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All Blacks captain Sam Cane is one of the players leading opposition to the Silver Lake deal (Getty Images)
All Blacks captain Sam Cane is one of the players leading opposition to the Silver Lake deal (Getty Images)

The BulletinApril 29, 2021

The Bulletin: Massive NZ Rugby buy-in going to Golden Point

All Blacks captain Sam Cane is one of the players leading opposition to the Silver Lake deal (Getty Images)
All Blacks captain Sam Cane is one of the players leading opposition to the Silver Lake deal (Getty Images)

Good morning and welcome to The Bulletin. In today’s edition: Massive NZ Rugby buy-in to be voted on today, research finds modern slavery embedded in import supply chains, and Māori Party referred to SFO. Plus, a feature lifting the lid on what it’s really like to work in the press gallery.

The stakeholders of an enormous, multi-million dollar business will vote today on a controversial buy-in offer from a private equity firm. That business has extremely deep roots in New Zealand, and much of the opposition to the offer revolves around the idea that something intangible and unique will be lost if it goes ahead. I’ve framed the issue like that because I reckon a lot of readers will be turned off by the idea of leading with a rugby story, but really, it’s a story about business, globalisation and culture all rolled into one.

So, what are the key details? Radio NZ reports that NZ Rugby will today ask their AGM to confirm a buy-in deal from Silver Lake Partners, a US-based private equity firm which manages assets in the high tens of billions of dollars. What they’re proposing is a $387 million buy-in, for a 12.5% share of a new  entity which would control NZR’s commercial interests. For those who have followed the story for a few months, those numbers recently came down from 15%. Out of that buy-in, tens of millions would be paid out to struggling provincial unions, and a ‘legacy fund’ would also be created – sort of like how Norway’s oil revenue gets put into a fund that keeps the welfare state going.

The numbers being thrown around are staggering, but are they really believable? For example, Stuff reported in February that Silver Lake has valued the commercial opportunities at $3.1bn, and believes there are 60 million potential fans of the All Blacks who could be tapped to spend money. The All Blacks are apparently seen as being close to on par with truly global sporting brands, like football club Manchester United. How would those opportunities actually be obtained? That’s less clear, but it is clear that nobody at NZ Rugby is currently capable of making it happen, and outspoken supporter of the deal Sir John Kirwan argues that Silver Lake knows what they’re doing here.

But hear me out here – maybe offers from monster-sized private equity firms actually can be too good to be true. For example, big private equity buy-ins have certainly ruined plenty of once-great newspapers, which get bled dry in an effort to extract value for their new owners. And that in turn raises questions about whether extracting value really is the right thing for custodians of a national game to be trying to do. Many of the current players appear to be concerned about what they’d be signing up to, if the excellent reporting of the NZ Herald’s (paywalled) Liam Napier is anything to go by.

And the Player’s Association has a veto over the deal, even if the provincial unions vote in favour. Part of the issue appears to be the share of revenue that goes into a pool for players. But at other points the players have expressed wider cultural concerns – you can read excerpts of the letter setting out their position on Rugby Pass – including that taonga like the haka could be hijacked, in a bid to monetise the culture surrounding the All Blacks. Stuff reports NZ Māori Rugby Board boss Dr Farah Palmer has put a stake in the ground on that particular point, saying it won’t happen.

There are two other important points when the wider position of rugby is considered. The first is that the game is arguably in trouble, having fallen from a place of being a pre-eminent sporting superpower within the country, to being merely a major power. Kids don’t play at remotely the same rates as they once did, club rugby for adults is dying, and the entertainment options now available to punters are endless. NZ Rugby sees this money as crucial to turning all that around – but the counterpoint is that if handled poorly, it might accelerate the process. Because the other point is that many people simply see big money in sport as grubby and unattractive. That case is put very persuasively by Stuff’s sports crank Mark Reason, who raised the recent spectre of the fan backlash against the bid by major football clubs to form a European Super League. The AGM and voting will take place today, but don’t expect to hear the final whistle on this quite yet.

Research from World Vision has found billions of dollars worth of imports into New Zealand are linked to modern slavery. The problem is many companies simply don’t want to know what’s going on in their supply chains, and so can more easily turn a blind eye. Writing on The Spinoff, Grant Bayldon of World Vision said the research shows the government must introduce legislation to address modern slavery in supply chains.

The Māori Party has been referred to the Serious Fraud Office over a failure to declare $330k worth of donations. Stuff reports the party has said it was a mistake, and proactively contacted the Electoral Commission as soon as it was spotted. Meanwhile National has got away with a warning for a similar breach – the reasons for this is that on the face of it National’s breach involved much smaller figures.

