ORFU position

### ODT Online Fri, 23 Mar 2012
Opinion: Blog: The Analyst
ORFU bailout – the big sausage and mug wash-up
By Rob Hamlin
As the last sausage sizzles itself into silence, it is now possible to examine the merits, if any, of the ORFU rescue extravaganza. As soon as the ORFU started extending its own life just over two weeks ago, it was pretty easy to see that there was about as much chance of the ORFU actually falling off the back of the gravy train as there was of Kate Winslet falling off the back of the Titanic only thirty minutes into the film.

The ORFU’s fiscal position has not been significantly changed by this rescue. It is still insolvent. It still owes more than $680,000 to small creditors. Its ongoing annual deficit to this point is in excess of $600,000, and the only savings that have been identified (maybe) are less than $300,000 in players’ wages. A return to positive cash flow can thus not reasonably be even expected, let alone guaranteed without some major and as yet unannounced development.

Read more
{The ODT link is no longer available. We are seeking advice. -Eds 3.4.12}

Posted by Elizabeth Kerr


Filed under DCC, Economics, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

65 responses to “ORFU position

  1. Elizabeth

    In the same blog, Rob Hamlin is clear on this:
    “The Stadium is not and never will be a financially viable entity, even if it is not required to cover its capital costs. The substantial loss that will shortly be announced by DVML during the first six months of its operation will simply confirm that point.”

  2. Mike

    That’s so true – the professional side of the ORFU couldn’t pay the interest on their $2m BNZ debt, does anyone think they’ll be more profitable doing the equivalent of paying off a $40m mortgage (the money to pay off the the ‘private financing’ that’s being taken off the top)?

    • Elizabeth

      Blog: Look out for Rob Hamlin’s post on the ORFU’s small creditors, at The Analyst (ODT Online) – Monday 26 March.

  3. I would have thought the orfu position was “we’ve bent them over, they’ll take it just like their council did”. Long and hard……

  4. Hype O'Thermia

    I wrote this some time ago – Sat, 3 Mar 2012 it was up on line, a suggestion of how to see the small creditors right a.s.a.p. without altering ORFU’s. Another point that has occurred to me, as circumstances have changed, is that because the money is a loan from charities it would be deeply offensive were the paid creditors to “forgive” ORFU’s debt and I don’t think it would happen – unless they paid out to the charities themselves. It’s at http://www.odt.co.nz/opinion/your-say/199955/caterers-and-other-creditors.

    As a ratepayer I have been steaming mad about the amount of money the DCC has thrown at professional rugby, ignoring debt as we have recently found out, as well as building them another stadium and buying the old one – Carisbrook – for no purpose other than providing them with more money.
    The ORFU’s debt with the BNZ tells me the BNZ took its eye off the ball in a way banks never seem to do with us if we miss a mortgage payment because of insufficient funds.
    But the aspect of this ugly story that has touched the hearts of so many of us is the damage done to the individuals and small firms, unpaid but trusting in that old story “the cheque’s in the mail” – because how could such a venerable, respected nay idolised creditor not be as good as its word?
    Donations to the ORFU will go into the pool, or worse, be frittered away large-scale like the millions before them. So how can we support the local businesses to which relatively small amounts are owed?
    What if we “lent” them the money, to make up what they owe? What if repayment, when – if – the real debtor ever did the right thing and actually paid them, instead of paying us back or individual $5 or $1000 or whatever we as individuals can afford, they then gave it to a charity? We could put the name of a charity beside each creditor’s name.
    So while we would in the short term be helping local businesses to stay afloat, we would with any luck be supporting – delayed but still valuable to the charities because they are not going to stop needing money any time soon – the Hospice, Women’s Refuge, Foundation of the Blind, Dog Rescue Dunedin, the Orokonui Sanctuary. Just a few examples, there is no shortage of worthy causes where excellent work is done on a shoe-string.
    Would that be possible? Is there a trustworthy organisation that could handle the donations, keep records of them and pass the money over as soon as possible without waiting for the whole sum to be collected? Because those small businesses that are owed by ORFU are paying a high price to cover the debts, and they need cash flow or they will go under.
    The economy is in a bad way, businesses are struggling even when customers pay “on the nail”. More failed businesses, more unemployed people, are what Dunedin definitely does not need. It is worth while doing what we can do look for a solution. I have suggested one. Please, anyone who has ideas of how this one could work better, and any other suggestions, put your schemes forward now.

