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OPINION:
New NZ Rugby backer Silver Lake says it wants to boost the brand value of the All Blacks, and bring in $76 million in extra revenue over the next five years - the better to help our national team grow, and provide more funds for grassroots rugby.
They could well succeed. The Silver Lake crew are smart people with a successful record.
On top of their high-profile sports investments in recent years (including stakes in Manchester City's corporate parent, the UFC and the firm that owns the NBA's New York Knicks and the NHL's New York Rangers), companies in their core tech stable continue to engineer big deals.
Silver Lake's current portfolio includes EverCommerce, which last year bought Dunedin's Timely in a $135m deal and Unity, recently in the news for its $1.6b purchase of Weta Digital's technology division from Sir Peter Jackson.
The deals keep coming. Silver Lake is said to be in talks with Rugby Australia for a deal similar to its NZ Rugby arrangement ($200m for a 5.7 per cent stake in NZ Rugby's commercial arm), with another $100m possible through a local co-investor, which would take its stake to 8.6 per cent at a $3.5b valuation).
Silver Lake has already been active across the Tasman, where in December it paid $140m for a 33 per cent stake in Australian Professional Leagues, best known for its A-League competition that includes the Wellington Phoenix.
But there are a number of complicating factors when it comes to the All Blacks, which could mean that boosting their brand value is harder yards than the likes of Man City.
Compared to other teams in the Silver Lake stable, the ABs barely play.
At first blush, this seems like an opportunity. Playing more games is an obvious route to the All Blacks generating more revenue - particularly sponsor-friendly exhibition games in the US, and more matches in Europe.
But in the build-up to the Silver Lake deal, David Kirk said playing more games isn't feasible because of the physical toll it would take on players. (Kirk, best-known for captaining the All Blacks to their first World Cup win in 1987, is today chairman of Forsyth Barr, and initially proposed an alternative local capital raise; the final deal has a provision for a possible $100m local co-investment).
And there are other complications.
Former Sky TV chief executive John Fellet was - and is - a big believer in the commercial value of the All Blacks. But at a results briefing towards the end of his tenure, he discussed the ABs' relatively light schedule.
It was problematic he said, because if you were a football fan in the UK, then your club was your main team, while your national team was an afterthought (and try to find me a Liverpool fan who wouldn't trade England losing the Euros for the Reds winning the EPL).
The same goes for basketball, baseball and football teams in the US. In NZ the opposite is true. Regardless, the All Blacks are our only team with global brand heft - so their schedule is the one that matters.
And, in the Silver Lake universe, it's light.
Last year, the All Blacks played 15 times. In the pre-Covid 2019, they played 12 matches (including seven in the World Cup). In 2018, they played 14 games.
Compare that to the Silver Lake-backed Manchester City, who played 58 games in the 2021/2022 season (between the EPL, FA Cup, League Cup and Champions League) and still have a three-game exhibition tour to go.
And the New York Knicks played 82 games in 2021/22.
But it's easy to imagine that any attempt to add more All Blacks fixtures will undermine Super Rugby and, if Kirk's comments are anything to go by, generate push-back from the Players Association (of which Kirk is president).
Silver Lake wants to use digital technologies to target some 10 million to 60 million All Blacks fans around the world.
Part of this could involve boosting the All Blacks' profile on social media, which in turn should help generate more sponsorship revenue (ad-sharing revenue is miserable - in the single-digit thousands, even if you generate tens of millions of views on social).
There's certainly room to grow in this department. The All Blacks' social media following is modest next to other sports teams with a global profile. The ABs have 4.7 million followers on Facebook, 1.9 million on Instagram, 1 million on Twitter, 651,000 on TikTok and 468,000 on YouTube. Man City, by contrast, has 43 million followers on Facebook and 32 million on Twitter. If you want to justify a $3.5b valuation, that's the sort of levels you have to be shooting for.
