ORFU to be run by DVML

Friends living in Seattle, USA, could tell me, early-on, what we were likely in-for with professional sport in Dunedin, because similar scams and stunts were pulled in their city a year or two in advance of our council caving-in to the Rugby/Pro-Stadium-at-any-cost, element. The threat held over councils and local-bodies in the US is usually that of 'give-us-our-way, or we'll go elsewhere'. Well, for Dunedin, I can think of no solution I would like better. Please take Rugby, and any other professional sport looking to sponge off Dunedin's ratepayers, and take them as far away as possible. South Africa, Australia or Argentina, if need be; just well away from here. Also, have written into the contracts, that they are not to attempt to return, under any circumstances.

Ultimately this debacle with the ORFU is of their own making and the Dunedin ratepayer via the sycophantic decision making of the Dunedin City Council, should not have to bail them out anymore. Yet we are expected to.

DVL/DVML sits so far outside DCC/City Council/DCHL that it is almost immune to ratepayer inspection of its viability and proceses.

And why do people still think the Highlanders are part of the ORFU?  They aren't! They are a franchise run by the NZRU. They no more represent Dunedin than Man U do!

We the ratepayers need to accept that we have been right royally screwed and find some way to have an independent investigation into what has occured.

Guadalajara: I think you completely miss my point - there's no need for the article to say that the ratepayers will be subsidising this particular enterprise,  they are forced to subsidise every single thing that happens at the stadium, cummulatively to the tune of ten to twenty million dollars a year.

...to hear your standard spiel MikeStk, but you still haven't answered my question.

guadalajara: Everything that DVML does at the stadium is losing money, Dave Davies has indicated that it costs at least $100,000 just to open the doors, and to my knowledge they've not yet charged anyone that much for an event. And that's just the day to day running costs - they're not covering a cent of the interest on the stadium debt. So far the city has taken to borrowing more money just to pay that, not any of the principal. In the end this falls on the backs of the ratepayers. We'll largely see it as a loss in the rebate we get from the profits from the DCC companies, as when their profits and DVL's massive losses are amalgamated we're the ones who get stuck with the bills.

The stadium's economic model has been broken from day one. It was obvious from the beginning that the numbers just didn't add up. Integrating that organisation with another with a long history of equally broken economics seems to me to be the financial equivalent of moving one group's financial hole into the base of the other's and climbing in because it will all be so cozy.

The best thing the city could do at this point is to mothball the stadium and start a massive fundraising drive to raise enough money to get the stadium finances to the point where they're sustainable - we really need rugby's promised private fundraising right now.

...but can someone please explain to me where in the article it states that this particular arrangement will require ratepayer funding?

I would suggest that you wait to hear some more details before you jump to conclusions.  And if DMVL is doing this for free - which is extremely unlikely - then you will have every right to get upset.

I thought the whole idea of the DVML was to take the Forsyth Barr Stadium off the DCC books and let it stand on its own feet.

If that's the case, doesn't that mean all these comments about the DCC running the ORFU are factually incorrect?

fmr_ca: On the contrary. A month from now the ORFU and the Highlanders will have no bargaining power - there will be only one place for professional sport to be played in Dunedin and they will have to pay the going rate or not play rugby. If I were Dave Cull the day the ORFU lease runs out I'd borrow a bulldozer and run a divot down the middle of Carisbrook to underline that fact.

If Dave Davies and DVML really had the city's best interests at heart they'd wait and bargain from a position of power rather than caving in as they seem to have done. It would seem that DVML and it's board have no concept of how to do business in the real world and how to negotiate the best deal possible. They seem captured and starstruck by their customers, continually renting out the stadium for free or next to nothing to all and sundry. I think it's time we replaced DVML's board. [Abridged]

Auditor-General? Ombudsman? Local Government Minister?

How bizarre that a private group, the ORFU, is set to join DVML, a council-owned entity, to "align resources" and"reduce overheads, share costs and achieve greater benefits for fans, sponsors and all stakeholders."

So the stadium is a rugby stadium after all. 

