Otago RFU to be liquidated.

thomond2006

The Otago Rugby Football Union (ORFU) will go into liquidation on Friday, it was announced on Monday.

In the red for over NZ$ 2 million (£1.06 million), and having made a loss of $862,000 from the last financial year, the 126-year-old union will not be bailed by the New Zealand Rugby Union as it had hoped.

The Highlanders Super Rugby franchise, which operates as a separate legal entity, will not be affected by Monday's announcement.

Otago has long been recognised as one of the leading five provinces in new Zealand. Only Auckland, Canterbury and Wellington have contributed more All Blacks than Otago.

NZRU chief executive Steve Tew says immediate steps will be taken to safeguard community rugby in the region.

"We fully appreciate how disappointing these events will be for the many people who have worked hard backing rugby in this region," said Tew.

"This situation also creates considerable financial pain for many including small and large businesses who make up the union's creditors.

"Today we are taking immediate steps to safeguard community rugby. We will be:
- appointing people to run community rugby in the coming week and we will be paying those salaries;
- urgently meeting with clubs to assess their priorities and discuss how we best work together 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.

"It is important to also stress that today's events do not impact on the Highlanders franchise which operates as a separate legal entity. Unlike ITM Cup players, Investec Super Rugby players are contracted by the NZRU and not by a union.

"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.

"We appreciate the collective efforts of many to reach a solution including the current board and major creditors.

"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.

"The Otago RFU was a sovereign legal entity, like all unions, managing its own affairs. A number of attempts were made to recover the situation. We will now discuss with all interested parties the way forward from here in terms of future arrangements for delivering rugby across the region.

"There are many factors that contributed to today's events. Our focus now is not on apportioning blame, but on ensuring that what matters most to fans and players - rugby - continues to flourish in this proud province."

http://www.planetrugby.com/story/0,25883,16024_7550933,00.html

CatFromHue

It's not a huge surprise this has come about. I remember reading, in the summer I think, that they were in a fair bit of financial difficulty. So much so that they'd let so many people go that they were reduced to a skeleton staff and I think they'd even started selling training gear!

The new stadium in Dunedin, where Ireland played Italy on the RWC, is in Otago so I wonder what will happen to that regarding running costs etc.

A wider issue is that the ITM Cup crowds tend to be pretty small and another poster on here mentioned they may be looking at making ITM Cup teams semi pro. The ITM Cup teams are the level below Super rugby teams but are very good all the same. The results against the 2005 Lions show this:

Bay of Plenty 20 34 Lions
Taranaki 14 36 Lions
Wellington 6 23 Lions
Otago 19 30 Lions
Southland 16 26 Lions
Manawatu 6 109 Lions
Auckland 13 17 Lions

irishbucsfan

I don't think there are actually that many Super Rugby players left at Otago, so I don't think we will really notice this unless there are some big ITM fans around!

matthew8

Not surprising, no one goes to the games. They would envy the crowds Belvedere get. Such a shame though with the quality in the ITM cup.

PhatPiggins

matthew8 wrote: »

Not surprising, no one goes to the games. They would envy the crowds Belvedere get. Such a shame though with the quality in the ITM cup.

Quality new stadium as well.

On the plus side thats Connachts recruiting programme for next season sorted. I hope Naoupu has plenty of spare rooms !

PhatPiggins

CatFromHue wrote: »

It's not a huge surprise this has come about. I remember reading, in the summer I think, that they were in a fair bit of financial difficulty. So much so that they'd let so many people go that they were reduced to a skeleton staff and I think they'd even started selling training gear!

The new stadium in Dunedin, where Ireland played Italy on the RWC, is in Otago so I wonder what will happen to that regarding running costs etc.

A wider issue is that the ITM Cup crowds tend to be pretty small and another poster on here mentioned they may be looking at making ITM Cup teams semi pro. The ITM Cup teams are the level below Super rugby teams but are very good all the same. The results against the 2005 Lions show this:

Bay of Plenty 20 34 Lions
Taranaki 14 36 Lions
Wellington 6 23 Lions
Otago 19 30 Lions
Southland 16 26 Lions
Manawatu 6 109 Lions
Auckland 13 17 Lions

Super Rugby has killed the NPC/ITM Cup. The new conferencing system means they're playing each other a huge amount of times, the idea of less is more means nothing in NZ/Aus.

When I lived in NZ Wellington vs Canterbury in the NPC was life or death now they play each other 6 times a season. I honestly think Super Rugby in NZ is going down the same track of public apathy.

sock puppet

PhatPiggins wrote: »

Super Rugby has killed the NPC/ITM Cup. The new conferencing system means they're playing each other a huge amount of times, the idea of less is more means nothing in NZ/Aus.

When I lived in NZ Wellington vs Canterbury in the NPC was life or death now they play each other 6 times a season. I honestly think Super Rugby in NZ is going down the same track of public apathy.

They should just admit a couple of Argentinian teams, make Super Rugby a proper league and be done with it. It'd be bad for South Africa though.

CatFromHue

Otago crisis casts cloud over Dunedin stadium

The state-of-the-art Forsyth Barr Stadium could become a white elephant as Otago Rugby teeters under the weight of its financial crisis.

The Otago Rugby Union will apply to enter liquidation on Friday afternoon if its debt crisis can't be resolved, having unveiled a loss of $862,000 at yesterday's annual meeting.

With debts having escalated to $2.35 million, chairman Wayne Graham said the union couldn't operate.

The NZRU has said it will support community rugby in Otago but the future of the ITM Cup team is in serious doubt.

Even if a team could be fielded this year courtesy of fresh financial support, Graham said there would be question marks over where they could play.

They were in the dark about the cost of playing games at the $200 million Forsyth Barr Stadium which was built to primarily host games during last year's World Cup.

"The distressing thing now is, how are we going to afford to play in it?" Graham told Radio Sport today.

"Nobody really knows. A lot of these things were put in place but nobody's done a feasibility study to see if it is sustainable.

"As the Otago Union, we're looking at the stadium and saying we can't afford to be there."

Graham said the sale of Carisbrook in 2009, it's timing and construction of the new stadium had been a constant source of debate in Dunedin.

Previous administrations had borrowed $8.2 million against Carisbrook and it was sold for about $1.2 million less than that, Graham said.

"A big portion of it (debt) is from the sale. It's what our board inherited and it's compounded since then.

"People will argue we got a good price for it. Others will say it shouldn't have been sold. Others have questioned the new stadium.

"It's a series of decision which, in hindsight, definitely weren't the best.

"Unless we've got a dollar in the bank, there's no way this union will be spending after what we've been through."

Graham didn't want to point fingers at who was to blame for one of the country's oldest and proudest rugby unions having the pin pulled on it.

''The position got to a stage where we had to draw a line in the sand, and that if by 4pm Friday - unless the current situation can be resolved by all the parties involved - we have no option but to apply for liquidation from the High Court,'' Graham said.

http://www.stuff.co.nz/sport/rugby/provincial/6489057/Otago-crisis-casts-cloud-over-Dunedin-stadium

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Interesting reading and certainly one to keep in mind regarding any possible RWC here in Ireland.