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Hundreds of complaints are made about judges every year, but the vast majority end up going nowhere, reports Newsroom’s investigations team. In fact on only two occasions since 2005 has there been a recommendation of formal consequences. Many of the complaints aren’t really within the realms of what the Judicial Conduct Commissioner can consider, because they question the rulings made by judges. However other complaints, for example those that argue a judge has minimised the harm suffered by victims, could probably stand to be taken further than they currently are.

Over the last few days, there’s been a story bubbling away about a man who flew from Perth to New Zealand during the Western Australia lockdown. Newshub reported yesterday on comments from Dr Ashley Bloomfield that people who broke the air border rules could face a fine or even prison time. This particular case involved a person flying from Perth to Sydney, and then on to New Zealand on Sunday. It is still being investigated, and the risk from the person is believed to be very low.

The Act party will push parliament to debate whether a genocide of Uyghur people is taking place in China, reports Stuff. What it would mean in practice is if the Labour party chooses to allow it, parliament could “symbolically admonish” the Chinese government – something recently done by the UK. You might recall Tuesday’s Bulletin that had mention of calls for the government to recognise the Armenian genocide, and a similar sort of calculus will apply here. Even if it’s true that it is happening, the diplomatic headache might prove to be too much for the government to bear.

A right of reply: National MP Nicola Willis was unhappy with how I characterised her position on emergency housing yesterday, so in the spirit of fairness, here is her reply:

Over the past few months, I have shone a light on the unsatisfactory conditions in motels providing emergency housing. I have never stated that they are a “public nuisance”, as inferred yesterday in The Spinoff. I have repeatedly said that the current emergency housing model is not only failing the taxpayer, but also the people who are staying there, a large portion of whom are parents with children,. 

The Spinoff blaming this problem on National is unfair. Labour campaigned on addressing New Zealand’s housing shortage and pointed to motel use as a sign of failure. Despite this rhetoric things are demonstrably worse on their watch. The amount spent per quarter on emergency housing has ballooned from $6.6 million to $82.5 million.

I will keep advocating for change in this area – including urging the Government to work with proven community housing providers to ensure emergency housing users have the support they need to get back on their feet and into stable long term housing as fast as possible. 

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Hiking the Franz Josef Glacier, Westland (Photo: Getty Images)

Right now on The Spinoff: Mirjam Guesgen has an important report about how New Zealand’s glaciers are shrinking faster than anywhere else in the world. An anonymous writer who used to be a state housing tenant looks at the current system, and her anger at it. Tree man Steve Abel writes about the Western Springs forest, and why the issue is about much more than just a few old pines. Tara Ward prepares to return to Gilead by analysing the trailer for the new season of the Handmaid’s Tale. And Angella Dravid explains the difference between MSN and Yahoo chat, in a new episode of First.

For a feature today, a marking of a changing of the guard in the press gallery. The NZ Herald’s long-serving political editor Audrey Young is stepping into a new correspondent job, with current deputy Claire Trevett taking the big chair. On her way out the door, Young wrote a typically useful piece (paywalled) about how the work of the press gallery actually happens, in a Q&A format. Here’s an excerpt:

Do journalists need MPs more than MPs need journalists?

Some politicians go through their careers ignoring the media but not many successful ones. New MPs are sometimes warned during their induction that nothing is “off the record” when it comes to journalists, which is quite untrue. But it might take time for MPs to work out who they can trust. 

But a trusting relationship can be mutually beneficial. Talking to an MP with extensive knowledge of an area but who doesn’t want to be quoted can add depth to a journalist’s and the public’s understanding of the story. But everything an MP says cannot necessarily be taken at face value, either. If the public had to rely solely on press statements, it would be an ignorant world. That said, many politicians pay a great deal of attention to their own social media images and messaging, including Jacinda Ardern.

Big changes could be coming to the structure of the NRL for the 2023 season. Fox Sports reports the competition could be split into two conferences of nine teams each, which sharp eyed readers will notice is an expansion on the current slate of 16. A detail in that story that jumped out was optimism for further expansion into New Zealand, with another new team coming from an existing club in Brisbane. The difference is that a new NZ team would have to be created largely from scratch, so it’s fair to wonder if there would be any way to pull it off in time. There was also no word on whether the NRL refs would also be contractually obliged to whistle against the 2nd NZ team, like they are for the Warriors.

That’s it for The Bulletin. If you want to support the work we do at The Spinoff, please check out our membership programme.

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