‘Stadium liability’, from the ODT unprintable letters file

Received from Lee Vandervis
Sun, 14 Dec 2014 at 10:42 a.m.

Message: I have been advised by Nick Smith that the ODT Editor will not print my letter as below.
You may well have ideas on what the reasons for rejection may be.

ODT 10.12.14 Letter to the editor (page 14)
ODT 10.12.14 Letter to editor Diehl p14

—— Forwarded Message
From: Lee Vandervis
Date: Thu, 11 Dec 2014 15:43:28 +1300
To: EditorODT, Nicholas G S Smith [ODT], Dave Cannan [ODT]
Conversation: Stadium liability
Subject: Stadium liability

Dear Editor,
Despite all the evidence, contributors like Bev Diehl still have everything wrong regarding the Stadium.
We do not “have it” – it has us till it is paid for. In the meantime the lenders have it and us by the debt short and curlies.
It is not “an asset” but a rates liability. We are not having major artists, they occasionally have us, as in the estimated $6 million Elton took back overseas for his one-off no-charge use of the Stadium. The mostly empty stadium has other events, mostly rugby, which are heavily subsidised by rates bail-outs and differential, Community Access fund, Event Attraction fund, and millions in interest, staff and maintenance payments. The DCC Stadium Review Committee was stacked with Stadium Management who recently succeeded in again increasing funding for their already wasteful operational spending.
Everything can never “fall into place”, until Stadium operational costs are reduced to the bare minimum required for the rare large events that only the Stadium can host, now that Carisbrook has been levelled.

Cr. Lee Vandervis

—— End of Forwarded Message

Perhaps an inkling here, Lee ?

Ch39 News (11.12.14) talks to Phil Somerville about the ODT Opinion page.
We’re told it’s about bringing forth ideas. Different views from different perspectives – but STOP.

What are some of the main recurring topics?

“Often they tend to be on the main news of the day. For a while of course they were on the stadium, try to avoid that now, most views are extremely entrenched. Probably could run something on climate change every week….”
Link to comment

Posted by Elizabeth Kerr


Filed under Business, DCC, Democracy, DVL, DVML, Economics, Events, Highlanders, Hot air, Media, Name, New Zealand, NZRU, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

10 responses to “‘Stadium liability’, from the ODT unprintable letters file

  1. Bev Butler

    Lee, the ODT have a STADIUM EDITORIAL SUPPORT strategy in place, instigated by the Carisbrook Stadium Trust, developed with Nick Smith and paid for by Dunedin ratepayers.
    Regardless of the ODT’s STADIUM EDITORIAL SUPPORT strategy people should still continue to write letters if they wish.
    In time the ODT will be better known for the letters they didn’t publish rather than the letters they did publish.

  2. Calvin Oaten

    Lee, as the saying goes: “There are none so blind as those that will not see.” And that really is the crux of the matter. The Mayor doesn’t want to see it as to do so would demonstrate his ineptitude. The CEO and her reviewers don’t want to see it because she would know that the recommendations from that review are just a perpetuation of the present bankrupt format. The Rugby hierarchy don’t want to see it because it would expose their ‘fraud’ for what it is, and doom their business without the enormous ratepayer susidising. DVML don’t want to see it because their cushy jobs would be at stake. The councillors generally don’t want to see it because it shows them up for how seriously incompetent and gutless they are. The media don’t want to see it because of the huge advertising revenue the stadium generates. When you have the city virtually blinded by the apathetic lack of understanding of the reality of the situation, nothing will change until financial chaos forces it.

  3. Peter

    I see the ODT has changed its mind and printed Lee’s letter. They had no real reason not to in the first place. It would have been a bad look, especially in light of the new knowledge gained about the Stadium Editorial Support Strategy.
    As much as they try to periodically shut down the stadium furore, they know it is too large an issue not to publish… in some (usually filtered) form. Besides, they look stupid when news leaks out and gets published outside the province and not in the ODT.
    The stadium is THE issue that sells papers. This blogsite, I understand, always gets bumper hits whenever the stadium issue rears its increasingly ugly head.
    Sorry guys, that’s the way it is. You can’t shut down fraud.

    • Elizabeth

      Thanks Peter, I will grab it.

      You say: “The stadium is THE issue that sells papers. This blogsite, I understand, always gets bumper hits whenever the stadium issue rears its increasingly ugly head.”

