The Otago Rugby Football Union is budgeting for a small profit this year and is keeping tabs on every penny.
The union revealed yesterday its audited loss had been finalised for the 2011 year and was $862,216.
That meant the negative equity for the union was at $2,250,653, which was an accumulation of the union's losses over the past years.
The ORFU considered going into liquidation early last month but a rescue package was cobbled together to keep the union in business.
Change manager Jeremy Curragh said the 2011 loss was caused by a substantial drop in revenue, of more than a third.
Revenue was down in gates, sponsorship and trust funding.
"There was not one big loss-maker where you could point your finger and blame. But the professional side of the operation contributed to the majority of the loss," Curragh said.
He estimated the professional game contributed more than 80% of the loss.
"The amateur side of the game broke even or thereabouts."
The union also cut costs but not to the same extent as revenue went down.
Curragh said it was hard to compare the 2010 year with 2011, as in the latter year the union had sold Carisbrook and did not bear the costs of running a ground.
In 2010, the union had revenue of $5.6 million.
The following year that dropped to $3.6 million.
Expenditure in 2010 was $5.95 million and this had dropped to $4.45 million in 2011.
He said it was too simplistic to say the large loss was caused by the union paying players too much.
"What it does say is we have to look very closely at how we run the professional side of the game. It is not simply about player costs. It is about increasing sponsorship, and looking at all ways to get the costs of running the A team down.
"Some players have moved on, which has helped in some way to cut the costs."
He confirmed a small profit had been budgeted for this year but declined to say how much it was.
Originally, the predicted outcome for this year was a loss of more than $750,000 but cost-cutting, and deals with other parties, had changed that to a small profit.
"We want to grow our revenue. We want to have increased sponsorship. But we want to get the union to a sustainable financial level.
"We have to be sensible, though. The union is not going to generate increased sponsorship by 200% in the next 12 months.
"We're not going to budget that way. We have budgeted incredibly conservatively.
"Every last penny has been accounted for. Staff have budgets which they know have to be met. There is no fat in the system."
The union was now down to having just eight employees.
Just over five years ago it employed 36 staff, although it also was running the Highlanders.
Curragh said the staff had been extremely hard-working in trying times. Referee education officer Todd Pullar is the latest to leave the union.
The financial statements for last year will be presented to a special general meeting of the union on May 1.
This meeting would vote in a new constitution and select a couple of representatives to sit on a panel to select new board members.
Curragh, who was seconded by the New Zealand Rugby Union to the change manager role in early January, said an interim general manager would be appointed next month to take over his role.
A permanent general manager will be appointed when the new board is formed.