  5. amanda Kennedy

    The council and the ORFU have witnessed how Dunedin people let them deceive this city into building them an uneconomically sustainable stadium at the cost of millions; we have shown them that we are easy touches. Bullies do what bullies do when they see weakness. Some people cottoned onto the fact that the ORFU are a fat cat organisation a bit earlier before the stadium was built, some are figuring it out now. The ORFU will keep on taking and taking, that is quite clear. The council wont stop them, half of them are as much invested in the ORFU books not being investigated as the ORFU are. And when the city is in serious economic straights, the stakeholders will do just fine, they will reach down and buy bargain basement city assets (water) and houses sold cheaply due to people not being able to pay their massive rates. I’m starting to sound like George Carlin, except not so funny.

  6. amanda Kennedy

    We should be demanding the millonaire stadium stakeholders put their money where their mouths are and pay these debts off. SImple as that.

  7. Mike

    Well to be fair they are, and they’re using their donations as leverage to raise even more money – I don’t think that’s a bad thing. I think it’s important credit is given when it’s due here – these are small children we’re dealing with here, positive reinforcement is just as important as the negative (both a carrot and a stick).

    It seems that making ‘rugby’ look bad is a great incentive to making them pay their own way.

    Of course I’m hopping mad that this isn’t being extended to the money owed the city, their sense of entitlement means they’re still quite happy to stick it to the ratepayers if they can – and tell us we got a great deal in the process – bozos!

    And as I’ve pointed out before I don’t think that Otago rugby at the stadium of any stripe is likely to be financially viable for years (at least until the ‘private fundraising’ has finished) – if they were smart they’d buy Carisbrook back and use that, it would probably cost less long term – hopefully the city is not stupid enough to let that happen.

  8. amanda Kennedy

    Yes, Mike. Everything you say is fair. However the stakeholders are not stupid people; they have a strategy here. Give a token show of support (of thousands) with one hand while with the other hand they rifle through our back pockets for millions (I refer to the assets that I suspect they have their eyes on). This is smart on their parts.

  9. Russell Garbutt

    Mike, the fact that yet again there is another charitable trust being formed for whatever reason sends alarm bells off in my head. The ORFU seems to have surrounded itself by a plethora of trusts over the years with some designed to channel funds into the Union, others designed to channel funds out of the Union. Running amateur rugby is not a complicated business and doesn’t need trusts, companies and god only knows what.

    However running professional rugby does seem to require a high degree of obscurity and the fact remains that the people that have been closely identified with rugby in the past are working fulltime in the business of business. They know how to ensure that enough entities exist to confuse people in the DIA for example.

    It is the ideal pastime for a wet afternoon to try and piece together the complicated web of trusts, entities, companies that surround the ORFU and then notice the same names that pop up in all sorts of places. These names are those that don’t want to make comment, know nothing, or simply can’t be reached for comment.

    One other comment. Those that don’t want enquiries into their activities generally are those with something to hide. At the moment the ORFU and the NZRU desperately don’t want any form of enquiry into what has actually been going on behind the changing sheds. The same seems to apply to the DCC in respect of finding out what, who, why, when and how much in relation to the various decisions round the stadium. Why would this be? The only reason that I can come up with is that they have too much to hide. No other reason seems to have been offered.

    And if someone says that “everyone has moved on or forward” they will be on the next train to my little factory on the West Coast.

    • Elizabeth

      Dunedin folk, having observed the champagne tastes of the ORFU Board over the years, might well wonder what the additional debt of $80,000 caused to DCC stands for, on top of the lost $400,000 in rents. There’s an exact answer, along the lines of that beverage.

      Interestingly, Cr Vandervis might be on track to bring that debt to light, see his letter to ODT today.

      There’s certainly information available in the ether that will expose as a lie Wayne Graham’s assertion in reply “There was no single event that contributed to the debt”.