      Correct re What if? view numbers.

      Need I mention just 9 sleeps til Christmas and 7 working days left to publish the Deloitte report on the Citifleet investigation.

  4. Elizabeth

    Lee Vandervis’s letter published with due regard.

    ODT 16.12.14 (page 8)ODT 16.12.14 Letter to editor Vandervis p8 (1)

  5. Elizabeth

    Spurious multipliers AGAIN

    ### ODT Online Fri, 16 Jan 2015
    League: Test worth $2.9m to city – DVML
    By Chris Morris
    Securing Dunedin’s first rugby league test for 86 years was worth millions to the city’s economy, new figures suggest. When the Kiwis took on England at Forsyth Barr Stadium on November 8 last year the match drew a crowd of about 15,000. Economic impact data released by Dunedin Venues Management Ltd (DVML) yesterday showed the event was worth about $2.9 million to the city’s economy.
    Read more

    Earlier comments from other threads:

    Rob Hamlin
    Submitted on 2014/09/05 at 4:38 pm

    I stopped using multipliers some time ago on the basis of ethics. There is no robust, universally accepted way of calculating them and many of the inputs to them are usually estimates (guesses?) as well. The source of them is usually a company who uses a ‘proprietary’ technique – looks wise and says ‘4.3’ before charging you a tidy sum. I don’t know if the mutiplier figure gets bigger if you pay more. On the last occasion of being told that the method by which it was arrived at was a ‘secret’ I submitted the raw spend figures to the client.


    Rob Hamlin
    Submitted on 2013/01/26 at 5:12 am

    A predictable outcome. Economic impact analyses are a routine tool in the selling process when Government or government owned pseudo-businesses (eg DVML) are involved. However, they are completely ineffective as a tool for selling to real industry and commerce. The local business boys and girls have had a look and are keeping their hands in their pockets – Sensible fellows!

    There are a variety of reasons for this lack of ‘poke’ in private industry, but foremost is the lack of real rigour in most economic impact analysis. Benefits are included and headlined, but associated costs are routinely left out. Among these costs are:

    1) Opportunity costs – What would the outcome have been if the money (investment) requested/demanded had been spent elsewhere or not at all? At an investment of $250 million, the opportunity costs of the Foobar to this community are in the order of $20 million annually (minimum).

    2) Displacement – What activities and revenue will be displaced by the proposed event? This is a biggie. Sure people came to the RWC, but others heard about the boozing and gouging and decided not to. Retail and other business activities in London and elsewhere in the UK were well down in many areas over the Olympics. Ditto in Queenstown over the RWC. It is a common pattern.

    3) Leakage – These economic impacts are puffed up by what is known as a ‘multiplier’. What these multipliers assume is that if $5 bucks is spent on a coffee by a Foobar visitor, the cafe owner will spend $3 of that on a new bathroom, the plumber will spend $1.50 of that on a new wrench in Mitre 10. The owner of Mitre 10 will spend 50c of that on a new Porsche etc etc etc. In this case $10 of ‘economic impact’ is claimed for the $5 visitor spend on the basis of a multiplier of 2 – and that would be a conservative one.

    Where do these multilpiers come from? Well believe it or not, they come from an ‘economic impact multiplier shop’. These are companies that specialise in producing these numbers, and for a stiff fee they will look wise and burp a number for you. These figues are not publicly tabulated and there appears to be no accepted norm for any one community – or universally accepted way of calculating them out there in the public domain. The methods used are thus usually proprietary. One of these figures usually lurks in the depths of any report that is based on economic impact ‘analysis’.

    The last time I was professionally involved in preparing such an analysis, we requested some form of methodology/justification from the economic impact multiplier shop to include in our report. It was not forthcoming, so we refused to buy amd just presented an analysis of direct visitor spend for the event concerned. I suppose that this reticence may explain why I have never seen a justification for a specific multiplier factor in any economic impact report – Has anyone else?

    Multipliers tend to assume that the locale concerned is economically quite watertight. In reality, leakage from any one local economy can be severe – especially if local capaciities are put under stress, which is common for one-off ‘mega’ and even ‘not-so-mega’ sports/entertainment events.

