NZ Rugby has voted in favour of selling a stake to US investors Silver Lake at its annual general meeting on Thursday.
The vote - cast by the 26 provincial unions and New Zealand Māori Rugby Board - was to offload a 12.5 percent share of a new entity named Commercial LP to the American tech giants at the price of $387 million.
Commercial LP will control NZ Rugby's commercial interests, with $39m of the sale price committed to provincial unions. There will also be a legacy fund established to ensure the sustainability of rugby at all levels.
NZR chairman Brent Impey describes the positive vote for private equity as one of the most significant in the game's history.
"We are thrilled that our provincial unions and the Māori Rugby Board have recognised the importance of private equity in driving commercial revenue and enabling investment to ensure rugby thrives and survives into the future," Impey says.
"Today’s vote for Silver Lake represents a transformational opportunity for our game and one we must grasp."
But the governing body still needs the support of the New Zealand Rugby Players Association for the sale to proceed, who aren't yet ready to sign-off on the deal.
NZRPA boss Rob Nichol says they've paused any negotiations with NZR, meaning any resolution is far from imminent.
"We have agreed to put collective bargaining/mediation meetings on hold for a few weeks to allow us to reconnect with our respective stakeholders," Nichol tells Newshub.
"Between us, we need to resolve what the Collective will look like beyond this year in order for the Players to respond to NZR's request for approval of the proposed Silver Lake transaction."
Impey says NZRPA's lack of consent is disappointing.
"We are at a critical juncture and need our players’ support if we are to make the most of the opportunity in front of us," Impey adds.
"The game has to change, and Silver Lake’s capital injection would allow us to re-imagine rugby and invest in the areas of the community game that need it most, particularly teenage and women’s rugby, and to create better and more engaging experiences for our fans.
"The players are a critical part of this journey, but we have to look at what is right across all levels of the game, our whole eco-system.
"We hope the NZRPA will realise the significance of the opportunity in front of us and will continue to work toward an agreement in coming weeks."
Newshub understands two alternatives were put to NZR in their latest round of mediation talks, which concluded on Tuesday.
One of those was debt raising - where NZR would essentially take out a loan they'd then pay back with interest - and the other, selling a five percent commercial stake in the company to a private investor.
But those would only raise around $90m and $150m respectively, significantly less than what's been tabled by Silver Lake.
NZR has rejected both alternatives, both on the basis that they wouldn't be able raise enough capital and wouldn't benefit the game at grassroots level, which is at the core of the deal.
NZR also announced it had posted a $34.5m loss last year, with an operating loss of $18.7m, during a season ravaged by COVID-19.
It had a 26 percent decline in revenue, totalling more than $55m in the last year.
NZR chief executive Mark Robinson believes it's a positive, given the multitude of challenges the game was posed by the pandemic last year.
"A year ago we were facing a collapse of more than 60 percent of our revenue and had to make some hard decisions in a short amount of time in order to keep costs down, while getting our players on the field and keeping our stakeholders engaged," Robinson says.
“From the Heartland unions’ decision to cancel their representative season, to the extra hours our staff and players have put in, the past year has been difficult, and we acknowledge the hardships felt by our people at all levels across the game."