WELLINGTON, New Zealand >> New Zealand Rugby has been given approval to sign a ground-breaking deal with California-based private equity firm Silver Lake which will bring a cash windfall but which some observers fear may threaten the “special bond” between New Zealanders and their national team, the All Blacks.

NZR chairman Stewart Mitchell described it as a “monumental moment” for the sport.

Silver Lake will pay around 200 million New Zealand dollars ($130 million) for a share of between 5-8% in NZR’s future commercial revenues, which it pledges to use its expertise to increase.

NZR will use the money to improve player pay, support grassroots rugby and shore up its own finances which were hard-hit by the COVID-19 pandemic.

Delegates to New Zealand Rugby special general meeting on Thursday voted 89-1 to support the deal which took almost two years to come to fruition because of initial opposition from the Rugby Players’ Association.

The RPA urged the sport’s administrators to consider alternative investment sources, including a share float that would allow small New Zealand investors to have a share of the All Blacks.

Almost NZ$37 million ($24 million) will be distributed almost as soon as the deal is signed; NZ$1 million to each of New Zealand’s top-level provinces, NZ$500,000 to lower-tier provinces, NZ$2 million to Maori rugby, NZ$7.5 million to clubs and NZ$5 million to the players association.

NZR will also seek between NZ$62.5-100 million ($40-65 million) from New Zealand institutional investors, and Silver Lake will have the option of increasing its investment if that isn’t raised.

The Silver Lake deal will see the establishment of a new entity known as CommLP which will hold all of NZR’s commercial assets and in which Silver Lake will have a minority shareholding. That would give the U.S. firm between 5.7-8.6% of revenues from broadcasting rights, ticket sales, merchandising and other commercial activities.

Silver Lake also will have an 85% holding in Global Rugby Opportunities (GRO), a newly-formed entity charged with seeking out new “rugby-related opportunities” for New Zealand Rugby.

An independent report commissioned from PWC for provincial unions and leaked to media before Thursday’s meeting contained warnings about possible pitfalls of the Silver Lake deal.

The report warned that once the deal was signed, the “genie would be out of the bottle” and NZR could not go back to its previous commercial structure unless it was able to buy back the Silver Lake stake.

The report said the initial cash injection would help NZR’s finances at a time of falling participation and viewership. It also also would allow NZR to explore commercial opportunities overseas with less risk.

But PWC warned CommLP would have to increase revenues by around 8% per year to offset Silver Lake’s share of income that previously went directly to NZR.

PWC said the “achievability of the new business initiatives remains uncertain” but added they would be “more achievable with Silver Lake as a partner.”