A global streaming platform is said to be one route to monetising that global fanbase, too.
Problem: It's already been tried, and failed, with RugbyPass.
Back in 2016, US giant Discovery invested millions in RugbyPass, co-founded by the Kiwi crew behind the short-lived but ground-breaking PremierLeaguePass.
RugbyPass charged US$14.99 to stream top-tier live rugby on its platform, which operated in dozens of territories and targeted rugby-mad expats and other fans and others who were living outside the big rugby-playing countries, in locations where local streaming rights were not locked up.
Sky TV NZ loved the concept too and in 2019, it bought RugbyPass - by then streaming to punters in 62 countries - in a deal worth up to $62m with earnouts.
But in August last year, Sky - which never released standalone RugbyPass numbers - wrote down almost its entire investment based, in part, on RugbyPass' "current performance" and "new strategic direction" away from streaming-based subscriptions (the site still hosts articles and podcasts).
There have been plenty of other global streaming initiatives, including NZ Rugby experimenting with YouTube streams of All Blacks tests to viewers in countries without rights deals, and AllBlacksTV.com, which offered games on the ABs' 2017 northern tour, which offered All Blacks matches for $25 a pop.
It was never revealed how many punters around the world were willing to pay that price, but just don't try visiting AllBlacksTV.com today, where there's nothing more to see than a blank screen.
And while various sports bodies' direct-to-consumer streaming services are touted as the Next Big Thing today, they have non-exclusive content - and in territories where they are available, they reduce the value of local broadcast rights.
Similarly, while various Premier League club channels - available through smart TVs, apps or the web - are often hyped as next-generation game-changers, digital this-and-that game changers, their owners have been coy about attaching any figures to them.
That could be because, in reality, the content is not that compelling. Take Man City's City+, for example, which costs £1.99 per month.
City+ carries no live games featuring City's first 11 - whose rights are tied up by Sky, BT and Amazon in the UK, and their peers around the world. You can watch games on replay - but then you'll already have an on-demand option from your live provider. You do get women's, under-18 and development squad games live, plus various bits of documentary and behind-the-scenes footage - but that's often raided to provide content for City's social media channels, which are of course free.
The team won't break out numbers, but I'm guessing City+ membership is restricted to hardcore fans.
The US-based Glazer family has to be pretty happy with its investment in Manchester United, which they bought for around £800 million two decades ago - and which they still hold a majority of voting shares in today at a time when the Nasdaq-listed club has a market cap of US$1.9 billion.
This month, the Glazers will pocket some £11m in dividends on growing revenue.
By any commercial measure, the Glazers are ahead, but United fans protested as the club's third-quarter financials were released. By any sporting measure, their season has been a misery.
By contrast, the sports teams and competitions in which Silver Lake has a stake have all done well commercially, and in Manchester City's case, have been dominant on the field, and have seen their valuations rise.
According to Forbes, the value of the New York Knicks has increased from US$3.3b when Silver Lake bought into its parent company Madison Square Garden Sports in 2017 to a recent US$5.8b.
And Manchester City's value has increased from US$2.7b when Silver Lake invested US$500m in parent company City Football in 2019 to a recent US$4.3b, according to Forbes' sports team rankings.
And yet Man City and Man United have one thing in common: Last year, their owners joined 20 other top European teams in a proposed Super League - which promised billions more profit but enraged fans, who saw a league where 20 teams (chosen by their commercial pull) had fixed tenure as destroying the promotion, relegation and fight-for-a-Champions League spot that provides too much of football's drama.
Fans literally took to the streets. The clubs only backed down after the UK Government made it clear it would step in, if necessary, to protect the status quo - but it's widely thought City, United and others in the UK's so-called Big Six are just biding their time before they have another tilt at creating a breakaway league, and all the new profits they think it would entail.
That's the kind of sports tension that most fans could live without.
The minister has revealed a three-pronged push and is eyeing Aussie mega-fines.