The Otago Rugby Football Union will go into liquidation
The decision was announced at a press conference in Dunedin
tonight attended by New Zealand Rugby Union chief executive
Steve Tew and ORFU chairman Wayne Graham.
Tew said there was no way out for the ORFU, which had been
saddled with negative equity of more than $2 million and was
due to report another large loss.
He said the national union
had already bailed out the Highlanders, and it would not bail
out the Otago union as well.
However, his "preference" was for the Otago team to compete
in this year's ITM Cup.
A final decision would be made at 4pm on Friday, meaning the
union had until then if the community wanted to "come
together", Graham said.
"Otago has a long and proud rugby history and the union has
played a vital role in the rugby community for 131 years so
this is a sad day,'' Tew said.
"We fully appreciate how disappointing these events will be
for the many people who have worked hard backing rugby in
this region. This situation also creates considerable
financial pain for many including small and large businesses
who make up the union's creditors,'' he said.
Immediate steps being taken included appointing people to run
community rugby in the coming week, with NZRU paying their
salaries; urgently meeting with clubs to assess their
priorities and discuss how to maintain and grow community
rugby; and talking to all contracted players and others who
"The NZRU has consistently funded the Otago RFU by around
$900,000 a year which is used to support rugby across all
levels and we remain committed to rugby in this region.
"In addition, we will be immediately assessing the viability
of entering an ITM Cup team from the region in the 2012
competition. This will need to be self-funding beyond the
normal NZRU contribution if any plan is to be viable. We will
be urgently discussing this with players and potential
sponsors to see if we can achieve this.''
Tew stressed that today's events did not impact on the
Highlanders franchise which operated as a separate legal
"The situation at Otago is unprecedented in our history. We
have been working hard to avoid this outcome. That is why
NZRU appointed a specialist late last year to develop a
recovery plan and negotiate with affected parties and also
why we provided interim finance to ORFU of $200,000 over the
last two months,'' he said.
"We were all prepared to help, but in the end, the financial
hole was just too big. The union had debts of $2.35 million
and was facing a significant shortfall in revenue this year.
Quite simply, it has run out of money and could not trade out
of its difficulties.''
Tew said many factors contributed to today's events but the
focus was now on ensuring rugby continued to flourish in a
- with APNZ