  10. amanda Kennedy

    I hope that Deaker makes it very clear that the same muppets who created the ORFU debt must not be allowed to return to the board. No more DCC ratefunded gravy train for them. This would include Graham himself too.

  11. amanda Kennedy

    But the main objective is to get the Professional Rugby bludgers out of the ratefund trough; not follow Cull and Hudson and hand over ratefunds with a smile and a scraping bow

  12. gaz

    Is it possible some local companies are still waiting to be paid for extra work to get the stadium up and running for the rugby world cup.
    That is to say there is a refusal by the main contractor to pay companies that worked on a per hour basis, this would explain why the stadium cost can not be made public

    • Elizabeth

      It does appear that a one-off party at the stadium contributed to the additional ORFU $80,000 debt to DCC; DVML was left with the unpaid bill. Aren’t some ‘anniversaries’ just like that. Who arranged the party? Who circulated the invitations? Who on the ORFU Board decided to proceed with the party if there was no cash to pay for it? Another instance of ORFU trading while insolvent. DCC was stupid enough not to call it in – why didn’t DCC go public with this information (rhetorical, easier to stick the ratepayers). Cull should resign. Or manage to see that an LGOIMA request for information surrounding this matter is not hindered by ‘commercial sensitivity’.
      Maybe it all comes out via the PWC forensic audit.

  13. amanda Kennedy

    What’s $80,000? Nothing but a mere p***s in the bucket when it is non-stakeholders paying, right?

  14. amanda Kennedy

    Do you think the ORT will investigate this obscene spend of ratefunds? lol.

  15. Anonymous

    So the event would have been in the July-December timeframe.
    It could have been a RWC-2011 related event. It could have been a Super Rugby opener.
    DVML doesn’t have to open its accounts; it should however, be forced to publish the list of all events.

  16. Phil

    Under the Construction Contracts Act (which is legally binding and can’t be contracted out of), the head contractor must agree to payment within 20 working days of receiving a claim for any work carried out during the time period. Any amount not disputed within that 20 days, must be paid in full. If an amount is disputed by the head contractor, the sub contractor has 5 working days to apply to an adjudicator for judgement. The adjudicator then waits a further 5 days to receive any other submissions before ruling on the dispute (they have 20 working days to make a ruling). Failure to comply with an adjudicator’s ruling results in a claim to the courts for costs against the head contractor, and the ability for the sub contractor to suspend work.

    It’s unlikely, given the time passed, that there will be any claims still in dispute for work completed prior to the start of the rugby world cup.

  17. Anonymous

    Is the $80K loss on one event part of the reason why DVML interim report has been held over until after the ORFU mess is settled?

  18. Anonymous

    ORFU Awards Dinner was 25th August 2011 at Carisbrook. DVML would have been managing Carisbrook at that point as they had been running the ITM Cup games in August onwards.

    • Elizabeth


    • Elizabeth

      ### ODT Online Tue, 27 Mar 2012
      ORFU, crematorium on bill
      By David Loughrey
      The Otago Rugby Football Union bail-out debate will again echo around the Dunedin City Council table, when a full meeting of the council today moves to confirm the minutes of an extraordinary meeting that discussed the issue two weeks ago.
      Read more

  19. amanda Kennedy

    The ORT kills me. Again with the ‘big mean nasty debt’ and how we have to tighten up our collective peasant belts, but no mention of who created that debt. Oh no. Never, never that. Crs Hudson, Bezett, Brown and mates? They feel pretty sure of themselves. Another three years of these fiscal dunderheads on council it would seem. The powers that be have decided already.

  20. GCK

    Attached are my comments in submission to the Draft Long Term Plan – I see little point in submitting in person but believe that the voice of the ratepayer should be heard – however ineffectually.

    ‘It is essential for a relationship of trust between the DCC counsellors and the ratepayers that [there is] a full independent forensic audit of the DCC and ALL related entities – CST, DCHL, DVL, DVML – in relation to its relationship with professional rugby, and the ORFU.

    I do not wish to appear to submit – I have no wish to be bullied and harassed by a group of counsellors who wish to avoid accountability for their previous actions.’

