Tag Archives: Bad business

NZRU ‘hustles’ towns and cities to build stadiums

What happens to our cathedrals, the large stadiums found in every major centre, if we lose faith?

### stuff.co.nz Last updated 05:00 14/06/2014
Sport
What about the state of New Zealand stadiums?
By Matt Nippert
[Excerpts from a longer article…] The covered 31,000-seat Forsyth Barr Stadium in Dunedin, constructed in time for the 2011 Rugby World Cup, may be the newest major sporting facility in the country but has already proved the most controversial. The bulk of its $224 million construction cost came from Dunedin City Council, but ongoing costs to ratepayers have caused considerable angst. Ratepayers were forced into a $2.3m bailout in May, and are mulling whether a permanent annual subsidy will be required to keep it running.

Getting to grips with exactly how much stadiums cost is a tricky exercise. Construction has often been piecemeal, with grandstands redeveloped or rebuilt over time, blurring total capital expenditure. And determining operational costs – whether stadiums require ongoing contributions by ratepayers – is further complicated by many facilities being run from within city councils or by council-controlled organisations. This makes the extraction of a discrete set of accounts, most notably in Dunedin and Waikato, an impossibility.

Analysis of accounts for Wellington and Auckland, run by dedicated trusts and two of the most transparent stadiums, shows that break-even is realistically the best case.

At New Zealand Rugby headquarters, chief executive Steve Tew broadly agrees that the glory days [of attendance at games] are over. Viewers watching broadcasts of a game have supplanted punters going through stadium turnstiles.

But there is one niche where the faith of the rugby faithful remains strong: All Blacks tests. Hosting the national team is often the only time stadiums up and down the country reach capacity.

While great for New Zealand Rugby coffers, Massey University’s Sam Richardson says the All Blacks have warped stadium construction priorities. “It’s an absolutely huge detriment. If you’re building a stadium where the financial viability year to year relies on an All Blacks test, there’s no question New Zealand Rugby plays a massive part in whether these facilities are going to be used to their potential,” he says.

Canterbury University economist Eric Crampton says building capacity for a solitary annual All Black test is akin to “buying a six-bedroom house just in case both sets of grandparents come to visit at the same time”. Crampton says the proliferation of large loss-making stadiums, both in New Zealand and worldwide, has been mainly because of the economic equivalent of hustling. “Sporting teams have been able to convince councils all over the place – and have been able to play them off against each other by threatening to move – to build excessive stadiums.
Read more

****

“Fifa, like the International Olympic Committee, is widely regarded as corrupt. In that, it reflects our flawed species; while capable of fabulous feats, a dark side lurks.”

### ODT Online Sat, 14 Jun 2014
Editorial: Revelling in sport
OPINION As Dunedin and the South gear up for the excitement of tonight’s rugby test in the city, a sporting event in another league entirely kicked off yesterday.
Read more

Garrick Tremain – 14 June 2015

Posted by Elizabeth Kerr

87 Comments

Filed under Business, Construction, DCC, Economics, Geography, Media, Name, New Zealand, People, Politics, Project management, Property, Site, Sport, Stadiums, Tourism, Town planning, Urban design

Wellington issues

Thanks to James’ twitter feed…

### stuff.co.nz Last updated 05:00 02/01/2010
Wellington ratepayers bail out tourist attractions
By Dave Burgess and Emily Watt – The Dominion Post
Some of Wellington’s key visitor attractions are in dire financial straits, and it is ratepayers who will be asked for a bailout.
Zealandia: The Karori Sanctuary Experience has received another $2.3 million in a secret deal sealed behind closed Wellington City Council doors – and it now wants more money to set up a cafe.
Council documents reveal funding issues for other organisations, including the St James Theatre, which is so broke that it tends to avoid risky shows, the cable car, which might have to ask the council for more money to pay for safety upgrades, and the Basin Reserve, which cannot afford to maintain its LED replay scoreboard.

The Wellington Regional Stadium Trust is not controlled by the council but is included in the briefing papers, which warn that it may be unable to repay a $15m council loan due to ground upgrades ahead of the Rugby World Cup. The trust has also yet to renew the contract for the NZI Sevens from 2012 and beyond.

Mayor Kerry Prendergast and council chief executive Garry Poole refused to answer questions.
Read more

Post by Elizabeth Kerr

Leave a comment

Filed under Economics, Politics, Project management, Town planning, Urban design