### stuff.co.nz Last updated 05:00 06/02/2010
Wellington loses permanent sevens bid
By Dave Burgess – The Dominion Post
Auckland and Dunedin are trying to poach the NZI Sevens after Wellington city officials failed in a proposal to host the $15.6 million event permanently. Wellington’s contract to host the two-day party event, part of the International Rugby Board’s sevens world series, expires after next year’s event. Wellington City Council met New Zealand Rugby Union officials to seek permanent hosting rights. Mayor Kerry Prendergast said that, after 10 successful years, this made sense. “But the rugby union told us there was regional pressure [from other cities to host the sevens] and they wanted to go through the tender process, which is usual business practice.”
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### TVNZ News 6:21PM Saturday February 06, 2010
Wellington Sevens under threat
Source: ONE Sport
The Wellington Sevens is facing possible extinction after their bid for permanent hosting rights has been turned down by the New Zealand Rugby Union. The iconic event that attracts thousands of fans and revellers to the capital will be up for open bidding after next year’s event the NZRU announced on Saturday. According to the NZRU many centres around the country are very interested in hosting the lucrative event. The main competition will most likely come from Auckland and Dunedin whose main stadiums are both undergoing a major upgrade ahead of the 2011 World Cup.
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Post by Elizabeth Kerr
What if? Dunedin... 
and until I had seen this article there was no way that I’d think the 7’s would be taken away from Wgtn.
I think it was a little naive of Wellington to think that they could secure permanent hosting rights. And I’m sure they knew what the answer would be. That would have been crazy for the event organisers to agree to. Mr Davies has previously spoken about his intention to bid for hosting rights, so it’s good that he has the opportunity. Not sure that having Phil Sprey tagging along for the ride is an advantage or a disadvantage.
It will be interesting to see how this plays out. I wonder if the likely rationale behind the NZRFU’s decision to go to tender may in fact hinder Dunedin’s chances. It’s no secret that NZRFU is in financial trouble. They are losing money hand over fist, and expect to lose $30 million in hosting the RWC. Bottom line is that they need money. They need a lot of it. And they need it now.
Holding an auction for the Sevens contract is one sure way of raising their income. Nothing like good competition to boost the selling price. They will sell to the highest price, I have no doubts over that. It’s good for Dunedin that Mr Davies is planning events around the sevens, but I can’t see that influencing a NZRFU decision. If they get gate takings from 30,000 people over 2 days, they really don’t give a toss what else happens in the city. Both Auckland and Wellington will also sell at least that number of tickets.
So, it’s going to come down to who has the most disposable cash. And that’s probably where Wellington and Auckland will hold the edge over us. They haven’t just tied up all of their capital and borrowing potential in building a new stadium. So they can afford to stretch their budgets further than we can.
It’s a strange Catch 22 situation. We wouldn’t be considered without having a new stadium. Yet building the new stadium may result in us not having enough money to buy the event.
It’s a long shot, but good on him for trying.
‘So it’s going to come down to who has the most disposable cash.’ Answer. The Dunedin/ Otago ratepayers – courtesy of the DCC and CST. All done in publicly excluded sessions of the DCC – where the decisions are made, where the costs are scattered into different budgets.
I think the NZRU/IRB would be mad to take the 7s off Wellington. Both Auckland and Dunedin would be financial risks compared to a well established successful venue. There’s no guarantee 50,000 seats per day would sell at Eden Park and Dunedin offers a smaller venue so either less revenue or higher ticket prices. The Festival of Rugby idea might provide wider marketing opportunities for rugby but I doubt it would compensate the loss of revenue.
In order to get the 7s here, is it beyond the realms of possibility that the DCC could act as a ‘guarantor’ to the NZRFU for any losses? After all they have bought Carisbrook for $7m – way beyond its real value – and they are prepared to pump what is needed into the stadium to make it a ‘success’. Remember we have the egos down here ‘to make it happen’. Our city council appeared to be joined at the hip with the rugby union as we know.