    Even longer term projects ‘leak’. The Foobar is a case in point yet again. How much of fhe stadium’s capital spend by the community actually remained in Dunedin? Much direct spending went out of town – eg the roof. A good deal of the secondary indirect spending of the proceeds from what did get spent in town may well have been spent on new bathrooms in Wanaka rather than here for instance. Economic leakage with regard to this particular project is still an ongoing problem – as Mr Taylor pointed out in his recent open letter to the Directors of DVML.

    All these negatives also are subject to the muliplier effect as well – but in this case it is of course a negative one. Multipliers are enthusiatically applied to monies coming into a community as a result of the revenues related to a proposed project, but rarely to monies going out as a consequence of its costs. So, for example as the Foobar sucks the rates out of my bank account at the rate of c. $600 bucks a year, I will buy approximately 120 fewer cups of coffee in the town. This not only affects the cafes, but if the economic muiltiplier reasoning is to be kept consistent, it also has a negative economic ‘knock on’ effect for other businesses that is exactly analogous to the positive one decribed above – Ergo, the Porsche may well not get bought!

    For these three reasons and others, decision makers in private imdustry, who are immediately answerable to their spouses or shareholders for the outcomes of their fiscal decisions are rarely the purchasers of items that are backed up by economic impact analyses. If the costs as well as the benefits of many of these proposals are incorporated in an even-handed manner, the outcome is often a negative number, and it can be a very large one.

    It’s a pity that the same can’t usually be said for ‘Gimmint’ at any level.


    Comments from Russell Garbutt on multipliers, stadium marketing and Howard Research… from the time of David Davies as DVML chief executive:


  6. Calvin Oaten

    Once again Dunedin Venues Multiples Ltd have wrung the most optimistic projections possible. Economic benefits of $2.9 million, why not just round it at $3.0m? Visitors will spend an average of $427. How the hell do they know that? Worse, why do the powers that be, plus the ODT suck up to that long disproved nonsense.
    I can refer to the much touted economic benefits cited as justification for the hugely increased estimates for the Dunedin Town Hall Conference Centre (reference my opinion piece, ODT 24/7/08). Back in 2005, it was claimed the average spend of conference attendees would be $400 per day. Then in 2006 the results of a survey of the attendees of the NZ Federation of Women’s conference was revealed, without so much as a blush, that the average daily spend (including accommodation) was just $175. This of course blew into a cocked hat the projected economic benefits used to justify the expenditure. Didn’t slow up the development though, even when their own consultants Horwaths ? showed that the projections could at best be shown as extremely optimistic. In fact, the project, even if it met the target of 36 conferences per year come 2015 – up from 16 as in 2008 – then it would, after allowing for debt servicing show a net loss of ($4.2 million).

    The games people play when it is necessary to ‘con’ the public.

  7. Elizabeth

    ### dunedintv.co.nz January 16, 2015 – 6:33pm
    Nightly interview: Terry Davies
    An economic survey on the recent league test at Forsyth Barr Stadium shows the game generated about $3m for the local economy. Stadium boss Terry Davies is thrilled with the result, and he joins us to talk about the importance of hosting sports fixtures.

  8. Elizabeth

    “League test worth $2.9m to city”
    Great public comments at this ODT thread on DVML’s SPIN tactics – http://www.odt.co.nz/news/dunedin/330178/league-test-worth-about-29m-city-dvml

  9. It really annoys me that DCC has squandered all this ratepayer money on what they call ‘sport’ linked to the stadium when, for most people involved, professional rugby means sitting down doing very little but drinking. In contrast, you would think a swim at a municipal swimming pool would be an innocent pleasure which anyone could have access to, all the more important since many schools can no longer afford their own swimming pool. Yet look at the casual rates for the Moana Pool – $6.20 for a causal swim for an adult. I see young adults I take there pull a face and I know they won’t be back. It’s simply unaffordable. Yes, it is for a casual swim, if you have not got the right connections to some group or other. Once I met a woman swimming at the pool who told me she had got a ‘complimentary swim’ as part of the deal of booking at a hotel around the corner. I would just like to know who is paying what at Moana Pool and who doesn’t pay much or anything. Really! $6.20 for a single swim is prohibitive. There’s also a great deal of commercial letting of pool space going on – so that it makes me wonder sometimes just how PUBLIC this really pool is. Great facility as it is, I’ve long thought it was built for the university in much the same way as the stadium was built for professional rugby.

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