Lively dialogue with DVML’s Terry Davies —Not ! #LGOIMA #Stadium

Received from Calvin Oaten
Sat, 28 Nov 2015 at 5:35 p.m.

—–Original Message—–
From: Calvin Oaten
Sent: Sunday, 1 November 2015 10:10 a.m.
To: Sandy Graham
Cc: Dave Cull; Sue Bidrose
Subject: [LGOIMA] Request

Hello Sandy,
I have been reading the annual reports of Dunedin Venues Management Ltd (DVML) and am somewhat uncertain as to the true position regarding the matter of charges/fees for the use of the Stadium. We were given a detailed report in the 2014/15 Annual Plan wherein it [was] disclosed that the DCC/ratepayers would be making a one off lump sum of $2.271m to DVML by way of calling up unpaid capital. Then there is to be $715k per annum paid also by way of calling up unpaid capital. An event attraction fund of $400k per annum, source ratepayers? These two annual sums are I believe revenue to DVML. We won’t talk about the later decision to fund $2m per annum as a rent subsidy to DVL, due to DVML’s inability to meet the $4m rent required towards DVL’s debt reduction.
There is no mention of the Stadium in the 2015/16 Annual Plan with any reference to funding shortfalls even though both DVML and DVL continue to run deficits.

Zeroing in on sports events held in the Stadium (because that is its primary purpose) I see that in 2013 there was (sic) 44 events attracting 205,511 attendees.
In 2014 there were 39 with 206,123 there and in 2015 for 33 events 174,575 turned out in support.

DVML showed revenue of $6.085m in 2012 and $8.205m in 2013. These were of the Stadium only, thereafter it includes the Edgar Centre, the DCC Convention Centre plus the Ice Stadium management. This brought about an increase in revenue to $9.127m for 2014 and $9.960m in 2015. Similar pattern for the operating expenses over those same years.

In order to enable one to get an assessment of where these obviously inadequate revenues come from I would request under the [LGOIMA] the following points;

1. The main events being rugby, which of the ORFU, the Highlander Franchise or the NZRFU staged what events over those years? What was the rental received by DVML from those respective bodies per event and do they figure in the revenue statements?

2. What was the amount of revenue received from the other lesser codes which used the same facilities?

With respect to the Operating Expenses outlined in the reports, 2012 as $3.862m, 2013 $3.589m, 2014 $4.361m and 2015 $5.407m.

1. Of those expenses I would request under the [LGOIMA] the amounts of those expenses which could be described as paid inducements or subsidies to perform in the Stadium, albeit sports and concerts?

I trust that this information could be made available within the statutory twenty-one days and thank you in anticipation.

Calvin Oaten

Terry Davies (1) 194022Terry Davies, DVML Chief Executive [via whatifdunedin]

From: Terry Davies
Subject: FW: [LGOIMA] Request
Date: 27 November 2015 3:53:09 pm NZDT
To: Calvin Oaten

Dear Mr Oaten

I refer to your email dated 1 November which has been referred to DVML to respond. I have responded directly to your questions below:

1. The main events being rugby, which of the ORFU, the Highlander Franchise or the [NZRU] staged what events over those years? What was the rental received by DVML from those respective bodies per event and do they figure in the revenue statements?
The rental received for these events is withheld under section 7(2)(h) and (i) of the Local Government Official Information and Meetings Act 1987 to allow DVML to carry out commercial activities without prejudice or disadvantage.

2. What was the amount of revenue received from the other lesser codes which used the same facilities?
The revenue received for these events is withheld under section 7(2)(h) and (i) of the Local Government Official Information and Meetings Act 1987 to allow DVML to carry out commercial activities without prejudice or disadvantage.

With respect to the Operating Expenses outlined in the reports, 2012 as $3.862m, 2013 $3.589m, 2014 $4.361m and 2015 $5.407m.

1. Of those expenses I would request under the [LGOIMA] the amounts of those expenses which could be described as paid inducements or subsidies to perform in the Stadium, albeit sports and concerts?
The expenses incurred and event attraction funding for these events is withheld under section 7(2)(h) and (i) of the Local Government Official Information and Meetings Act 1987 to allow DVML to carry out commercial activities without prejudice or disadvantage.

