"A very high level of financial risk."
That's what the New Zealand Rugby Players’ Association has called NZR's proposed deal with US tech giant Silver Lake.
In leaked documents obtained by 1 NEWS, the association claims NZR will be a loss-making operation within five years if this deal goes ahead.
The leak comes after the 26 provincial unions unanimously voted in favour of the $387.5 million deal at yesterday’s AGM, which would see NZR bundle its commercial interests into a new entity and sell a 12.5 per cent stake in that entity to California-based Silver Lake Partners.
In the documents, the association state they have their own modelling which shows the Silver Lake deal would "introduce a very high level of financial risk" which could even lead to rugby's core business being unprofitable "forever" if predicted revenue increases didn't eventuate.
But NZR says that modelling is flawed and that they're using selective data to support their arguments by not accounting for rugby's unique economic model.
The biggest disagreement seems to stem from the players' share of the pie.
NZR says the players need to give up some of their 36 per cent share of the game to make the deal work but when that deal works, they'd actually be financially better off, and so would the grassroots game.
The players disagreed, putting forward two counter-proposals.
The first proposal was that the union takes on debt while the other was to sell a five per cent stake in the union to Kiwis directly.
NZR chairman Brent Impey and NZR chief financial officer Nicki Nicol said yesterday neither proposal works though.
“The answer on debt is simply this - we don't actually have any assets other than our commercial rights,” he said.
“So as a director, I couldn't sign a substantial debt facility because I couldn’t warrant that it could be repaid, and that's the critical part.”
“Kiwis already pay a lot of money to support the game, which is fantastic because it's part of our national identity,” Nicol added.
“But we believe revenue growth is offshore.”
But it's a lot closer to home where the problems lie now in a stalemate with the two parties set to come back together again next week.