Test at stadium brings $8 million: report

Terry Davies.
Terry Davies.
An $8 million cash injection for the Dunedin economy from June's All Blacks test shows Forsyth Barr Stadium is doing its job, Dunedin Venues Management Ltd chief executive Terry Davies says.

Mr Davies was commenting on an economic impact report, released yesterday, which showed the All Blacks v England test match, which drew a crowd of nearly 30,000 to the stadium, pumped an estimated $8.15million into the city's economy.

The figure was extrapolated from a survey of 1741 fans who attended the match, carried out for DVML by consultants Butcher Partners, of Christchurch.

Mr Davies said separate ticket sales data also showed more than half the crowd - 17,161 fans - came from outside Dunedin, including about 7.5% from outside New Zealand.

The survey found respondents, on average, were in Dunedin for 2.3 days and spent $476 each, with retail, hospitality and accommodation providers the big winners.

And, of the 17,161 fans attending the test after travelling to Dunedin, 13,043 would otherwise not have come to the city, the survey found.

That was a ''key factor'' for the stadium and the city, Mr Davies believed.

''The reality of the stadium is this is about economic impact. Any time we can showcase the fact we are generating additional new money for the city, that's what we are about.

''This is the fundamentals of why the stadium was built - it's about driving new money into the city and this epitomises what the stadium was about.''

It was the first time DVML had released an economic impact report since Mr Davies' arrival earlier this year, but it was something that would become a regular part of major events in future, he said.

The spending data was based on a ''robust'' multiplier, used by the Dunedin City Council and tourism sector, and Mr Davies was confident the data was solid.

''We are going to get knockers ... but it's real. There's real money being spent.''

The release of the report followed multimillion-dollar losses by DVML in the years since the stadium opened, and forecasts released earlier this year that showed it stood to lose another $3.34 million over the next three years.

The company's predicament has prompted a wide-ranging review of the stadium operation, which was due to be completed by next month.

Whatever the outcome, Mr Davies said, the reported results showed the city had a venue it could be proud of.

''It tells you the stadium is one of the few vehicles we have in the city that can drive ... that sort of revenue through the city.

''It delivers significant economic benefit and jobs for the city.''

chris.morris@odt.co.nz

Speaking for myself

Bones: when I start something with "I think ..." I am not "pretending to speak for everyone" - please do not put your words in my mouth and pretend they are mine.

Let me restate what I said below, I think that all professional, for profit, activities, including professional rugby, should pay for themselves, they are businesses supposedly run by grown ups. The DCC should not be holding the ORFU's hand day by day, nor bailing it out when it overspends its bank account.

I also think that city councils have a place providing communal facilities for their citizens, including playing grounds for amateur sport, even including rugby.

However I do think that in Dunedin rugby has willfully confused these two spheres to take advantage of the citizens of Dunedin taking far far more than it's share of our rates while making wild promises it has never kept - where is that $45m in private fundraising they promised? we're all still waiting for rugby to make good on their promises.

So yes I'm down on rugby, not for being rugby, but for costing the city about half a billion dollars it doesn't have when they could have done up their own existing grounds for far less than the cost of the "private fundraising" that in retrospect they obviously never really intended to raise.

Public assets

I guess one difference is that I can access the Botanic Garden, library, museums and galleries with my family >360 days a year.

I suspect the reported "$8 million cash injection", is a mirage. It would be interesting to see some real figures.

Stadium vs museums etc

Indeed Bones, perhaps echoing others, the other facilities are doing their stuff daily, and after all, preservation of our culture and heritage is paramount and are the sort of things people come to town 365 days a year for, spending their money.
The stadium, sucking huge amounts for miniscule purpose and benefit like 40 men kicking a ball to lots of boorish yelling, seldom does it's thing at full capacity. Justifiable? Certainly not. Its comparison in analogy would be paying the costs for a truck that is used daily, while we also had to fund and maintain a 747 that was only used 3 times per year.
Sadly most of the rest of the city is suffering for it now. While other cities have a bus service that includes real time information, all that's happening with ours is it's being slowly downgraded with cuts here and there.