DVML’s audited annual accounts are published which shows revenue and operating costs and this is available on line at

You are entitled to have this decision reviewed by the Ombudsman.

Yours sincerely
Terry Davies


From: Calvin Oaten
Subject: Fwd: [LGOIMA] Request
Date: 28 November 2015 12:08:46 am NZDT
To: Sue Bidrose

Hello Sue,
You will have been aware of my queries expressed recently via the [LGOIMA], re the DVML revenue [breakdown].
Well I would have to say that the reply as received is totally underwhelming. This would have to be the most condescending, snivelling, performance by a highly positioned manager one could expect. Hiding behind a clause in a flawed piece of legislation to deny a citizen stakeholder information which ought to be available, on the grounds that it would compromise the company in carrying out its business without prejudice or disadvantage is nothing but
a complete ‘cop-out’ by a less than forthright person. Unless there is detail showing activities detrimental to achieving maximum returns to the company, then I find it a disingenuous and rude dismissal of an honest request.

Sue, I am dissatisfied with his response but if you think it is the way it should lie, then I would be deeply disappointed. I would appreciate your comments as I treat this as a serious affront.



█ In other developments, ICC felt the need to secure games for its stadium. What have Terry Davies, (“make it work”) Dave Cull and Sue Bidrose been up to in behind ?

### ODT Online Fri, 27 Nov 2015
Rugby: Highlanders private investors revealed (+ video)
A group of South Island private investors has been granted a five-year licence to run the Highlanders. The group, headed by Ticket Direct boss Matthew Davey, has taken a 77% stake in the Dunedin-based Super Rugby franchise, with Otago, Southland and North Otago Provincial Unions having a 13% stake. New Zealand Rugby (NZR) retains a 10% share for the first two years.
Read more

Otago Daily Times Published on Nov 26, 2015
Highlanders private investors revealed

29.11.15 ODT: Rugby: New operators for Highlanders
The Invercargill City Council has underwritten the venture to the tune of up to $500,000 in return for one guaranteed game at Rugby Park each year for the next five years.

29.11.15 ODT: Canadian finds his ticket to success
Matthew Davey says the Highlanders helped make him – now he is ready to help return the favour. The Dunedin businessman says he started the company he founded, Ticket Direct, at Carisbrook in 1999, and it has since grown into a multinational entity based in Dunedin.

Related Posts and Comments:
6.10.15 DCC v Tauranga CC + costly stadium cycle/walkway :[
18.9.15 Tsunami stadium #DUD
● 29.7.15 Otago power consumers pay stadium debt, SO SORRY
● 24.7.15 Stadiums: Auckland works to limits —Dunedin, never
30.6.15 DCC low lifes #RugbyDebtStadium
● 18.5.15 DCC laundering – wring out Regent Theatre Trust, pump DVML
● 11.4.15 Stadium Tides = Subsidies (new English)
● 20.3.15 Stadium costs +$20M per annum, against one Fleetwood Mac…
10.3.15 *Surprise!* Farry’s f.u.b.a.r. Stadium not attracting first year Efts
1.3.15 DCC: DCHL/DVL/DVML limited half year result | Term borrowings…
28.2.15 Blonde ‘lawyer’ takes over DVML —expect no change
2.1.15 Stadium: Online petition to pressure $1M donation
14.12.14 ‘Stadium liability’, from the ODT unprintable letters file
1.12.14 Stadium Editorial Support strategy —ODT
1.12.14 Stadium Review: LGOIMA request and 2009 Town Hall speeches
22.11.14 ODT puffery for stadium rousing ?
● 21.11.14 Stadium Review: Mayor Cull exposed
● 19.11.14 Forsyth Barr Stadium Review
15.11.14 Stadium #TotalFail
12.11.14 DVML: Two directors gone before release of stadium review
● 8.10.14 Stadium: Liability Cull warns ratepayers could pay more to DVML
● 6.10.14 Stadium misses —like it would ever happen, Terry
4.10.14 DCHL & DVML: Call for directors
30.9.14 DCHL financial result
● 25.9.14 DVML on Otago Rugby and Rod
13.9.14 DVML and ORFU refuse to disclose 2012 Otago Rugby deal
10.9.14 Stadium: Behaviours at Suite 29 (intrepid tales)
1.8.14 DVML and the “Otago Rugby” deal (sponsorship and payments)
22.7.14 DVML catering and commercial kitchens….
21.7.14 DVML: No harassment policy or complaints procedure II
16.7.14 Stadium: Out of the mouths of uni babes…. #DVML
● 15.7.14 Rugby stadiums not filling #SkyTV
1.7.14 Southern Region, serving itself —or professional rugby (and Sky TV)
27.6.15 Stadium costs $23.4144 million per annum
24.6.14 Stadium: DVML, mothballing, and ‘those TVs’ #LGOIMA
23.6.14 DCC Annual Plan 2014/15 + Rugby and Rates
● 18.6.14 Crowe Horwath Report (May 2014) – Review of DVML Expenses
9.6.14 DVML: Crowe Horwath audit report (Hedderwick)
2.6.14 Stadium costs ballpark at $21.337 million pa, Butler & Oaten
● 20.5.14 Tim Hunter on Ward, McLauchlan, Hayne #Highlanders
7.5.14 Stadium: Jeff Dickie on costs
17.4.14 Aussie wine – NO parallels at DCC/DCHL/DVML/DVL/Delta/ORFU
3.4.14 DVML: Lost in transaction II (flatscreen TVs)
3.4.14 DVML: Lost in transaction (flatscreen TVs)
22.3.14 DVML, ‘Money for jam…..fig jam’
11.2.14 Stadium: ‘Business case for DVML temporary seating purchase’
● 11.12.13 Highlanders “Buy Us” entertainment: Obnoxious, noxious PROFESSIONAL RUGBY —stay away DCC !!!

