All Blacks rugby great hits back at conflict of interest claims

Former All Blacks captain and World Cup winner David Kirk has rejected claims there's a conflict of interest surrounding the New Zealand Rugby Players' Association's latest private equity proposal.

On Friday, Forsyth Barr tabled an alternative to Silver Lake's offer of investment in New Zealand Rugby that values the organisation between $3.4 billion and $3.8b - 12 per cent to 23 per cent higher than Silver Lake's - and keeps that investment in the hands of New Zealanders.

Kirk serves as the president of the NZRPA as well as chairman of Forsyth Barr, stirring up concern there could be a conflict of interest.

But speaking on Newstalk ZB, Kirk said that based on his position at Forsyth Barr that is not the case.

"I'm an independent non-executive chair of the business, I have nothing to do with the negotiation with the agreement to employ Forsyth Barr to do this work. Forsyth Barr already does some work with the Players Association in managing money," he said.

"There's no conflict of interest here at all."

In response to the proposal, New Zealand Rugby boss Mark Robinson accused the NZRPA leadership of an "attempt to destroy the Silver Lake deal" - despite a unanimous vote for the deal by the country's provincial unions and Māori Rugby Board.

In a leaked staff email, Robinson said the relationship between NZR and the NZRPA was "at a new low".

Kirk admits he was surprised by NZR's reaction, and has questioned the governing body's staunch loyalty towards Silver Lake's investment offer, accusing them of illogical thinking. He laid out the questions he wanted to ask the organisation about its response to the Forsyth Barr proposal.

"Why are you so concerned about alternative options? Why won't you consider them? You're charged with doing the best thing for New Zealand rugby, surely the best thing is to look at all these options, consider them carefully, and then make a decision.

"It's not logical not to want to look at all the offers. They said to us and they said to the provinces ... 'there is only one option, that's Silver Lake. We've looked at the other ones and none of them stack up'. Well, that's not true.

"Forsyth Barr have presented an option in which there's a higher valuation ... and the opportunity to raise money quickly and efficiently on the New Zealand stock exchange. That's a real alternative.

"I would urge them to step back a bit, take a deep breath, and let's talk about this."

In reaction, Robinson insisted NZR "took time and care" to explore all options.

"We considered and then rejected several – a public listing on the NZX, debt funding and a capital raise in New Zealand. All were robustly assessed against our key objectives.

"Some of these options would have helped us to meet some of our objectives but none of them would have helped us to meet them all. Debt does not provide capability, and we do not have assets to secure that debt.

"A capital raise in New Zealand does not provide the value of the Silver Lake deal either from a financial or capability perspective and an IPO still would involve selling off a stake of our commercial revenue but without adding the precious capability we need to move forward.

"None of them would have provided New Zealand Rugby with the strategic benefits we will need to keep pace with the global game and ensure we are not left behind. And, critically, none of them can sufficiently support the long-term investment required for our grassroots."

Kirk rejected suggestions that the NZRPA had supplied confidential information to Forsyth Barr in order to create a competing offer.

"I don't think it's a breach of trust at all. All of us, collectively in New Zealand, are looking at a situation in which rugby is going to change forever in New Zealand.

"The thought that we wouldn't discuss and debate the various options that are available ... is just nonsensical."

Kirk described the response from NZR as "unnecessarily emotional and aggressive", and claimed the "war of words" was coming solely from the other side.

New Zealand Rugby has registered financial losses across five of the past six years - with 2017 being the lone silver lining, helped largely by the British and Irish Lions tour - rendering NZR a less than desirable business to invest in.

But Kirk isn't reading into the numbers. Instead he's looking at NZR's recent revenue growth.

"I don't think there's any doubt, given that New Zealand Rugby has grown revenue at 8 per cent a year consistently for 15 years, that they can run the business at a profit if they choose to."

Meanwhile, Andrew Ritchie, the chairman of the Northland Rugby Union, said Forsyth Barr's proposal is an unfortunate and shameful distraction that lacks the substance to deliver the benefits to grassroots New Zealand rugby of the existing Silver Lake deal.

"I think this sideshow spin is more about Forsyth Barr than it is about what is truly good for the future of rugby. All they have presented is a lot of puffery, which will amount to nothing except leaving rugby communities a lot worse off," Ritchie said.

By contrast, he said, the Silver Lake deal ensures a bright future for New Zealand Rugby at all levels; from the country's best representative players to the grassroots communities in the heartland.

"This is about delivering so much more than just the significantly higher sum of money going to all levels of New Zealand rugby in the Silver Lake proposal but also the benefits of a global sports distribution network that will elevate rugby to levels we have never experienced before and open new opportunities including for the women's game."

However, Kirk disagrees, saying the Forsyth Barr proposal will deliver the same amount promised to provinces, women's rugby and the New Zealand Māori Board in the Silver Lake deal, while talk of adding value to the brand through international exposure and marketing is purely speculative on Silver Lake's part.

"I think it's reasonable to say that future growth in New Zealand rugby will come from traditional sources: It will come from media deals and it'll come from sponsorship ... you don't need Silver Lake for that at all."