Dark days for Otago rugby

Hindsight and a hard-headed perspective suggests it should not have been, but despite the rumblings, the incremental revelations, the headlines and the persistent, worrisome grind of the rumour mill, the impending extinction of the Otago Rugby Football Union (ORFU) came as a surprise to many.

Unless someone, or a group of benefactors, steps forward before Friday - or perhaps afterwards - the union as it is known, and has been loved by many for 131 years, will cease to exist, liquidated with debts of $2.35 million.

The shockwaves will reverberate throughout not only the province, but the entire country: many in the rugby establishment have historical or emotional links with the union; but also because the imminent collapse of one of the great, proud New Zealand rugby entities raises the spectre of the domino effect. If the ORFU is neither too big, too valuable nor too geographically significant to fail, what does that say about the future of other cash-strapped unions around the country?

How did it come to this?

That $2.35 million question will take some untangling. It is easy to conclude management and governance over the past two decades have been woefully inadequate to the task of shepherding amateur rugby into the professional age.

Obviously, many decisions were made that were incorrect. But that in itself is simplistic. Which management team, what board, which particular decisions?

One factor, though, that is bound to feature in any final accounting is the complex role on the finances of the union played by Carisbrook. It seems, both in its annual operating costs, in its depreciating value as real estate and in the management of debt involving the ground, the House of Pain, finally an albatross around the neck of the union, strangled the financial life out of it.

The monies received for its sale did not cover the union's liabilities.

This does not, nor can it, obscure the fact the union has long been living beyond its means. Last year, it posted a loss of $862,000. Already this year the New Zealand Rugby Union had given it $200,000 in an attempt to deliver it some clear air.

This was in addition to the $900,000 the NZRU annually puts into the ORFU to support rugby at all levels across the region. In short, the business model did not stack up. The premier representative side's heyday seemed to be well behind it; its ability to attract crowds, and thus gate-takings, had radically diminished; and its capacity to lure and keep top-level players had become constrained.

These factors will have to be addressed in any future reconfiguration. Three years ago the NZRU mooted a reduction of the top-tier of provincial rugby teams to 10, rather than the current 14; Otago may have to live with a future as an amateur union playing in a regionally-focused "second division". These considerations aside, the union's woes will have implications for other parties, not least the numerous Otago businesses owed money by it. There is the potential for a serious undermining of the Forsyth Barr Stadium's business plan, owing to private sector funding, sponsorship and season ticket sales being partly contingent upon having an Otago team in the ITM Cup, an eventuality that is now in some doubt. The Dunedin City Council says it has lost in the region of $400,000 which, rightly, will infuriate those ratepayers who have long complained that an alliance between the council and rugby is diverting funds from more apposite alternatives and exerting upward pressure on rates.

Today, top rugby is, as ORFU chairman Wayne Graham put it on Monday night, "a business". Businesses fail. Sports clubs and franchises fail. Ask fans of the ultra-successful Scottish football club Glasgow Rangers or any number of other clubs and franchises in leagues around the world. As to the future, there is precedent on which supporters might base their hopes: the Wellington Phoenix arose out of a pile of debt-scorched ashes last year; the Otago Nuggets have returned to the national basketball league, courtesy of sponsors Oceania Gold; and, across the ditch, South Sydney is back on the footy field, albeit with a much-changed ownership structure. Whatever happens, however, blind faith and an eyes-wide-shut approach to rugby's money management will have no part in the game's future.


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