saying different to what he was indicating earlier, you got Eddie Jones etc saying Aus need to be back to 3 teams and concentrate their talent to make Wallabies stronger, we have some saying that Super 12 was the best model (which I kind of agree with) but that got changed because Aus and SA wanted more teams, so buggered if I know where it will go!
By the way Sumo Steveson's is only an opinion piece!

Yeah who knows. There’s a bit of gamesmanship happening on all sides here. But I think there’s enough noise, from different sources, and on both sides of the ditch, to suggest there’s something to this story.

 

[eastman]

I actually think you could sell 50% of the Tahs and Reds to supporters and sponsors and raise enough that way to kick things off. Force are sorted, the Brumbies and Rebels might be a bit of a harder sell due to the lower fan bases. It's certainly not beyond the realms of possibility.

The cynic in me thinks this could actually be the most palatable option for the heads at RugbyAus/ RugbyNSW, as it would the easiest option for them to retain existing management and influence, without the scrutiny and expectations of a major owner- provided ownership/ membership is diluted/ widespread enough of course.

 

[eastman]

More word from NZ (Scotty Stevenson) about only 2 Aus teams being allowed in to the NZ model. Perhaps McLennan was correct and the NZ CEO was talking rubbish when he denied it?



https://www.tvnz.co.nz/one-news/spo...m-overdue-says-1-news-sports-scotty-stevenson

It's likely that the report identified a TT comp with only 2 Australian teams as a potential option.

I think it's less likely that this was the 'preferred' option, and will be the initial model proposed by RugbyNZ in discussions with RugbyAU.

 

[KOB1987]

Not sure who bullshitting who mate, but I heard McLennan say a few weeks ago he had his doubts whether Aus had the depth for 4 teams and maybe buying in players was one option. That is not a report , but something he actually said on breakdown!
I not sure how it will all pan out, you got the likes of Georgina Robinson saying one thing, as is NZ Hurld, which immediately makes me wonder, and then you supposedly now have McLennan saying different to what he was indicating earlier, you got Eddie Jones etc saying Aus need to be back to 3 teams and concentrate their talent to make Wallabies stronger, we have some saying that Super 12 was the best model (which I kind of agree with) but that got changed because Aus and SA wanted more teams, so buggered if I know where it will go!
By the way Sumo Steveson's is only an opinion piece!

Given what has transpired over the last couple of days, I think what he was inferring was that he's looking at this Big Bash imported players type approach as a solution to our lack of depth, not that he's looking at dumping a team.