New Zealand Rugby boss Mark Robinson on the Silver Lakes All Blacks deal. Video / Provided
What continues to separate New Zealand Rugby from the New Zealand Rugby Players Association in their respective views of the Silver Lake proposal is their assessment of the potential risk and who carries it.
Under the terms of the Silver Lake deal, NZR asked NZRPA to agree to take a smaller share of the significantly larger potential revenue.
Players currently receive 36.5 percent of NZR revenue – known as Player Pay Pool (PPP) which has averaged around $ 190 million over the past five years.
The NZR pushes that percentage down to between 30 and 32 percent, but estimates that total revenue will surge to around $ 350 million by 2025 if Silver Lake takes part and will potentially climb again to somewhere closer to $ 500 million a year later. that.
Players will get a huge windfall if they agree to a deal in its current form and Silver Lake is able to make a transformational change in their promised annual income.
Both the NZR and NZRPA agree that it is imperative that there is enough money available to keep the salaries of New Zealand’s top players competitive and for the country to continue to retain talent.
But the NZRPA has a different view to the NZR on the level of risk inherent in the proposal and it is these issues that need to be resolved in the follow-up mediation discussions planned for this week.
Silver Lake has not detailed its revenue growth plans. They have made an ambitious forecast based on a broad concept that effectively boils down to making money from an offshore All Blacks fan base that is believed to be as high as 65 million.
The NZRPA is not exactly anti-Silver Lake or underestimating its ability to make money as it says it can but needs to look in more detail to have more confidence.
The player body would also like to have a better understanding of how the NZR could reduce the risk of a deal not generating as much revenue as it had anticipated.
The proposal is for NZR to sell 15 percent of its future revenue but continue to be responsible for 100 percent of the costs of running the game.
If growth is not as high as forecast, the NZR could find itself with less, not more money as it will only have an 85 percent share of future revenue but still be responsible for meeting the fixed costs of playing players and provincial guilds.
The fear is that if income growth fails, the NZR could be forced to sell more assets to save.
The NZRPA can negotiate to protect professional players from the downside, by including a clause that requires NZR to fulfill its agreed obligations to PPP.
But doing so would jeopardize the funding available for other parts of the game and would ultimately be catastrophic for everyone.
The two bodies, who spent Wednesday locked in mediation talks, are actually more in tune than has been described.
They agreed on the need to inject more capital into the game and found ways to use it to help foster and maintain community play.
However, they need to find ways to mitigate potential risks in such a way that they do not force larger sales or assets or jeopardize future investment at the grassroots.