It's highly unusual for a sporting board to take action over a sponsorship deal. Yet, it has now occured. New Zealand Rugby (NZR) has done so against the Sir Jim Ratcliffe-led company. This is in regard to a premature termination of a sponsporship deal.
The dispute stems from a six-year partnership deal that was signed in July 2021, making INEOS, who are now part owners of Manchester United, an official performance partner of the All Blacks and six other national teams under NZR's banner. This agreement was initially valued at NZ$8 million (R83 723 760) per year, running from 2022 until 2027.
The deal included INEOS branding on the back of playing shorts and on the front of training jerseys for the three-time world champion All Blacks and other national men’s and women’s rugby teams.
According to The Telegraph, NZR has now alleged that INEOS defaulted on it's first installment of the 2025 sponsorship fee, effectively confirming it's decision to terminate the agreement three years ahead of schedule. INEOS chairman, Ratcliffe, has yet to publicly comment on the allegations.
New Zealand news sources had it that INEOS was wanting to exit from the last three years of the six year deal and that triggered the non-payment of the first installment.
SportBusiness (UK) reported on 24 January, that "INEOS, led by Sir Jim Ratcliffe, is currently undergoing a review of its sports investments amid a plan to shed what it considers, "non-core assets," according to sources close to the group."
A day earlier, INEOS Britannia, the 2024 America's Cup Challenger announced that it was splitting from it's skipper, Sir Ben Ainslie and his Athena Racing team. INEOS' sport division oversees it's interests in football, sailing, Formula 1, cycling and running. It has dropped its reference to Rugby.
However, one notable change suggests that the company has already distanced itself from the partnership as the dedicated webpage on INEOS' official website that previously highlighted it's involvement with NZR has been taken down, now displaying a, "page not found" error. Moreover, NZR is believed to be taking swift action to remove the INEOS logo from the national team’s kits ahead of their upcoming international matches.
NZR said INEOS had informed it at the end of January that it intended to exit the agreement effective from 1 January. In their statement, NZR emphasised that they had no alternative but to take legal action against INEOS.
It read: "New Zealand Rugby is disappointed that Ineos has breached its sponsorship agreement. Most recently, it failed to pay the first instalment of the 2025 sponsorship fee, confirming its decision to exit our six-year agreement."
"Having learned of INEOS' decision to walk away three years early, we have moved to protect the interests of New Zealand Rugby and the wider game. We have been left with no option but to launch legal proceedings to protect our commercial position."
"NZR is actively pursuing new commercial opportunities and global interest in the All Blacks and other Teams in Black remains high. We are committed to being world class on and off the field and deliver unique value to sponsors through our iconic brands."
"New Zealand Rugby is confident that its renowned All Blacks brand remains one of the most appealing in world sport and, following considerable commercial success, says that it, "looks forward to building on that with new partners and fulfilling our purpose of seeing rugby thrive."
INEOS also backed Britain’s America’s Cup bid last year but announced in January it had split with skipper Ben Ainslie’s crew which lost 7-2 to New Zealand in the final series.
Former New Zealand Rug,b chair, Dame Patsy Reddy is playing down the potential financial impact of INEOS pulling out of its sponsorship deal with NZR, saying she doesn't believe it will be a, "major setback" for the governing body. Dame Patsy told RNZ's Nine to Noon that New Zealand Rugby first heard of potential issues with INEOS' sponsorship in 2024. "It was during the course of last year," Dame Patsy said. "This has been a discussion for some time."
Dame Patsy believes NZR should pursue legal action against the company, chaired by British billionaire Sir Jim Ratcliffe. "Ultimately NZR is quite entitled and should stand up for its legal rights."
The INEOS sponsorship was believed to be worth about $44 million and there are concerns the end of the deal could deliver a serious financial blow to New Zealand Rugby, which recorded a $9 million loss last year.
However, Dame Patsy doesn't think it will have a significant impact. "It is a big sponsor, but it won't cause particular problems. NZR's got a healthy balance sheet, and there are a lot of sponsors keen to support NZR, so I don't see this being a major setback," she said.
"It's definitely undesirable and NZR and probably all New Zealanders would like to see INEOS comply with its legal obligations and contractual responsibilities, but it's not fundamental."
INEOS has said it wanted to adjust the sponsorship deal but NZR chose to pursue legal action instead.
Dame Patsy said New Zealand Rugby, led by chief executive, Mark Robinson, have tried to make things work. "There's no doubt NZR is always keen to engage with it's sponsors and to assist them. It's really important that's a mutually respectful relationship and it always is with our sponsors. This one has broken down, but it wouldn't have broken down overnight."