    • Elizabeth

      Ian Taylor – a small creditor, yeah well – had a letter to the editor published in today’s ODT (page 8), it made my skin crawl. He was right up the Rugby back passage. Guess he wants more work at the stadium and to be in on anything Edgar dreams up next for sporting endeavour through a private trust or three. Taylor probably hasn’t worked out yet that ORFU is trading while insolvent or has income from undisclosed sources, or that DCC is up to its nether regions and beyond in squillions of debt. Yep, why get angry Councillors. Rugby is doing you a favour. (woops, I nearly said doing you over)

      When you wake up Ian, we won’t rely on you to lead the call for a forensic audit of the ORFU and related entities. Your rugger lads at the ORFU Board are squeaky clean. And life is pure Media PC TV.

  21. amanda Kennedy

    i always remember him as the nice man from Playschool. But yes. Some serious ‘you scratch my back..’ etc, was going on in that article. Fooled nobody. But good to know who is behind and supporting the stadium debt.

  22. Russell Garbutt

    I see that Delta are now INCREASING their financial support of professional rugby in this town. For goodness sake, every dollar of money going into this bunch of arrogant deadbeats is money not being recouped for the ratepayers. Mayor Cull seems to be lying down and accepting their “commercial” decision. Just who is it in Delta that is so myopic and dedicated to pro rugby?

  23. Anonymous

    My guess is that the arrangement for Carisbrook will continue and that little money will actually change hands. Delta will continue to arrange a “test of lighting circuits” between 7:35pm and 9:30pm on the occasional Saturday in the first half of the year, as used to be done on the old lighting towers.

  24. Hype O'Thermia

    Who is so ruthless about fleecing the huge proportion of non-rugby Dunedin people to benefit the few?
    Python hugs and Liverpool kisses to the traitor.

  25. Calvin Oaten

    Not a problem for Mr Cameron spending OPM. Otherwise known as ours. As a rate payer/ shareholder, I wonder if he would give me a pass to the corporate box if I asked him? If not, who would be entitled? Delta staff only? I don’t think so. Dave Cull probably. Paul Orders, certainly, then there are the DCHL directors, executive staff and brown nosers, but no riff raff. All in the name of company public relations. It’s what is known as a trough. Suck it up folks, wait for the revolution.

    • Elizabeth

      The Delta news deserved a new post. Yawn, for we are rugby through and through. Mayor Cull will be had up for Heresy before the week is out, yawn.

      • Elizabeth

        More on the KFC support to ORFU… er, small creditors.
        While the fat-arse Board continues insolvent, you can pay the Board members’ debts for them #FO

        ### ODT Online Thu, 29 Mar 2012
        Burger brought back to help Otago rugby
        KFC’s Double Down is back – but only in Dunedin, with proceeds going to the Otago Rugby Union. The fast food chain has ordered 6000 of its Double Down burgers for a one-off reappearance at its three Dunedin stores, only this weekend. Five dollars from every burger sold will go to fund the union’s 180 small creditors left out of pocket.
        Read more

        • Elizabeth

          ### ODT Online Sat, 31 Mar 2012
          Rugby: Resolve to keep women’s team
          By Steve Hepburn
          Former Black Ferns prop Margaret McCarrigan says it is vital the Otago women’s team does not slide into oblivion. Otago has been cut from the national championship because of the Otago Rugby Football Union’s financial woes.
          Read more

        • Elizabeth

          With all the public (I nearly typed ‘private sector’) fundraising going on ORFU have become very quiet – how many small creditors have been paid? Any?

        • Elizabeth

          “the bulk of the local creditors”… (Tew) – who misses out???

          ### ODT Online Sat, 31 Mar 2012
          Rugby: Bosses working on inter-island match
          By Wynne Gray
          The inter-island match has not been played since professional rugby began, but plans remain to reinstate the match in June in Dunedin. The last clash was in 1995 at Carisbrook but this year’s duel will be played across town at the new stadium as part of plans to help bail out the Otago Rugby Union. NZRU chief executive Steve Tew said the match could be disruptive for the Super 15 franchises but they were working hard on nailing the detail.

          Meanwhile, Tew said the NZRU was satisfied with the rescue package progress for the Otago union, that the bulk of the local creditors would be repaid and that a new board would be in place in several months.