Don't pretend to speak for everyone

Mike, you'd agree with me (re: user pays) then go onto state that the DCC "should provide public gardens, museums, public art galleries, playing fields for amateur sport...". For free, I'll add. Why? Why should my rates be any more directed towards those attributes that you so patently like, than the facility called FBS that I feel is a brilliant addition to our city's assets? (But that you do not like.)

Over the years of both of us posting missives into this forum, it's become crystal clear to me, at least, that you dislike pretty much anything at all to do with rugby. You've been 100% consistent with that theme. And I get it.

However, your diatribes against the FBS are equalled only by your complete silence on anything else from what I'll term 'the arts' sphere'  that also siphon public funds. Such as the museums, our public art gallery and the such like. You're patently very prepared to hook into the FBS at the slightest provocation, yet remain utterly silent about the multitude of other entities that gain public funding.

From where I'm from, some may call that unbalanced.

Carisbrook

To guadalara I would reply that at the time the DCC fell for the NZRFU's bluff that they wouldn't field anymore test at Carisbrook unless it was upgraded. In hindsight this could have been done for $35m. The tragedy is that long after the DCC moved away from Carisbrook and built the new stadium for a staggering cost of $260m (all up) the NZRFU came out publicly and said that they were always open to playing tests at an upgraded Carisbrook. Ratepayers still look forward to the stadium review.

User pays

Bones: I think the difference between what you suggest and what Mike suggests is this: No one pulled the wool over the ratepayers eyes in regard to all the other community facilities available to use like "our Botanic Gardens... the Art Gallery... the couple of museums... (etc).' We have always known they are community facilities that provide for the cultural and recreational needs of the city. That they cost us is not in dispute. The difference is no one lied to us about the why's and wherefores of those facilities.

As far as rugby is concerned, add up all the money the ratepayer spends to maintain the numerous playing fields around the city, deduct any income the city receives from the various rugby clubs that occupy those areas and see how much we commit to rugby each year. Then add the current and future stadium costs.

And as Mike has shown time and time again, the stadium is not the economic powerhouse it is frequently claimed to be. And that is the crux of the matter.

Given how many rugby matches are held elsewhere in NZ without the protection of a roof, did we really need it? [Abridged]

Don't drag us down

Bones: I'd agree with you if you were comparing apples and apples - I think that the DCC should provide public gardens, museums, public art galleries, playing fields for amateur sport etc - but I don't think they should fund plant nurseries, antique shops, art galleries that are there to sell paintings, or venues for professional for profit sports or entertainment. Those places are for-profit businesses and should stand on their own two feet in the market place.

It's a simple distinction, the ORFU and NZRFU are in it for the money. The ratepayers of Dunedin have no business subsidising their profits, and it is immoral for the DCC to force them to against their will. Those professional organisations should hire someone who actually understands accounting and charge their patrons the true costs of going to their games. If they lose money they should pay their directors and players less, not hit up local ratepayers.

Remember that Carisbrook was built by your grandfathers, people who actually paid for it free and clear. The ORFU's wasting away of that wonderful legacy has been pitiful - and the resulting impost on the City of Dunedin is threatening in turn the legacy of my great and grandparents who built and paid for those wonderful botanic gardens and museums and art collections. Before you start talking about them is the same breath as your financially moribund stadium remember, we don't want to be dragged down to Rugby's financially inept level, instead we need to find a way to protect the rest of us from the on going rugby stadium disaster

Mike's correct: Fair is fair

Mike, in theory I agree. However, does moving down that 'user pays' path mean we should be looking forward to costs (or higher costs) being applied to enter and make use of other rate-payer supported entities such as, our Botanic Gardens... the Art Gallery... the couple of museums... (etc). I'm not sure where the line exists with this, but feel that fair would only be fair if we apply your user-pays philosophy to those other entities, as well as FBS.

Regards,

Bones (one of those 'selfish rugby fans' you mention, who's "sponging" off the Dunedin rate-payer. I hang my head in shame...)

 

Missing the point

Yes I'm sure a few people came and stayed with friends, but 17,000 people didn't suddenly find 17,000 spare seats on planes on a route where most flights are heavily booked - AirNZ would have to have flown in an extra 130 planes (which flew away empty) before the game and another 130 afterwards to take them home - if such a thing actually happened it would be big news.