Well for the Stadium to be a success it’s going to need events of a similar nature to the 7s that achieve an iconic status on a national level. It’s needed to supplement any rugby test allocations and perhaps one or two concerts per annum, basically events that will fill the venue to 30,000 capacity. Obviously someone will need to bankroll those events and that’s probably DVML. It’s part and parcel of having the Stadium.
Whether a Council owned entity should be in the business of entertainment management is questionable. How you view it depends on one’s personal political philosophy, aversion to risk, financial situation etc. That said other cities effectively underwrite events at their venues. The question will be whether Dunedin can compete successfully with the big kids.
‘That said other cities effectively underwrite their venues.’ Maybe occasionally, but often not. Look at the David Beckham financial fiasco in Auckland where the Auckland Regional Council underwrote the event. Or the Joe Cocker concert here at Carisbrook some time back where it lost a few hundred thousand? No one in their wildest imagination would point to anyone down here who has the reputation, past or present, to ‘make it happen’.
Enter Mr Davies …
I think that underwritings and subsidies are inevitable. And relatively commonplace. In New Zealand stadia at least. Stadium companies don’t have sufficient funds being demanded by major international artists to purchase their services.
We’ve already established that the gate taking percentage that the stadium will receive from rugby every year will cover little more than 10% of the annual operating cost for the stadium and for DVML.
That revenue will come from 13 “event days”. If they could hold an event of similar income every day, they’d pull in around $8 million per year. Which is brilliant, but clearly not practical.
What is significant about those 13 days and their combined total $300,000 revenue, is that they span a continuous period of 38 weeks. The project consultants have recommended that the venue not be used for any other purpose than rugby during that period, in order to ensure the quality of the playing surface.
So that leaves 14 weeks, or 3 months, to generate the remainder of the significant revenue required. That’s not going to come from local events, it’s going to need the drawcard of 2 or more national events. Such as major international concerts. And that’s going to require underwriting and event purchase subsidies from someone.
Basically what you are saying, Phil, is that stadiums – ours in particular – need constant life support. We are essentially, for a community of 53,000 ratepayers, subsidising the incomes of rugby players, opera divas and rock stars. Given the chequered history of stadiums worldwide we cannot expect that our now scaled down stadium, at the bottom of NZ and with a low population base, is going to be viable. Dunedin is not Mecca. The ra ra stadium hyperbole that has come from the mouths of people like Malcolm Farry to promote and push for the stadium has led us down the garden path to the fairies at the bottom of the garden.
As you say, ‘And that’s going to require underwriting and event purchase subsidies from someone’. Answer? The rate payers. I can’t see the old boy network putting their hands in their pockets because they know is there is no profit to make. If there was, they’d be wanting to run the show and we’d be hearing cries of ‘Leave it to private enterprise. We are more efficient and can do it better.’
Peter says: (to effect) that the price of $7 million paid by the DCC for Carisbrook is “way beyond its real value”.
Far from it. If it is not retained as a community sportsground (which, regular contributors to this site well know I favour for a host of reasons), the commercial breakup value of the properties involved would likely yield in excess of $7 million. It was bought by City Property on that basis.
In any case – and without again reopening the subject which was comprehensively debated on ODT Online in December – the price paid by the DCC to the ORFU was supported by a registered valuation (conservatively) representing the market value at that time. It may well, of course, have increased since.
Richard, I would love to see that site developed as a true community recreation asset. The possibilities are limitless. A secure, lit, community exercise and recreation park, similar to that put in place in Auckland by John Walker, would really bring a sense of pride into the region. More power to you.
Richard
$7m was a gift from the DCC to the ORFU to pay off their bank loan and DCC loan and have a bit of spending money left over. No one but the DCC and their mates on the ORFU believe Carisbrook was worth $7m. Let’s put the $7m valuation myth to bed once and for all. No one is fooled.