          Read more

        • Elizabeth

          ORFU related?

          “Sir Graham [Henry] was in Dunedin yesterday to speak at the Dunedin Club as part of a club lunch and fundraising auction, following a request from fellow knight Sir Eion Edgar.”

        • Elizabeth

          ### ch9.co.nz April 2, 2012 – 6:40pm
          Future of Otago women’s rugby in jeopardy
          The future of women’s rugby in Otago is in jeopardy as the New Zealand Rugby Union has decided to give Otago’s place in the competition to Waikato. However a player who has moved to Otago from Christchurch this year hopes to raise enough funds to get a team in the women’s National Provincial Championship, which is due to begin.

        • Elizabeth

          ### ch9.co.nz April 3, 2012 – 6:48pm
          Still space for team in National Provincial Championship
          The New Zealand Rugby Union says there is still a space for a rugby team in the women’s National Provincial Championship this year. General Manager of Professional Rugby, Neil Sorensen, says the Otago Rugby Football Union chose not to fund a women’s team, however the NZRU would accommodate a team if it could be funded locally.

        • Elizabeth

          We all know the Otago Rugby Football Union is up to its neck in debt and has had to prioritise what it will fund and what it will not.

          ### ODT Online Wed, 11 Apr 2012
          Rugby: Otago Spirit worth fighting for
          By Farah Palmer
          We were the first nation state to give women the right to vote and, over the years, we’ve provided women with opportunities to excel in a range of careers, leadership roles and disciplines. Of course, our pride is often greatest in the discipline of sport. […] As if to prove gender equity is occurring in this organisation, opportunities for male rugby players have also been minimised by condensing two teams (Otago B and Colts teams) into one (Development team). Younger male players, nonetheless, are still offered a lifeline, with representative age-grade teams surviving the cull. In a nutshell, although reduced, the opportunity to excel in rugby still exists for males but is literally non-existent for females.
          Read more

        • Elizabeth


          “The union is supporting this initiative and we’re keen to work with the Otago women. We can’t front with the dollars, but we can support them as much as we can.” -Jeremy Curragh, ORFU change manager

          Mr Curragh said about $20,000 would need to be raised by the end of this month […] Otago women’s rugby stalwart Margaret McCarrigan […] has been looking at establishing a bank account to accept donations. The account would need to be operated outside the auspices of the ORFU, Mr Curragh said.

          [ORFU still insolvent? Oh dear.]

  26. Anonymous

    If it is true and Allied Press is owed $50k in advertising from ORFU then do you think it will position itself first or last in line as a “small creditor”? My guess first unless they can get a bit of free publicity out of it. I often wonder where Julian is at these moments. Is he aware an account manager in his firm chose to overlook a bill growing so large because he or she likes rugby? Private business would usually frown on such behaviour. Sometimes I think he is kept in the dark on certain matters. Pity, really, because Julian could do so much more if he just understood how the community felt about professional rugby and its repugnant hoard of stadium councillors.

  27. Russell Garbutt

    This June fixture of the North South match which will be raising money for the DCC is interesting when you look at the schedule for the All Blacks via their website. Look at what the great God Tew has to say.

    “The inter-island match has not been played since professional rugby began, but plans remain to reinstate the match in June in Dunedin. The last clash was in 1995 at Carisbrook but this year’s duel will be played across town at the new stadium as part of plans to help bail out the Otago Rugby Union. NZRU chief executive Steve Tew said the match could be disruptive for the Super 15 franchises but they were working hard on nailing the detail.”

    9 June v Ireland at Eden Park, Auckland
    16 June v Ireland at Rugby League Park, Christchurch
    23 June v Ireland at Waikato Stadium, Hamilton

    Seems to me that when we are talking about a North/South match then we are looking at a match between the has-beens and the wannebees. None of the All Blacks and the signs are none of the Super whatevers. So one bunch of no-hopers who might have been born in the North Island vs another bunch of no-hopers maybe born in the South. Yeah right….

    A non-event at the best. Better off to hold a quality show at the Art Gallery over a month. More chance of a better return.

