Silver Lake Scrum for a Piece of Rugby’s Most Valuable Squad

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Silicon Valley’s Silver Lake Partners is known for making huge sum investments in big name tech companies at the height of their powers.

This week, they’re eyeing a $2 billion investment in broad shouldered men clobbering each other. Reports suggest the firm is close to taking a 15 per cent stake in New Zealand Rugby.

A Private Equity Friendly Match

The deal would put Silver Lake toe-to-toe with European private equity giant CVC Capital Partners, which previously tried to buy a stake in the New Zealand team, commonly known as the All Blacks.

CVC has since turned its attention to a €300 million deal with the Six Nations Championship, Europe’s top rugby tournament, but is said to believe that Silver Lake’s entry as a competitor will boost the global rugby market and benefit both investors.

Rugby is already the ninth most popular sport in the world, with Nielsen tracking 877 million followers and 407 million fans of the sport in 2019 and double digit percentage growth in recent years.

Rugby the Latest Sports Frontier for Smart Money

Sports properties have emerged as highly coveted investments for private equity firms in recent years because of rapidly rising valuations. In 2010, the NBA’s Golden State Warriors sold to a consortium including Kleiner Perkins partner Joe Lacob for $450 million. A decade and three championships later, the team is worth $4.3 billion. Not a bad return.

Silver Lake is no stranger here, either. It spent $500 billion in 2019 for a minority stake in Manchester City F.C., one of English soccer’s top squads.

It also owns a chunk of the consortium that controls Ultimate Fighting Championship, which was worth $4 billion at the time of its 2016 acquisition and is now closer to $9 billion.

The Takeaway: Rugby’s growth in the U.S. and Asia, where audiences have surged in recent years, is where Silver Lake could find a big payday by owning the world’s best team.