Fresh questions about viability of stadium financial model expected

Forsyth Barr Stadium at University of Otago Plaza. Photo by Bruce Munro.
Forsyth Barr Stadium at University of Otago Plaza. Photo by Bruce Munro.
The size of the financial hole occupied by Dunedin Venues Management Ltd, the company tasked with running the Forsyth Barr Stadium, will be revealed later today.

The company's long-awaited six-month results are scheduled to be made public at a media briefing at 12.30pm, fronted by Dunedin Mayor Dave Cull.

Dunedin City Council chief executive Paul Orders and DVML chief executive David Davies will also attend.

The Otago Daily Times understands the report will reveal a significant loss for the first six months of the 2011-12 financial year.

Projected full-year results will raise fresh questions about the sustainability of the stadium's financial model, the ODT has learned.

DVML was established by the council to run the stadium and other council-owned venues, and the company's six-month results have been touted as the first indicator of whether the stadium will pay for itself, or end up an annual drain on city finances.

However, the company's results were held back for "formal advice" when those of other council-controlled organisations were released in early March. Their release was delayed again later that month.

Council finance and resources general manager Athol Stephens, speaking at the time, said he expected the report would show the first six months had been "a challenge" for DVML.

The period covered the last six months of last year, including four Rugby World Cup matches, on which DVML "spent a fair bit", but from which it did not make money.

That event was expected to result in a $400,000 loss for DVML, and, despite proceeds from the Sir Elton John concert, the company remained in "an establishment phase", Mr Stephens said at the time.

DVML recorded a $3.2 million loss in the financial year to the end of June 2011, covering the period before the stadium was built and during which it had no income.

chris.morris@odt.co.nz

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