ORFU to be put into liquidation

Steve Tew
Steve Tew
The Otago Rugby Football Union will go into liquidation on Friday.

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 are affected.

"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 entity.

"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 proud province.

- with APNZ

 

NZRU to blame

The model the NZRU has put in place is to blame.The reality is that Otago will be the first of many Unions to go down this path if the NZRU doesn't make changes.

For me these numbers paint a picture.

In 2011 an NRL side had 12 home games.

An A League Soccer side had 12/13 home games.

An NBL Basketball side had 12/13 home games.

The Higlanders had 8-9.

And the Otago rugby side had 7-8.

How could the ORFU possibly be expected to employ adequate administration staff, coaches, and players with the amount of money that such a short compitition would generate? 

Solution: expand super rugby into a larger competition, and turn the NPC into an amateur competition.

 

Get rid of the Highlanders

Otago and Dunedin in particular have a far too small population base to support two first grade teams. The Highlanders are not representative of Otago what so ever. This can be seen by the very few local players in the team,
3 Otago and 30 from other provinces.
Just cut them loose. The financial rewards will then be directed to Otago Rugby only.

The ORFU should of done this

The ORFU should have done this a year or two ago - put the opportunity for certain high net worth entities around Dunedin or NZ who have done well from Otago to take a stake in the union.  Sure it wouldn't be an amazing investment but maybe it's time to give something back.  Certain personalities have launched their careers out of Dunedin and Otago rugby, maybe time to bail out the union.

Not a cent more

russandbev: I'm sure they meant that the rugby community would bail them out - it will be interesting to see, because if the ORFU can raise $2m-plus in time by passing the hat around town then they'll also be proving to us that they can raise the private finacing for the stadium that they promised by doing the same thing and trying a little harder.

Other than that I completely agree. Not a cent more from the public purse to rugby - they've shown us that they can't manage their own money. Why should we trust them to use ours wisely?

To the Dunedin City Council

To the Dunedin City Council - Don't even think of allowing one more cent of ratepayers money go to these people, either directly or through DMVL.  Enough is enough! [Abridged]

Who's on the hook?

So the DCC agreed to guarantee the ORFU's loans a while back as they didn't have the equity of Carisbrook to back them any more - is the city still on the hook for that? Or was it the removal of that guarantee maybe what triggered this default?

If so, the ORFU management must have seen this coming a mile away.

The smart thing to have done would have been to have kept the Carisbrook asset viable, cleaned up the rest of their act and avoided this demise. By pushing for a new stadium they have in effect dug their own grave.

The NZRFU

The NZRFU is as much to blame here as the ORFU.

Many years ago the pressure on Otago rugby to take out huge loans for new stands at Carisbrook came from the NZRFU, and Tew and his cohorts put that pressure on. Those loans have been a millstone around the unions neck for 15 or more years.

Tew has no loyalty towards the ORFU and has always threatened to take tests away from Dunedin, as reported by this very paper. The NZRFU lack of support here is a direct indication of Tews attitude towards Otago. When times are tough you remember who stands beside you.

The communitiy answer

Here it is.

We have been bailing you out for years through behind the scenes deals with Delta and direct deals with the DCC.  We have built you a new stadium which has put the City into insolvency, or near enough to it not to matter.

It is time for you to go away, but before you do, I want you to pay back the community what you owe.  I hope that the amateur clubs rise up and form a new Union that has nothing whatsoever to do with professional rugby.

Lastly, it is time for all those wealthy directors of yours to start contributing to the $45m shortfall labelled "private funding".  Forget any "community" bailout.  You are gone.

Don't even think it

No mayor or city councillor in their right mind would press the already rates-oppressed Dunedin public to "come together" on this one, as Graham puts it.

If there is a rugby community, let them own this situation and make up the difference. Perhaps "rugby gal" could have a bake sale?