Posted by Elizabeth Kerr


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

20 responses to “Lively dialogue with DVML’s Terry Davies —Not ! #LGOIMA #Stadium

  1. Diane Yeldon

    Nice work, Calvin, I still remember the ‘events attraction fund’ slipped in as an unitemised item (!!!) in the Parks and Recreation funding. Cr Stevenson was the one I discussed this issue of where the ‘events attraction’ funding was coming from. NOT out of thin air after all, it seemed.

  2. Calvin Oaten

    My reasons for seeking the above information was as it turns out fortuitous with the latest development vis the Highlanders franchise being uplifted by a consortium of business folk.

    Firstly though, Terry Davies’ trite responses don’t cut it in my estimation because he hides behind the ‘commercial sensitivity’ nonsense as though that he was in a competitive situation. He is not. There is no competitive stadium in the Otago Southland region, nor ever likely to be.

    DVML is not and never will be a commercial business. It is a two-sided “Charity”. It lives off charity and it doles out charity. The figures produced prove that in spades. It annually produces inadequate revenue to cover its costs, suggesting that it heavily subsidises user access to the facilities, to the point where despite handouts of $millions from the DCC (ratepayers) it still racks up annual deficits to the point where in Y/E 2014, despite injections of paid up share capital by the DCC, it had accumulated a deficit of ($7.514m). That in just three years of operation.

    Now we have the new Highlander structure where it is seen by the new regime as a profitable venture, and I quote: “thanks to the ability to work with everybody from the DCC who have given us the most amazing stadium in the country, through to the Invercargill City Council means that we can draw upon the strengths of the South and do even more with the Highlanders.” The licensee will be responsible for marketing and administration and will manage the team. In return it “will keep the gate and sponsorship income.”

    Now right there is the whole “crux” of the stadium fraud. The ticket money goes first to the operators, be it Highlanders, ORFU, NZRU, Fleetwood Mac or whatever, with the only income DVML gets being the crumbs that are negotiated under “commercially sensitive terms” and can’t be divulged.

    We know that there is money destined to encourage events because the DCC specifically budgets for it as annual ‘events attraction funds’. Then there is the Aurora ‘subvention’ monies of $7.292m annually gifted to DVL towards the stadium debt repayment. We know that DVML couldn’t earn enough to pay its rental of $4m pa to DVL so the DCC has committed to pay half ($2m pa) of that. Still DVML comes up with deficits.