Interestingly you seem to be implying that the rugby union thought it was worth more but gave the DCC a ‘bargain’.
Phil
Isn’t Carisbrook already a true community asset? Doesn’t it already ‘bring a sense of pride into the region’? You imply that it isn’t now, but could be later. Try telling that to the people who have loved going there for many years. I think you’ll also find it is already well ‘secure’ and ‘lit’. I gather you have been to a night game.
Phil – thanks for bringing up the remarkable project that John Walker initiated at Manukau City: http://www.fieldofdreams.org.nz
The John Walker ‘Find Your Field of Dreams’ Foundation aims to: “positively impact the lives of young people in Manukau by providing them with opportunities to live healthy, active lifestyles and pursue a positive pathway through sport and physical recreation”. The Foundation believes “this will encourage them to become prosperous citizens, connected with and committed to their community”.
Watch the inspiring launch video, which presents the underlying vision for the John Walker ‘Find your Field of Dreams’ Foundation.
The Foundation is a charitable trust chaired by John Walker.
“We are a catalytic entity, rather than a grant making body. We add value to existing programmes and facilitate the development of new ones. Programmes will be delivered through a city-wide partnership between the council, NGOs, government agencies and business, and will roll out across the community to the widest range of participants.”
30.4.09 Manukau’s champ has a vision for the city’s kids (Manukau Courier via stuff.co.nz)
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At the moment Carisbrook mainly caters to one sports code; a proud tradition with a ‘world-class’ identity. Nevertheless, I welcome opportunities that expand community sport and recreational use of Carisbrook, under DCC and community stewardship. It would pay to read more about the Manukau City precedent – and be thinking of ways to derive or customise such a model for our Dunedin situation, long term.
I think most people will want Carisbrook sold off once there is a new stadium and for the even bigger profits that Richard Walls imagines from the sale of Carisbrook land to be ploughed back into the city coffers to help defray the costs of Awatea St.
Peter, you’re referring to Carisbrook as the football stadium that we all know and love. And perhaps a community asset as such.
It’s now time to face the rapidly facing reality. In a little more than 12 months, Carisbrook will no longer be a football stadium. Like it or not. It will be a former football stadium. There’s no stopping the process now. And, as such, it will have no value as a community asset. Even as a stadium, it’s not a true community asset. Like the new stadium, it’s a spectator venue, not a participation venue. But that could all change.
John Walker (the athlete, not the lawyer) championed a construction of a community exercise and recreation park in South Auckland a few years back. Walking and jogging trails, picnic spots, dog excercise area. All self contained within one easily accessible location with 24 hour lighting and security systems. We have those facilities now, but not within easy walking access of bulk of our population. Creating an open “oasis” of that scale right in the heart of a major residential area would bring so many benefits to the local community, property values, schools, desirability. The list goes on. I’m with Richard on this one.
Peter
Well, you are entitled to your opinion on the value of land but the $7m is no myth. Councillors on the other hand, must act on expert advice, not opinion. In this case, a professional and conservative valuation.
I also respectfully point out that I have never said anything about making big ‘profits’ from any sale of the Carisbrook Ground, its associated properties, or indeed other council properties in the South Dunedin area that would necessarily be involved in any rationalisation as part of a comprehensive redevelopment project.
That expectation was expressed, however, in the original CST budget and, as I consistently pointed out, its ‘Achilles heel’. Inevitably it had to be written back into the overall cost of the FB project as part (the major part) of taking the cost out to $198m.
But you are correct on your other point, when the future use of the Carisbrook Ground and associated properties is decided, the $7m (or whatever) will be credited against the FB project budget.
Finally, the ORFU did want “more” than the $7m. It did not get it despite several months of bargaining. And there was “no spending money” left over for them.
I’ll leave it at that. I do not see much to be gained in rehashing and rehashing.
Sláinte!