No what mostly happens is something much more mundane, local area farmers drive in for a big game and then drive home afterwards.

There's no need for massive empty hotel room space, or fleets of aircraft, those are feats of imagination by the marketing guy who was paid to provide a study with a large number that could be used to wave in the media to try and persuade us that the rugby stadium is more valuable to the community than the financial liability it really is. The last time they produced a study like this we debunked it because of exactly the same mistakes, really DVML do need to get more creative if they expect people to believe this twaddle.

Instead this stuff is so patently unreal I suspect the guy who wrote is likely auditioning for Ede's job on the 9th floor of the Beehive now that that guy is MIA.

P.S.

I only know because my parents have travelled to Auckland to spend their cash hard earned in Dunedin. How about Mr. Davies does an analysis of the loss of money due to events we're still missing. I'm sure he'll find it's far greater.

Cirque du Soleil

The stadium was sold to the people on the basis it would be a multi-purpose venue. Claiming its doing well on the one thing it was built for is slightly redundant. I note Cirque du Soleil are in Auckland at the moment yet have some how neglected to pop down to swing from the stadium's roof.

No test matches at Carisbrook?

It really doesn't matter anymore but pretending Carisbrook woud have been off the Test Match agenda is ridiculous. They are holding a Test Match in Napier tonight, a small ground with an extended capacity of 18,000. Just on that why does the NZRFU behave in this way? Eden Park, The Cake Tin, FSB all broke and they play in Napier - what is going on?

Not correct Barnaby

Had it stayed open, Carisbrook would have been extremely unlikely to ever host another test match.

Fair's fair

Steve: And that's a large part of the problem, isn't it? The people benefitting the most from the rugby stadium are not the people stuck paying for it. Let's charge more for the tickets so that the selfish rugby fans stop sponging off of the ratepayers, and tax the businesses that claim they are making all these extra profits from the stadium to help pay for their boon.

Stadium

Even if you were to believe the new Mr Davies' $8M claim, the real point is that you'd have had exactly the same number coming to Carisbrook without the $266M cost! Add to that Davies' extravagant salary, plus all DVML and DVL costs, plus the $400,000pa DCC top-up Events Fund. The truth is ratepayers will never be told the true cost. The abuse and manipulation of facts, figures and statistics have been elevated to an art form. This dwarfs the alleged Citifleet scam along with Mr Swann's effort. Enrol now for Propaganda 101.

A shed load of events

Bones: You have failed to address the main issue which is what did these events cost ratepayers? It is all very well having a couple of thousand turn up, to see a Hollys tribute band or have Dunedin ratepayers underwrite a soccer match at a cost of $130,000 in losses but how about some solid data on what this is costing us all? It is a fact that we are still paying $20 million in interest. On top of that, it is projected to operationally lose $3 million or so for the next three years. In addition DVML loses over $1.3 million per year. There is $24 million to pay out not including any debt repayment we manage to scrape up. These are just the costs we know about. On top of that we lost $3.1 million on Carisbrook, bailed out the ORFU and there is a Stadium review being undertaken by Dr Bidrose attempting to find out where millions in cost overruns went. Is there anyone who can see what financial benefit there is in this for us all? Build it and they will come has not eventuated, it has not brought more students to town as the roll is down 5% as reported in the ODT last week. I ask again, what economic growth, extra jobs or real financial benefits has the Stadium brought us? Some say there is more to life than money but our City is carrying record debt. The only way this Council can raise money without borrowing even more is to hammer rates. How much of an increase will it take before the Stadium lovers finally understand what a financial disaster FSB really is?

Bah - humbug

Unfortunately the statistical, theoretical formula used to postulate "economic impact" does not and cannot drill-down to factually state where the money finally end up. For example, the payments for petrol sold to visitors mostly goes to foreign-owned oil companies because there are no NZ owned oil companies and very, very few privately owned petrol stations since a past National Government dropped the law barring foreign oil companies owning retail service stations in NZ. I kid you not! The "profits" on Coca-Cola sold at the stadium flow to a large extent offshore to foreign companies.The profit on much of the food consumed by stadium visitors flows offshore to Australian companys because they own 50% of the supermarkets where the food is sold. And don't forget how much the NZRFU take from test-match ticket sales back out of Dunedin. 