    And now we see this bunch of opportunists seeking to make money out of the Super 15 rugby circus using our stadium which the seriously compromised management allows by not charging market rates for the use of the facilities. It’s “CRASS CRONYISM” of the worst possible kind and the Mayor, Council, CEO, GCFO look on and are seemingly content to see the citizens taken to the cleaners in a manner which results in them underwriting costs to the tune of plus $20m per year. “DIS-BLOODY GRACEFUL!!”

  3. Gurglars

    Keep the Gate income?

    How is a stadium supposed to operate in any commercial way if it does not get the gate?

    Surely this is the tail wagging the dog.

    Why would ratepayers finance, support to the tune of $20 million per annum, and subsidise the debt of a building, that did not get the commercial revenue?

    I can understand the rugby union negotiating a charge for the players and officials, but the Rugby Union getting the gate and then paying the Stadium.

    Like placing a rabbit in charge of a lettuce.

    • Elizabeth

      Clearly, Dunedin ratepayers are prepared to be Suckers. All they get is one Fleetwood Mac concert to keep them sweet. Like little lambs.

  4. Gurglars

    At $400 per ratepayer ($20 million pa) we could have all flown to Auckland to watch Fleetwood Mac.

    And we would not have the $5,000 per ratepayer debt of the stadium itself.

  5. russandbev

    Fraud is the one word that can be used in connection with the stadium from the first day that Farry and Harland got involved to today when the amounts of ratepayer money is concealed from the very people that have to cough up. When people conspire to get something they want for nothing, no other word can be used.

  6. JimmyJones

    Calvin, it is a disgrace that our city is now suffering from the foolish decisions of the councillors of the Chin dynasty and a disgrace that current Council staff continue to keep secret the real annual cost of their stadium. Not only is there collusion between Dave Cull and CEO Bidrose to maintain the financial secrecy, but every DCC councillor has been asked to keep secret some aspects of how ratepayer money is poured into DVL+DVML.

    From the ORFU 2014 Annual Report we can get an idea of how little they pay for using the stadium. For the “ITM Cup Home Games” we can see that expenses were $60,369 for the year. I am fairly sure that all, or nearly all of this was used for genuine costs like security guards etc and to pay for the game after-parties and the end of season party and such. But let’s say all of this was paid to DVML in accordance with the secret Venue Hire Agreement – $60,000 is approximately nothing compared to the actual cost of running the stadium which is over $27 million per year. The financial arrangements for the Highlanders games is most likely to be about the same, so it shouldn’t be a surprise to anyone that it loses money every year.

  7. Gurglars

    Your analysis is shocking enough Jimmy, but surely you are not of the opinion that little or no rent is going to the DCC. Say there were six home games. The cost of drinks and food would be a minimum of $2500 per game, that’s $15,000 and they would need 50 staff per game at $100 average per person, that is $30,000.

    That leaves a maximum of $15.369 for purposes of rent, assuming Terry Davies does not get a limo for his guests.

    It seems to me that we need to pursue the numbers with the DMVL.

    No wonder they do not want them public.

  8. Calvin Oaten

    Not only does Terry Davies refuse to divulge DVML’s revenue stats on the grounds that it could compromise its business opportunities, but now he flaunts his derision by shouting out how much and to whom the DCC’s $750,000 grant is being dispensed. That this sum is revenue seems obvious and it seems equally obvious that is one of the reasons why DVML can’t produce a surplus sufficient to pay DVL the $4m pa rental. The other glaring reason is that it is clear beyond all doubt that the rugby factions of the Highlanders, ORFU and NZRU take the gate monies first and then if we are lucky give a pathetic negotiated sum back to DVML for the use of its facilities. Now that the Highlanders are in effect privatised, profit will be the main driver and Terry will be carved up into little bits when it comes to our share towards the stadium debt. The man has no conscience, morals or honesty, but rather hides behind the flawed LGOIMA . Worse, our Mayor and his dull lot condone this robbery of the ratepayers. A curse on all their houses come next October.

  9. Elizabeth

    $20M ??? NO EVIDENCE AT ALL. Open the DVML books.
    N Smith and T Davies are dreaming. The stadium is ALL DEBT.

