DVML books $36,475 profit from ITM Cup

Click to enlarge.
Click to enlarge.

The company running Dunedin's Forsyth Barr Stadium is celebrating a rare financial win after confirming a small profit from this year's ITM Cup rugby season.

Figures released to the Otago Daily Times showed Dunedin Venues Management Ltdbooked a profit of $36,475 after hosting six Otago ITM Cup home games, including a semifinal against Tasman on October 19.

The company secured total revenue of $114,418 - including $74,066 in venue hire fees from the Otago Rugby Football Union - but faced costs totalling $77,943.

The results came after a turbulent year, including revelations of a $3.2 million loss, and left DVML chief executive Darren Burden "reasonably happy" yesterday.

However, there was room to improve, and he wanted to build on the result next season.

"I think we have done pretty well. I would like to see an improvement on that next year."

The result comes after DVML also booked profits from this year's Super 15 season and from hosting its first All Blacks test on September 15, although details could not yet be released, he said.

A breakdown of ITM Cup figures was released after an official information request by the ODT and showed DVML's returns had improved as the season went on.

The company was left with a profit of just $440 from Otago's first home game, against Northland, watched by a crowd of 4000, but then posted a $78 loss when the second match, against North Harbour, attracted just 2810 fans.

However, the situation steadily improved.

The biggest return came when Otago hosted the semifinal against Tasman on October 19, attracting a crowd of 6750 and generating a profit of $19,358.

DVML received a share of all ticket sales from each ITM Cup match, although the "lion's share" went to the ORFU, Mr Burden said.

However, the ORFU did not get a share of food and beverage sales, which generated $35,899 for DVML across the season.

Mr Burden said DVML had faced challenges during the ITM Cup season, including building a working relationship with "lots of new faces" within the Otago Rugby Football Union, attracting sponsorship and fans.

The figures also showed DVML staff had become "a little bit smarter" about running the venue efficiently as the season progressed.

Operating costs were cut from $17,754 for the first match to between $11,000 and $12,000 for later normal season matches - while keeping both the north and south stands open - before rising again to $13,600 for the semifinal.

chris.morris@odt.co.nz

 

I would choose stadium over library

IWAS to infer that I'm not well read is game. I in fact read a lot, but I don't need a public library to do so. Don't get me wrong unlike others I accept my rates go to things like that, but if I was to choose between paying $65 towards a world class stadium bringing sport and events to my city, or a dated library that in itself is becoming a redundant institution I would hands down chose the stadium. What makes yours and your friends' comments incredible is the fact you only question the stadiums debt levels and not the levels of the assets you're paying double for. Why is it? It's a matter of taste.

Stadium versus public library

How can you realistically compare two community assets  which are so different? (And many would consider the stadium a liability.) The library is undoubtedly multi-purpose and is accessible to everyone free of charge for long hours during weekdays and weekends.

Ratepayer polls everywhere in NZ have shown library use to be a top recreational activity, way ahead of participation in organised sport. NZers are great readers by world standards.

The present DCC purpose-built central library is IMO far from outdated but something the city can really be proud of. Give it a few years and it will be a 'heritage building' and in a great, easily accessible location too. We don't need a bigger one either - just maintain the present high quality of books and service. I'm sure a poll would show the vast majority of Dunedites really value this library.

 

Contractors' costs only

The published financial summary details the costs for external contracted services. That's good, now we know what those were. But where are the internal costs for the same period? Where are the costs for lighting, heating, electricity, grounds maintenance, water etc? These are the event costs that the stadium is directly responsible for paying and are not included in the published summary. And where are the costs for the salaries of those staff members employed directly by DVML, for the time period spanning the ITM Cup? Presumably those staff were paid during those 12 weeks. The only staff costs shown in the summary are those of external contractors. $300k of costs were incurred by DVML during the ITM Cup which need to be added to the expenses column in order to complete the picture.

Books are better

Books are better than rugby stadiums. Without books there would be no rugby. Learn to respect books. Study them and you will learn you culture. Dunedin has a pretty good public library, even by international standards.
Most good rugby players are well read. 

 

Not up to DVL

Ian Smith its not up to DVL to make up $600m debt the city faces, so at least its not getting worse. Why don't you question why ratepayers have to shell out $130 for a hideous dated public library? It's used by schools and the elderly so I questions why you're OK with paying double the stadium for this city 'asset' when people research and read online or on their kindles and ipads. 