  28. amanda Kennedy

    Beyond. Pathetic. Has the ORT no pride? lol.

    • Elizabeth

      Rugby Times, The Sun. Corporate boxes.

      Sadly, ORFU bailout – the big sausage and mug wash-up (23.3.12), the blog post by Rob Hamlin referred to by link at the head of this thread is no longer available at ODT Online.

      The Analyst blog is no longer available at ODT Online.

  29. Phil

    Russell, the reality of the “status” of the North v South match has already been pretty broadly hinted at in the media. Naturally enough, The Sun has tried to gloss over it. But it’s obvious in other daily rags. It has already been reported that those in the All Blacks squad will not be available, and those in Super Rugby playing squads are also not being forced to attend. The only specific player attendance requirement made by the NZRU is that those players in the Crusaders franchise (for some reason) who are neither required by the Crusaders nor by the All Blacks, are to make themselves available for the North v South match.

    It’s not a match which will feature the best and the brightest, rather those who are not wanted elsewhere. It’s not going to live up to the hype of similar matches held back in the 70s as trial games, nor the Australian rugby league State of Origin games. But the promotion is selling it as such, and that will be enough to talk enough people into buying tickets for the organisers to call it a success.

  30. Hype O'Thermia

    But somebody’s got the whole article and can put it up here, right?

    {We’re in discussion. The cache won’t last. -Eds}

  31. Anonymous

    Interesting to see the ODT throw its toys out of the cot. All this public discussion about its bludgy rugby must be getting to someone. Fortunately they tend to be a little behind on the interweb thingy and whoever is being grumpypants forgot about Google cache:


  32. Hype O'Thermia

    Good. Got it.

    • Elizabeth

      D Scene 4.4.12 just in (page 3)
      KFC says it raised $30,000 for “Otago Rugby” from sales of Double Down burger.

      ### ch9.co.nz April 3, 2012 – 7:07pm
      Restaurant Brands reports fall in annual profit
      KFC may have been successfully selling Double Down burgers in Dunedin at the weekend, but its parent company didn’t have good news today. KFC donated $30,000 to the creditors of the Otago Rugby Football Union this week. It had gifted half the cost of a temporary supply of its double down burgers.
      Read more

  33. Hype O'Thermia

    “…Friday night’s elimination final between the Phoenix and Sydney FC attracted only 10,000 spectators. At a similar game two seasons ago 24,000 fans showed up.
    Then on Saturday just under 12,000 arrived at the stadium to watch the Hurricanes stumble against the Cheetahs, a far cry from just five years ago, when the prospect of average crowds dropping below 20,000 was considered alarming.
    Wellington city council sports portfolio leader John Morrison fears there has been a “sea change” among spectators since the economic downturn and the introduction of bigger and better televisions….”

    Exactly – why put up with parking hassles and the extortionate prices for refreshments, restricted brands only, now that big TVs have been invented? Someone should have told our stadium decision-makers that televisions even show colour these days.

  34. Peter

    They wouldn’t want to countenance the possibility that they are not only staying home, instead of going to the games, but are possibly turning to some other TV programme- like a bit of reality TV – where people can view the trailer trash lives of the rest of humanity. Far more interesting, in a lurid kind of way, than watching rugby!

  35. Anonymous

    NZRU was defending the axing of women’s rugby back in 2010 because of “tight financial times”. So, to translate, there’s hundreds of millions in public money (and VIP status at ACC for the rugby celebrities) wasted on professional rugby but the women have to dig into their own pockets to play it – http://www.odt.co.nz/sport/rugby/90613/rugby-nzru-defends-women039s-competition-axing.

    But once again we are shown that a group can make an effort to fundraise for their sport. This is something the professional rugby bludgers and that repugnant organisation ORFU choose to ignore when the money is handed to them by the Stadium Councillors and now New Stadium Mayor Dave ‘let’s make it work at any cost’ Cull.

  36. Peter

    Why didn’t these women rugby players make a fuss at the time they were being screwed in 2010? A good lesson. Don’t keep the peace, hoping the NZRFU will eventually do the right thing.

  37. Anonymous

    Seems they have a bit more now.

    NZRU reports $9.6 million profit for 2011…

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