DVML and the “Otago Rugby” deal (sponsorship and payments)

Is Terry Davies, chief executive of Dunedin Venues Management Ltd, telling porkies about the “Otago Rugby” deal signed in 2012 ???
(DVML/ORFU/NZRU)

Compare Mr Davies’ reply to Bev Butler today with information Whatifdunedin received from a source in mid-July 2014.

The reply to Question 1.(d) is interesting. Mr Davies states that none of the $3 million sponsorship was paid to ORFU but DVML does provide a staff member to assist ORFU with its sponsorship proposals. This is probably Paul Thompson. The other information from a source claims that DVML has to make up the difference to $1 million per year; this is paid to ORFU if less than $1 million in sponsorship is obtained. So the other staff member only spends one hour per week for six months each year?

Question 3. He says there’s no DVML company record of staff movements and NZ/overseas travel in approaching sponsors. Really? If true, that’s a large management failing which the DVML board is ultimately responsible for.

Why the discrepancies, Terry Davies ????

INFORMATION FROM SOURCE

Received mid-July [paraphrased]
Re the “Otago Rugby” contract – DVML did the Sponsorship but had to guarantee a certain amount. There was a heated exchange over this between Darren Burden (DVML chief executive) and one of his managers who said ‘we work for the ratepayers not rugby’. Burden was going to pay Otago the difference between what was raised and what DVML had to raise in the contract, despite Otago making a profit. The manager said DVML shouldn’t pay Otago, because they were deciding what was sponsorship and what was not.

[One day later]
The Otago Rugby deal is something like this:
DVML assist Otago Rugby with their sponsorship and the target is $1 million per year. DVML’s Paul Thompson was supposed to assist Otago Rugby. In the first two years, sponsorship didn’t reach the $1 million mark.
DVML still pays Otago Rugby to play at the stadium. Ask how much DVML have paid to Otago Rugby in the last two years to keep them afloat despite them making a profit.

[Two days later]
Not sure how it’s recorded in the DVML accounts, it was around $150k in the first year and similar in the second year. This is the difference between the $1 million DVML had to ensure ORFU got for sponsorship and what ORFU got. The deal lasts for three years. So this would be the last.

From: Bev Butler
To: Neville Frost [DVML]
CC: Kim Barnes [DVML]
Subject: LGOIMA Request: DVML Sponsorships
Date: Tue, 1 Apr 2014 08:57:35 +1300

Tuesday 1st April 2014

Dear Neville

It was reported in the ODT (22/03/14) that Mr Guy Hedderwick played an “integral” part in securing over $3 million in sponsorship for the stadium during the period ie Jan 2010 to Dec 2013.

I request:

1.
(a) How much of this $3 million figure has already been paid to DVML?
(b) Does DVML receive the full $3 million or does some other organisation receive some of this $3 million?
(c) How much of this $3 million is earmarked for the ORFU with payments already received or payments yet to be received?
(d) What percentage of the sponsorships secured by Mr Guy Hedderwick and/or other DVML staff does the ORFU receive?
(e) Is the ORFU making any financial contribution to Mr Hedderwick’s salary or expenses? If so, what percentage?

2.
(a) Did Mr Hedderwick’s salary package include commission on any sponsorship agreements he secured in his role as commercial director of DVML?
(b) What percentage commission did Mr Hedderwick receive for the $3 million sponsorship agreements secured as reported in the ODT (22/03/14)?
(c) Did the commission payments received by Mr Hedderwick exceed the salary range as stated in the DVML annual reports? If so, on what date was the DVML board informed of this?

3.
Thank you for your recent email containing the list of Mr Hedderwick’s DVML business trips. In this list the main reason for the majority of these trips was “meet with potential sponsors”. I request the names of the sponsors which Mr Hedderwick was successful at securing coupled with the name of the city where he met these potential sponsors. For your convenience, I have supplied a summary of these cities and the number of times he visited each city. Note I have included only the cities where it is stated the reason for the trip being “meet with potential sponsors”.

City (Number of trips)………Names of Sponsors
Christchurch (11 times)
Singapore (once)
Sydney (once)
Auckland (20 times)
Wellington (4 times)
New Plymouth (once)
Rotorua (once)

Please respond electronically. Thank you.