Stadium events

Stevesone57 is correct - there have only been three major concerts, and a 'sprinkling' of tests (and a shed load of other things) take place at FBS in the three years she's been operational. With reference to the major concerts, those from Dunners and those from the lower part of the SI have had a chance to enjoy Elton, Aerosmith, Paul Simon (and there's rockin' Rod Stewart next April)... all since FBS threw her doors open a few short years ago.

And the University's O-week celebrations, which heavily involve performances at the FBS, have gained - from what I can tell - a huge following and positive reputation across the nation. And we've seen things like the Broncos playing the Warriors, some international soccer and a hell of a lot of other bits 'n pieces going on there... all since the FBS threw her doors open a few short years ago.

I've no doubt I've missed plenty of other stuff that's taken place under the bubble-wrap roof, but the point is this: take a look back at just how many things you could have, if you had chosen to, got along to watch. Sure, not everything has suited everyone's tastes. But take a step back and reflect on all those things that have put on performances in our wee city over the past three years. It's gotta be way more than coincidence that the opening of the FBS has paved the way for acts and performances that would not have given Dunners a second glance, to put on their show in our city.  

But sure, I s'pose Stevesone57 is correct... there have only been three major concerts and a sprinkling of international rugby tests held in FBS over the past three years. (Shame on you FBS, for that less-than-exemplary performance. Shame!)

One fine day doesn't make a summer

Sounds very much like the spin is getting so fast, based on spurious assumptions and plucked figures from the hat, it's getting out of proportion.  What a farce.  So, 30,000 rugby heads hit the towns bars in a night or so and those plus the accommodation make a profit and it's all over the news.  What's not mentioned, funny enough; the greater community of ratepayers pay millions to prop the thing up as it haemorrhages far more than what it makes. Cruise ships come in with little capital expenditure, as do the day to day visitors that easily outstrip what this did.  The people that come on cruise ships or by other means to ride the Taieri Gorge Railway are an example, but we don't hear the figures of what that pulls in for the city. It would be far more than the stadium vs. it's expenditure.   

Bogus assumptions

Max it wasn't me who made these assumptions I'm just repeating the assumptions that the story says the study used to make up its bogus number.

My point of course its that the study's assumptions are just that bogus as you say they are.

One offs don't help much

There have been 3 major concerts in 3 years and a sprinkle of Test matches. Next year there will be no Test Matches held at FSB. The City does get full when a big event is on as all other cities do around the country. The other 360 days of the year it is easy to find accommodation in Dunedin. The average occupancy for Motels and Hotels is around 60% per annum, the majority of that occupancy is in the City and George Street area, Motels outside that area have occupancy of much less than that.

The same business flowed into the City during the Carisbrook days so whilst FSB is a great stadium any addtional business it has brought in is negligable. Mr Davies is happy to promote how much money potentially comes to the city during Test Matches but he is far more reticent when it comes to sharing details on profits and losses from events held so far. Mr Davies will not tell us about the $130,000 we lost when DVML underwrote the Newcastle v Sydney match. Try finding out if Aerosmith or Paul Simon made or lost money, all those answers are commercial in confidence according to Mr Davies and DVML.

Feel-good spin is something we have heard from all 3 CEO's and how lucky we are to have the stadium. The flip side is the $20 million per annum in interest payments, the losses on events, the huge blowout in building costs, the undelivered promises of profit that were made when it was built. The hundreds and hundreds of days that it sits empty whilst Dunedin drowns in record rate payer debt.

I don't want to be patronised by Mr Davies, it is clear to anyone who likes or dislikes the stadium that it is a huge financial impost we are unable to afford. Has the Stadium created economic growth? Has it stopped 13 George Street businesses closing since November 2013? Has it brought more residents to Dunedin? Has it created any real additional employment? In the meantime rates will have to increase substantially to pay down the Cities massive debt half of which came from the Stadium being built. I note Mr Davies believes his data is solid? This comes from the same group who said more that two years ago we could grow Dunedin's population, wages and jobs by 10,000 in ten years. More than two years later the progress on that wish list is zero. I am just as confident Mr Davies' data is utterly flawed. Just the same spin we have heard over and over, frankly it's just insulting to rate payers' intelligence.