    “What has happened in the last 12 months is from being a high-risk venue to bring international content, we’re now at the forefront.” –Davies, BS artist

    ### ODT Online Wed, 16 Dec 2015
    Concerts a $20m bonus (+ video)
    By Chris Morris
    International promoters are eyeing Dunedin for regular sell-out concerts after Forsyth Barr Stadium delivered strong ticket sales and a nearly $20million boost to the city’s economy, the man in charge says. Figures released by Dunedin Venues Management Ltd yesterday showed big concerts by Rod Stewart, Neil Diamond and Fleetwood Mac had together pumped an estimated $19.7million into the city’s economy this year.
    Read more

    39 Dunedin Television Published on Dec 14, 2015
    Stadium concerts boost economy by millions
    Survey results show this year’s main concerts at Forsyth Barr Stadium have generated almost $20m for the local economy.

  10. Elizabeth

    Murky on where ORFU and NZRU truly stand in regard to revenue.

    ### ODT Online Sat, 19 Dec 2015
    Deal could mean more big concerts
    By Chris Morris
    Dunedin could be in line for even more big concerts following the signing of a new ticketing deal by the company running Forsyth Barr Stadium. Dunedin Venues Management Ltd, which runs the stadium and Dunedin Centre venues, yesterday announced Ticketmaster would in future act as its ticketing agent for most events at its venues. Ticketmaster NZ Ltd is a subsidiary of Live Nation, the company that brought Fleetwood Mac to Dunedin.
    Read more

    • Hype O'Thermia

      It’s that word “could”.
      I could be in line for a lottery win.
      Someone could have bought me a lottery ticket for Christmas. It hasn’t arrived yet, but there’s nothing strange about that now the mail goes hither and yon on the scenic route before arriving in the half as often postie’s delivery bag.

  11. Elizabeth

    Comment at ODT Online

    Rates down? Never
    Submitted by pablo on Sun, 20/12/2015 – 7:11am.

    There is a key bit missing from the “concert cash” to the city that means our rates will not be moving down any time soon.
    The Fleetwood Mac concert apparently generated $8.98 million for the city, but what Mr Davis’s team has not said is that going by Paymark’s figures (Paymark is responsible for about 75% of eft-pos transactions) that on the same day last year the spend was $8.3 million. On that day there was no concert.
    Read more

    • Richard Stedman

      What they don’t tell us is how many millions exited the local economy when Dunedin domiciled concert goers booked their tickets and reduced their resources for local retail spending, or how much the promoters were subsidised to encourage use of Forbar. It’s a smoke and mirrors thing, also known as selective BS.

  12. Peter

    Terry is a good old fashioned salesman.
    The stadium is still not paying its way. In fact it is only recently that the DCC halved its rental payments to the ratepayers so……cough… could make a small …..cough……profit.
    Notice they never reveal how they work out their multiplier effect with all those fanciful millions pumping into the local economy.
    Notice how they don’t tell us about the subtracted costs.

  13. Peter

    Terry is a salesman. A job that requires slick varnishing skills. He could as easily have flogged cars for the DCC, but I guess Brent beat him to it.

  14. Rob Hamlin

    Richard Stedman is quite right ‘Economic impact analyses are rarely if ever used by private industry to support decisions for themselves, although they are often presented as an input to public bodies they wish to supply with goods and services.

    Typically there are three parts to a full analysis

    1) The revenue generated by the facility/activity, which is then multiplied by a ‘multiplier’. This multiplier is put in on the basis that if ‘a’ attends an event at the stadium and buys a cup of coffee for $4 off ‘b’ who then spends 40c. of that off ‘c’ who then takes 5c of that and puts it towards buying a Maserati off ‘d’ etc etc. It is a notoriously unreliable ‘calculation with many inputs, and is highly location/season specific.

    One variable for example is ‘leakage’. Dunedin is apparently less ‘leaky’ of economic benefits than Tauranga for instance because it is isolated from other main centres. Multipliers are rarely developed by the eventual peddlers of these things, but are purchased off companies who specialise in the production of such numbers. The last time I tried to get one of these as an input to a calculation, I was quoted a high fee and told that I couldn’t see the workings because they were a secret – These guys would fit right in at the DCC.