Profit mainly from food and drinks?

I hate studying accounts but am I right in thinking that the profit was made on the food and drinks? If so, bad news, because this is one place where people can easily economise as times get tougher. Especially if they feel they are being ripped off as a 'captive' audience.

A great start

MikeStk: Regardless of the amount of profit, you would still never be satisfied.
Instead, why not at least say this is a good start. Yes, they have a long way to go (in your eyes) but can't you be positive that at least they arent losing more money?  

Keep things in proportion

In a city owing well in excess of $600 million; on a date when Standard and Poors signalled an impending downgrade of the city's creditworthiness; in a week when the issue of a flooded and landlocked Hoopers Inlet has become a political football with neither the DCC nor the ORC, having the funds to do the work, (while both were, as I recall, the conspicuous 'big spenders' of the era of pre-stadium euphoria); all is suddenly right with the world again because the DVML supposedly makes a highly conjectural profit across six matches of the ITM cup? 
Pathetic.

Where the $100K figure came from

Mike and other sasked in public for the "opening the doors" cost for the stadium, for months if not longer without extracting any information.  At last Mr Davies (Mr Burdon's predecessor) answered, giving the figure of $100,000 as the cost to hold an event at the stadium, that was to cover costs so we the ratepayers would not be subsidising event promoters and organisers.  Until someone in as knowledgeable a  position as Mr Davies comes up with an alteration to that number I will take it that he was telling the truth.  With official investigations setting in at last we may see some undisguised facts and figures dragged into the daylight.

$100k nonsense

This analysis provides a more realistic picture of the incremental cost per opening.  The $100k figure which Mike Stk has used was always spurious at best and clearly included an allocation of stadium fixed costs.  Which of course is fine from a pure cost accounting standpoint, but to intimate that every stadium opening has been costing an additional $100k is absolute garbage. 

Defining profit

So utilising MikeStk's "logic" as to what constitutes a profitablity there must be very few profitable entities in existance, in that every piece of furniture, cup of coffee, garment, professional service, does not create profit as it in itself does not cover the total cost of running the associated business.  Many would disagree with that logic MikeStk, many would in fact be able to advise as to the respective profit margins of their specific goods and services, whether that be the previously mentioned cup of coffee at your local cafe, or the hosting of an ITM cup match. 

Bitter pill to swallow!

Mike, why are you so bitter? is it because you have finally been exposed as making up the 100k operating cost to open for one day!

Please give us some respect

I think that with all that is going on with the City’s finances, it might be time to stop with the creative accounting and treat ratepayers with the respect that they deserve.  If you want to report a number before paying the rent, before paying any interest, before providing for any depreciation then do so but don’t call it a profit.

$100,000?

So Mikestk, please explain how exactly you came to the conclusion that it costs DVML $100,000 to open the stadium. From the wall it seems you maybe slightly misinformed?

Hmmmm interesting

Operating costs from $11000-$17,745 per game, well that is well shy of the $100,000 to open the doors some people like to quote. Mind you we all knew that was a made up figure anyway. Poor old haters are not going to like the article one little bit.

A drop in the proverbial

A profit of $36000 is nice, but the stadium needs to make a clear profit of twice that each and every week of the year just to pay the lease costs. Anything less than that is going backwards. $70000 per week is only to service the borrowing and would do nothing about the accumulated losses for DVML so far or repay any of the debt itself, which is held by other arms of the council.

salary part payment

That $36,475 'profit' will go a little way to paying DVML CEO, Darren Burden's $200-225,000 salary for this financial year. Let's not be negative and think about other stadium costs being run up at the same time as this game was being played.

Over to you, Mike Stk, for some back of the envelope calculations. 

Overhead?

They don't appear to be including their overhead - I wonder what the real numbers look like, when they include a fair share of the costs of DVML staff, security the other 6 days of the week, providing free marketing services to the ORFU, rates, insurance, grounds upkeep, maintenance, depreciation, rent to DVL, etc etc

What's really sad of course is that they feel they have to trumpet that they've found a way  to actually make a profit on an actual event, even if they haven't included all the real costs,  is this the first time?

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