Yours sincerely

Bev Butler

————————————

From: Bev Butler
To: Terry Davies [DVML]
Subject: LGOIMA Request: DVML Sponsorships
Date: Tue, 17 Jun 2014 07:06:59 +1200

Dear Mr Davies

I understand the LGOIMA request I sent below was delayed due to the investigation by Crowe Horwath. Now that the Crowe Horwath report has been released and the report does not answer these questions would you please respond to my LGOIMA request.

Thank you.

Yours sincerely

Bev Butler

————————————

From: Bev Butler
Sent: Monday, 28 July 2014 2:51 p.m.
To: Terry Davies
Subject: FW: LGOIMA Request: DVML Sponsorships
Importance: High

Monday 28th July 2014

Dear Terry

The LGOIMA request below is still outstanding and has now breached the 20 day requirement under the provisions of LGOIMA.

I would appreciate a response to this request.

Thank you.

Yours sincerely

Bev Butler

————————————

From: Terry Davies [DVML]
To: Bev Butler
Subject: FW: LGOIMA Request: DVML Sponsorships
Date: Fri, 1 Aug 2014 02:56:12 +0000

Dear Bev

Further to your email dated 28 July and original request of 1 April, please find attached the response. A copy of the letter has been posted to you today.

Yours faithfully
Terry Davies

CEO [DVML]

B Butler 310714 (PDF, 82.8 KB)
Terry Davies letter 1.8.14 (2)

Crowe Horwath report cover (May 2014)

Crowe Horwath Report – Review of DVML Expenses (PDF, 363 KB)

Posted by Elizabeth Kerr

3 Comments

Filed under Business, Democracy, DVML, Economics, Highlanders, Name, New Zealand, NZRU, ORFU, People, Politics, Project management, Sport, Stadiums

3 responses to “DVML and the “Otago Rugby” deal (sponsorship and payments)

  1. Elizabeth

    Remember this?

    While Mr Davies would not release the detailed figures in the agreement, he said the percentage the stadium got from the box office was lower than it had been, but that was offset by the incentive arrangement.

    ### ODT Online Fri, 16 Mar 2012
    Highlanders’ stadium deal found to be void last year
    By David Loughrey
    A deal that was understood to have been struck with the Highlanders to use Forsyth Barr Stadium was found to be void last year, just months before the Otago Rugby Football Union went into financial meltdown. The result is two new venue hire agreements – one for each union – but those agreements seem set to give less money to Dunedin Venues Management Ltd (DVML), the company running the stadium. Dunedin Mayor Dave Cull said yesterday the reason was the parlous financial state of both rugby organisations. […] Yesterday, Mr Davies said DVML had been “negotiating hard” for the past six months or so in regard to the Highlanders. […] That new deal ended up being one the Highlanders franchise was “more comfortable” with, but one Mr Davies said was worse for DVML. […] Mr Davies said the deal with the ORFU was different, and he expected some people would be “enraged” by it. There was a percentage for DVML, but with an “incentivised” structure.
    Read more

  2. Hype O'Thermia

    Just to clarify, because I’m an ordinary relatively sane earthling, “the percentage the stadium got from the box office was lower than it had been, but that was offset by the incentive arrangement.” Does this mean money doesn’t come into the stadium money-jar from people who use it, but that’s OK because rates money is put in there so the jar won’t be conspicuously empty?

  3. That revision back to 16 March 2012 reminds one of just what a ‘pig’s ear’ Dave Cull made of the whole mess at the time. There we had the stadium. The ORFU/ Highlanders were bankrupt, the NZRFU were needing the franchise to perform in the south, lest ‘Sky’ reduce their payments. The owner of the stadium held the cards at that point. Call their bluff, bet the house against NZ Rugby folding and meeting the fair cost of using the stadium, against them walking away. It would have put the matter beyond doubt right there and then. Cull and DVML didn’t have the balls, blinked, Rugby called the bluff and we all know how it has ended. $40-odd million further down the gurgler on top of the build cost, and we are back at the table again pleading for rugby to keep using the stadium on their terms. Bloody pathetic! And all the ‘prat’ can do is shrug and say: “We have the stadium, shoulders to the wheel and let’s make it work.” Divert the attention away and get spending on cycleways, and bugger off to Edinburgh and Otaru for a break. God how we were conned by this ‘Greater Dunedin’ flannel. A bigger travesty ever to be enacted on the ratepayers one could not envisage in a lifetime.

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