The company which runs Dunedin's Forsyth Barr Stadium
faces an uncertain future as it eyes the expiration of deals
with sponsors, members and even the Highlanders Super rugby
It also continues to operate under a cloud while awaiting the
outcome of a major review of the stadium operation, now
expected by early August, that seeks to address the venue's
The predicament prompted Dunedin Venues Management Ltd chief
executive Terry Davies to deliver a blunt message about the
need to reduce the venue's annual rent.
But he also remained ''bullish'' about retaining members,
sponsors and the Highlanders, while saying the company's
finances were already showing small signs of improvement.
His comments came as DVML's latest statement of intent was to
be considered at today's full council meeting.
The document included forecast losses totalling $3.34 million
over the next three years, a slight improvement on the $3.79
million projected in February.
That was based in part on reduced costs, tightening budgets
and an expectation the venue would secure two All Blacks
tests, in 2016 and 2017, but none next winter.
However, the venue faced risks, including the looming
expiration of revenue-generating agreements, the document
That would begin with the Otago Rugby Football Union's venue
hire agreement, due to expire at the end of the year,
followed by the Highlanders at the end of 2015 and most
membership and sponsorship contracts in 2016.
Mr Davies said part of the difficulty was most membership
contracts were signed close together, when the stadium was in
start-up mode, meaning renewal periods were not staggered.
That made the threat of existing members opting not to renew
''a big risk'', he said.
''In any business, membership retention is a major priority
and this is no different.''
The company planned to introduce new offers to stagger expiry
dates, but was also trying to improve benefits for its 2200
members, he said.
That included free entry for members to next month's football
clash between Newcastle United and Sydney FC.
The company had earlier this year budgeted for a 10% drop in
memberships as they came up for renewal, but was now more
''bullish'' about retention, he said.
Talks had also already begun on new venue hire agreements
with the Highlanders and ORFU, and he was confident there
were no ''alarm bells'' ringing yet.
''You never know, but at the moment it's all positive.
''We're working closely together to ensure all rugby content
is held here. We don't want to lose any of those partners
that we've got operating out of the stadium.''
However, the key to the stadium's future could come with the
findings of the stadium review unveiled by Dunedin City
Council chief executive Dr Sue Bidrose earlier this year.
Mr Davies was unequivocal the company's $4 million annual
rent burden - used to repay stadium-related debt - was
''unsustainable'' and needed to drop.
''I'm not afraid to say that's a major stumbling block and we
need to get that model right.
''We need to get the community to understand that until that
model is right, there will be no confidence around this.
''The $4 million rent is unmanageable.
''A desired outcome would be no rent, or a peppercorn rent
like others pay.
''That's my ideal result.''
Even a cut by half, to $2 million a year, would help the
company's financial projections turn from red to black,
allowing profits to be reinvested in the venue, reducing the
risk to ratepayers in future, he said.
However, whether ratepayers would be asked to pay extra - to
offset the reduced rent from DVML - was not something Mr
Davies would comment on.
''I can't answer that.
''All I can put forward is what is the right direction for