    2) The displacement by the facility/activity of other economically significant activities that would have occurred anyway. This is the bit that Richard Stedman picks up on. It is a major qualifier for these things, and is exceedingly difficult to estimate in advance for specific cases. However, the use of historical data as is used by Richard in this case typically often yields a very high figure – 90% is not uncommon. A dollar spent in this quite poor community on a Stadium event is a dollar that will not be spent in the City on the Rialto, Mitre 10, Chipmunks etc.

    Displacement also tracks across regions, unlike item (1) above. So, for example, the West End of London was massively impacted by displacement due to the Olympics happening in the East End. Ditto Queenstown during 2011 RWC. The attraction of out of town business is often simply a displacement effect. A dollar that is spent by a visitor from Invercargill will then not be spent in invercargill.

    3) Opportunity cost. This is a form of displacement, but is usually dealt with separately. Opportunity cost considers what alternative benefits would have risen had the inputs to the structure/events been used for other activities. It is particularly pertinent when capital costs are large. The annual costs for the Stadium including everything honestly run to (optimistically) about $20 million a year, or around $200 for every man, woman and child in this City.

    Most of this money flows straight out of town in the form of debt repayments and profits/subsidies for acts. Thus every man woman and child spends $200 less within the community each year than they would have done had the Stadium not been built – Oh yes, and this negative economic effect is also subject to the multiplier: ‘a’ does not buy the coffee. ‘b’ does not buy the coffee machine ‘c’ does not buy the Maserati, so ‘d’ gets nothing and goes out of business.

    My observations after many years are are that only 1) appears in every exercise considered. 2) is rare and 3) usually non-existent. Detailed working and justifications are infrequently encountered. These exercises are universally used as a tool to justify the transfer of money from public to private ownership by the provision of goods and services for publicly funded structures and events, and frequently to disguise the actual economic outcomes of same after the event (no pun intended).

    The estimates are commonly massive and positive to the point of being ludicrous. A different answer can usually be obtained by including 2) and 3), but by that point, while it is complete, the whole exercise contains so many assumptions and shaky or proprietarily ‘secret’ inputs that one is merely exchanging biased bullshit for complete bullshit. You can take your pick of which of those two qualifications you prefer.

    In my opinion, which I think is an informed one, is that the use of economic input analyses as a paid input/justification for public funding/’investment’ decisions, both pre and post event, should be forbidden.

  15. Hype O'Thermia

    “Most of this money flows straight out of town in the form of debt repayments and profits/subsidies for acts. Thus every man woman and child spends $200 less within the community each year…” And the government is trying to tax the stuff ordinary people buy online! Money flowing out of NZ?
    Yeah go on, pick the easy targets – that will cost as much to tax as is collected, Key, Birch et al, have a look at local government big follies, for a change!

  16. Gurglars

    The advantage of such an analysis as Rob has explained is that the DCC and DMVL are allowed to continue to throw $20 million per annum into the ether as the majority of Dunedin citizens read and believe the PR. If the ODT evaluated the value of the stadium critically (value to the citizens of Dunedin vs the cost to the citizens) and published it the stadium would be mothballed, or alternatively paid for by its users (which is the correct method of running it).

    As examples, the rugby union would pay to have games there.

    Rugby goers would pay whatever the ticket price was that was required for the stadium to profit.

    An owner, maybe the NZRU or a benevolent institution would take over its ownership.

    Morris Dancers and fair owners would pay proportionately for any event.

    If theatrical or musical acts were required, ticket prices would justify the cost of running such an event and the cost of downtime when events are not being run (it seems to me that ticket prices in this case are very high, therefore the model is incorrect, either the promoter or the performer’s payment is out of whack) However if those payments are necessary, ticket prices must be higher,

    To what advantage to the citizens of Dunedin who do not go to rugby matches or events is the stadium if it does not meet a balanced budget?

    After all the citizens who do not go outweigh the number who do.

    Isn’t democracy defined as the greatest good for the greatest number?

    In Dunedin democracy is defined as

    “The greatest good for the greatest number of DCC (including DMVL) employees.”

  17. Peter

    Of course the fact that DVML doesn’t want to come up with the goods as to how they have arrived at the alleged financial spin-offs tells us lies are being told.
    Why not, once and for all, silence the critics by slamming them with the proof?
    ‘Investigative’ ODT goes along with it. Shame on you.

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