Assumptions v formula

MikeStk et al is there ever going to be a report that you think is accurate? All statistics/reports have an element of assumptions, however all your assumptions are based on opinion and not a formula - there lies the difference. Of course 17,000 beds don't exist in the city but a huge portion stay with friends and family and still eat out, buy more groceries and if they do drive home the same night they will spend a similar amount on petrol, dining etc anyway.

If you wish to continue these debates based on your assumptions, commission your own report so you can prove once and for all that your assumptions are better than those based on a scientific formula.

And the argument of Hillside? $7,000,000 would pay the wages of those staff and nothing else. It wouldn't create $8m a weekend in to the city.

I very much look forward to the releasing of results from stadium review ... I think you'll be in for a shock! But then, if it doesn't come out in your favour no doubt that report will be filled with 'assumptions' as well.

Assumptions

Mike there are a few assumptions that you have made.

Firstly it does not state that all 17,000 who came from out of the city stayed a night. For example someone from Southland or Central Otago would most probably not stay the night.

Also I am sure that it was not 17,000 individuals that stayed, ie everyone came on their own. There were probably a lot of families of 3,4 or even more. So there would be cases where there would be 3-4 in one hotel room.

You are also assuming that all of the money went to hotel and motel operators. While a portion would have, a significant amount would have been spent in city bars, shops, taxis, rental cars, petrol stations, tourist operators... the flow on effect would reach a wide range of other business too through wages to employees, profits to businesses... a signifcant amount would be invested back into the local economy in one way or another.

Reality check in progress

There is no doubting that an ABs match will bring substantial numbers of visitors to Dunedin and provide a much needed economic boost. That has been proven time and time again at Carisbrook.

And that, Mr Davies, is a fact. I always get the feeling listening to the announcements by DVML and some others that none of them have any historical knowledge of what has happened in this city prior to the construction of the stadium. And because of that they feel that one off or widely spaced events bring in x number of dollars is new.

Mr Davies says ''It delivers significant economic benefit and jobs for the city.'' Most of the economic benefit is lost as the money for it's operational losses has to be found from the same people it is supposedly benefiting. And a few jobs in a brief moment of time is not "significant".

''We are going to get knockers ... but it's real. There's real money being spent.'' And a knocker is anyone who analyses the true cost vs the hype? To quote Guy Hedderwick "Doggedly pursuing a stupid idea will not make it a good idea" and "Never defend the indefensible, it makes you look dumb".

Driving revenue

The trouble is it sucks it back out of the economy even quicker. Can we get the numbers on that - interest included? And that's not what it was built for. The promise was it would make a profit - not for the city, but by itself.

Benefits and costs

''It delivers significant economic benefit and jobs for the city,'' says Mr. Davies. Hillside would have saved 120 skilled jobs for a one-off cash injection of about $7,000,000. Just sayin'.

New economic impact

Hang on a bit, Carisbrook used to net more than that.

Same old, same old

This report seems to suffer from the same sort of ungrounded assumptions that all the previous reports done on rugby games in Dunedin by people from out of town. It's easily seen by the assumption that 17,000 fans spent on average 1.7 nights each in the city. That may seem reasonable to someone from Christchurch (or previously Auckland) - but those of us who actually live in Dunedin know that not only does Dunedin not have 17,000 empty hotel and motel beds available for a rugby test, we don't have 17,000 hotel/motel beds period at any time.

But, let's assume these mythological beds exist and what Mr Davies pretends actually happened ... then great let's levy a hotel/motel guest tax, like cities do around the world, and funnel some of that money, supposedly created by the stadium, to help pay for DVML's losses and pay for the stadium's capital costs, there's no reason why the ratepayers should be paying out their own hard earned cash to subsidise the profits of local hotels, motels, restaurants and bars - let the people actually making the money pay.

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