The INEOS news comes at a time when NZR is also renegotiating broadcast rights and other significant income streams. Sky is believed to be significantly cutting it's offer. Dame Patsy said the broadcast rights deals will be key for NZR and believes the governing body will be considering other alternatives to Sky.
"Broadcast is a very important contractual relationship for NZR as it is for all rugby unions. So, yes, it's very very important, and that is ongoing. And, I'm sure they're making positive progress. I'm sure they're looking at all options. You don't put all your eggs in one basket too soon."
Professional rugby faces financial challenges around the world and Dame Patsy said New Zealand Rugby is positioned as well as anyone.
"Finances are an issue for all sports and professional sports around the world. Other than in the U.S.A., where we've seen the extraordinary growth in their NBA basketball and also we've just seen the NFL Super Bowl. It's extraordinary the size of that.
"Professional sports are challenging. World Rugby is no different and national rugby unions around the world, they've all got financial sustainability challenges. But in the context of those, NZR is well placed."
A former All Black who questioned the partnership says INEOS deserves to be in legal strife for failing to honour its sponsorship deal with New Zealand Rugby. Chris Laidlaw was among 100 Kiwis to sign a public letter to NZR denouncing the All Blacks' sponsorship with the global petrochemical company.
He said, "I hope that sanity prevails and that INEOS does honour its contract, at least for the rest of the term, and otherwise it deserves to suffer. If somebody breaches a contract in what appears to be a very high-handed manner, then they deserve to be hammered."
He acknowledged that while sponsorship was a risky business, due diligence must still be carried out. "Nobody ever knows what goes on in the background in these kind of deals and I see that they have run into trouble with other organisations as well. But a deal is a deal."
Laidlaw hoped NZR may be in a position to be more socially conscious about future sponsorships.
"In principle, of course they should, but it’s a pretty narrow field. I think when it comes to large-scale sports sponsorship. There aren’t many people out there who are prepared to do a deal with sports. But if you can avoid a large-scale petrochemical company; then certainly the advice would be yes, but we all know that New Zealand is really desperately short of income."
Former NZR chief executive, David Moffett, said ultimately should they be unable to settle out of court, the only winners were going to be lawyers. "There will be damage to both brands. They should try and settle it, but if not I hope from New Zealand Rugby’s perspective, they have had really fantastic advice, which says that they’ve got a winnable case because otherwise it will be expensive."
Moffett questioned where Silver Lake – a NZ Rugby equity partner – has been during the battle with INEOS. "They came in and promised a whole lot of things and I don't know what they've actually achieved, and now when the going gets tough, where are they? It would be interesting to know the role that Silver Lake has played in trying to get this resolved."
Moffett said during his time at the helm, he was faced with a similar sponsorship issue, though it would not reach the levels of the soured INEOS deal.
"The only instance we had was when we did the Adidas deal, and some players had contracts with Mizuno to wear their boots. So we had to do a deal with their managers to buy them out of that because obviously the Adidas deal involved the entire kit, which included boots, so, it’s not unheard of, but the public wouldn't have even known about it. For New Zealand Rugby to make it public, it's obviously a very serious situation."
He said modern-day sponsorship deals can be a minefield. "You don’t take on an organisation like INEOS and the billionaire owner without having a really good strong court case. So I hope they have got one of those."
Wellington Rugby Board chairman, Russell Poole, said they were given the heads-up about the pending legal action. "I feel for them. Obviously it’s a big deal, a big partner and they would've been working hard to try and avoid the situation, it's something no one would've wanted.”
The fallout with New Zealand Rugby adds to a growing list of controversies and setbacks involving INEOS' sports ventures. Recently, the company ended its America's Cup partnership with Ben Ainslie, a move that stunned the sailing world. Additionally, there have been major leadership changes within the INEOS Grenadiers cycling team.
However, Ratcliffe increased his stake in Manchester United to 28.94 per cent in December and injected an additional £79.3 million as part of his investment commitment. However, the club continue to struggle under Ruben Amorim with the team currently sitting 13th in the Premier League standings. They will return to action against Tottenham on Sunday in north London.
It's hard to argue against NZR. They were willing to fulfil their end but INEOS refused on their part. It's only fair that INEOS face the consequences of breaching a contract. I can't imagine a situation where they go scot free of their actions. In that case, the world must flat and pigs will soon roam the skies.
I'm sure the board will be fine financially. Rugby is very popular sport among most countries; especially New Zealand. Sponsors will soon come to them and status quo will soon arrive.
Are you good at predicting scores on various sports? Are you willing to put money where your mouth is? If so, register for Hollywoodbets through the link below and see how successful you are.
Good Luck! As always, no persons under the age of 18 are permitted to gamble. Winners know when to stop. T & C's apply.