ORFU is teetering but no bail-out

Wayne Graham
Wayne Graham
The Otago Rugby Football Union is set to post a loss of "several hundred thousand dollars" and admits it cannot pay creditors.

It is calling on the support of the community to get out of a "very serious position", and says a bail-out from the national body is not an option.

ORFU chairman Wayne Graham pulled no punches yesterday in saying the time for smoke and mirrors was over and the union had to show it could still operate as a viable business.

"Otago rugby has to cut its cloth to suit. There is no time for excuses now. This is very serious where we sit today. We are unsure whether the ORFU will be able to trade on," Mr Graham said.

The union, with the help of the New Zealand Rugby Union, has brought in Jeremy Curragh as change manager and he is going through the union's books looking for a way the union can operate profitably.

Mr Curragh said the financial accounts for last year were still with the auditors and he could not say what the final loss figure would be, but acknowledged it would be several hundred thousand dollars.

The negative equity for the union was more than $2 million.

The union was in discussions with sponsors, the bank, and other key stakeholders to draw up a plan to return to profit, and Mr Curragh admitted the union's viability was teetering.

"The position we are in today is not from one sole contributing factor. There have been lots of contributing factors. There are lots of historic decisions which appeared to be correct decisions at the time but have come back to bite us," he said.

"Lots of things have happened which could have been done better and that has resulted in the position we find ourselves in today."

Mr Graham said there were creditors who could not be paid.

The union was in a holding pattern, with nothing being spent. Staff wages were being covered by the NZRU.

He said a tight budget had to be set and funding had to be secured before any money was spent. This situation had not always happened before.

Player wages were set to be cut, but current contracts had to be met.

Mr Graham said he wanted to get full support from the community to help save Otago rugby, and make use of Forsyth Barr Stadium.

"The reality is that we have a brand new $200 million stadium here. Whether it was right or wrong to build it, it is sitting here now. We've got to make this work and Otago rugby has to survive to make it work. That is what we are faced with.

"No-one is going to support us as a union unless we can stand on our own two feet. The days of a bail-out from the NZRU are over."

The NZRU has been forced to help other ailing provincial unions over the years, but this was not an option for Otago, Mr Graham said.

"[For] too long, the union has made losses and just can't afford to fund losses anymore."

Mr Curragh said everybody had to support the union.

"We have still got a fantastic stadium and we do think the support is out there. We have to get this thing back on track and get the support in behind us," he said.

Mr Graham confirmed that part of the $7 million received from the Dunedin City Council for the sale of Carisbrook went to pay a loan for houses owned by the union.

The union had bought houses around Carisbrook years ago as ground expansion was proposed. It formed a trust to own the houses.

When Carisbrook was sold in August 2009, $1 million of the sale price was diverted to the trust to pay off loans on the houses.

Mr Graham said there was nothing untoward in the action and it was normal for the $1 million diverted to the trust to not show up in the union's accounts.

- stephen.hepburn@odt.co.nz

 

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