Crusaders open gate for private investors; could Vbase be an option?

Photo: Getty Images
Photo: Getty Images
A far-reaching plan to safeguard the Crusaders’ financial future is reaching fruition through a ground-breaking deal.

Southern hemisphere professional rugby’s most successful club can now ramp up plans to entice private investors and capitalise on new revenue streams after negotiating a revolutionary licencing agreement with New Zealand Rugby.

Two years after the Crusaders management and board embarked on a game-changing financial model, a contract enabling overseas and domestic investors to commit in perpetuity can be revealed today.

Some commercial revenues previously diverted to NZR can now also be retained by the Crusaders while any new initiatives will boost the Christchurch-based organisation’s coffers.

The Hurricanes, Chiefs, Highlanders and Blues have all had private investors as part of their business model, while the Crusaders are run by six provincial unions, led by Canterbury and Tasman.

While those unions still form the shareholding bedrock, Crusaders chief executive Colin Mansbridge is confident of securing a significant cash injection to protect the club’s future through investment and innovation.

“Most Super clubs have made virtually no money for a decade. It’s been a marginal financial model and there’s been quite a bit of tension around where certain commercial rights reside,” Mansbridge said.

“Certain commercial rights are now ours for perpetuity and in the event that new rights are invented they default to us. In the past if there was a new right it defaulted New Zealand Rugby.”

Licencing agreements between NZR and the Super Rugby club also ran for the duration of the competition’s broadcasting agreement, a possible impediment to investors making a longer-term commitment.

“We were almost limited to what we could do so this is a fundamental break from almost a survival mentality where every broadcast deal you sort of limp your way through to the end,” Mansbridge said.

Colin Mansbridge
Colin Mansbridge
“We now have the potential for shareholders to invest in perpetuity and we’ve got the right to innovate and create new (commercial) rights.”

Mansbridge would not specify how much monetary investment was targeted, but with NZR footing the bill for the player salaries and two coaches, financial resources are stretched covering the likes of high performance staff, the academy programme and hosting games.

Once new investors stump up – the first band should be revealed around August – Mansbridge said boosting the membership programme was among the priorities.

“Infrastructure around the way we deal with our fans is probably not where it should be,” he said.

“But when you’ve got very little capital in your business and you’re basically looking to survive, you don’t invest in those things.”

Mansbridge added equity partners armed with deep pockets were not the only investors sought.

“It’s not about the price and the cash, it’s about adding value to both organisations,” he said.

“Some potential investors have said ‘I bring sports science capability that you guys don’t have’.

“We had potential partners say look: ‘We’d like to understand why you’re successful, we want to come in and study you and take that back to our sport or our institution and at the same time we realise we can’t just come in and take it off you’.

“I’ve spoken to clubs and codes in the northern hemisphere about partnering and it’s feasible to see a top sports club or institution actually turn around and say: ‘We think we can learn something from this place’. And they’d be prepared to pay for that right.”

Mansbridge conceded the Crusaders were unlikely to team up with a Saracens or a Toulon, given the end game is to be the most successful rugby club in the world.

“We’re hoping we’re going to beat them in a world club challenge,” he said.

“I genuinely see us competing against the top clubs in the world at some point.”

Could Vbase be an investor?

Ratepayer-funded city council venue and events management company Vbase has been touted as a potential player in the Crusaders ambitious plan to attract local and overseas investors.

While Pricewaterhouse Coopers have been empowered to cast their net globally on behalf of the 11-time Super Rugby champions, Vbase, which will run the proposed Christchurch Multi Use Arena, are understood to be an option closer to home.

Crusaders chief executive Colin Mansbridge would be surprised if PwC had not spoken to Vbase.

“I know they’ve got a bunch of local and international investors that they’ve been talking to,” he said.

“I can’t unequivocally say Vbase is on the list but it would not surprise me if they are.”

Vbase chief executive Caroline Harvie-Teare said the organisation, which downsized significantly when Covid-19 decimated the city’s events industry, had not received an investment proposal from the Crusaders.

She would not answer a subsequent question from The Star if there had been any contact with PwC.

Vbase yesterday announced it is set to change its name to Venues Ōtautahi later this month.

Mayor Lianne Dalziel would not comment on whether the council would be interested in investing in the Crusaders because there was no proposal at this stage.

City councillor Yani Johanson was lukewarm on the prospect of ratepayers investing, by proxy, in a professional sporting organisation.

“I’m a bit cynical of how much subsidy we’ve given to rugby as a professional sport, there were huge subsidies for the temporary stadium,” he said.

“I find it quite ironic that there are huge subsidies for professional sports and there’s no ratepayer funding for social housing.”

Deputy chair of the council’s finance and performance committee Sam MacDonald, doubted an investment partnership would eventuate.

After being contacted by The Star, city council staff told him: ‘No, no definitely not,’ in response to the council buying shares in the Crusaders.

MacDonald said a financial contribution to the Crusaders would be “that contentious” it would have to be signed off by council.

But Johanson was wary given Christchurch International Airport – a business run under the council-owned Christchurch City Holdings Ltd – had already spent $45 million on a new airport in Tarras, Central Otago.

“The airport decided to consider building a new airport and that never came to us,” he said. 

“My personal view is there has to be greater transparency around where the costs fall. You’d expect to understand what the financial risks were and you’d expect to know why it was a sensible thing to do.

“It’s something we’d have to consult the community about.”

A city council spokesperson confirmed council staff would need to bring a formal report to elected members if a proposal was put forward.

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