I too thought this was an April Fool's joke that got missed earlier it the year! I am incensed beyond all reason at this decision. Time the lawyers are bought in, professional sport is not council core business. How incompetent can this lot get? They have no mandate for this and continue to throw ratepayers money down a big hole. Come on Dave and Co, surely you cannot be serious? We absolutely must pursue avenues that investigate this profligacy with our money and bring our employees to task!

Give it a couple years. Until ORFU has no memory of having been an semi-independent organisation and is completely another dept of the DCC. Then pull the plug on it completely. That is the way to get rid of that parasite. Yeah!

The city has no right to further encumber ratepayers in the name of rugby.  It has already given us the highest debt per ratepayer in the country, this in a city with the lowest average income per ratepayer.  Surely the mayor and councillors have a duty of care to be fiscally responsible and this does not extend to making commitments to financially support a business that has proved beyond all reasonable doubt that it is failing in a spectacular fashion.  If any ratepayers want to give still more to rugby then I would suggest that they are free as individuals to sponsor or at least join a rugby club. Come on Mr Mayor and councillors, act responsibly and reign in this council company.

No mention of management fee, so are the ratepayers on the hook for running the ORFU now?  They can't afford a commercial rental for the stadium or to run their professional union? The DCC is effectively guaranteeing a failing business. The ORFU and the Highlanders have plenty of bargaining power as there are no other regular users of the stadium stepping forward, and DVML need the events, even if they are going to cost the ratepayers a fortune.  It has been a financial disaster from the start and we still don't know what the true operating losses will be due to the shuffling of debt and costs around. I look forward to big increases in Edgar Centre  and pool charges to help prop up professional rugby.

What's the council doing propping up a failed business-the ORFU-through its subsidiary DVML? Other businesses don't have this luxury. The reason, pure and simple,is rugby.

It is clear the council will continue to siphon off rate payer money for the ORFU and the stadium because they can't admit the decision to fund the white elephant was a huge financial risk/mistake in the first place. The onus is on making the stadium look like its a 'business' when it's not. It's being propped up by a compliant council who see nothing wrong with wasting money on a failed business.

The stadium will cause more tears for  many years to come till we finally acknowledge that the plug has to be pulled on it.

No details yet on this move, but it would seem to make sense for both parties.  Presumably the ORFU will pay DVML a management fee.  More revenue for DVML, when clearly every dollar is important.

I assume that this is some sort of bizarre April Fool's jape that has somehow slipped through the editorial control of the ODT. 

Why on earth would the Dunedin ratepayers want to take over any sort of role with an organisation that has been slated for years by its own auditors? 

The ratepayers of this city have long supported the ORFU and the Highlanders both openly and covertly through the supply of goods, time and services by council owned businesses, it has acted as the ORFU banker at mate's rates, it has purchased Carisbrook from the ORFU to prevent the ORFU being declared bankrupt, it has purchased a new rugby stadium for them, and now it wants to effectively take over a loss making venture while at the same time presumably supply them with new offices.  The next thing we will learn is that DVML (read ratepayers) will not charge the ORFU for rent and services as it will be seen as charging itself. 

It is way way time for a fully independent forensic examination of the DCC and all associated entities so that we all understand in words of one syllable the unholy alliances between professional rugby, the Tartan Mafia and the DCC to fully expose just what has happened to our city.

Excellent - this will allow DVL to put the pressure on the ORFU and its members to finally raise the $40m private fundraising that was promised - with the ORFU out of the loop they can remove the ratepayer subsidy of rugby and simply raise the ticket prices to cover the real stadium costs that they face.

To pay the loans DVL needs to earn $15m/year - we know that the stadium earns less than $100k an event from concerts - less that 1% of what's needed, it's going to fall on rugby to pay for the rugby stadium - with 5 Highlanders games a year with the usual 8000 attendance means they'll have to charge on average $375 extra a seat to break even.

This should be enough of an incentive for what's left of the ORFU to start raising that private fundraising.  Raising the $45m will reduce the debt costs by about a third bringing seating prices to about $250. Numbers that show just how stupidly large and expensive the stadium is compared to the available market.

I hope that DVML is charging market rates for the space it will be renting in the stadium to what remains of the ORFU, the DCC should not be undercutting other commercial landlords in the city.