Otago Rugby Union to be Liquidated

[FiveStarStu]

For those of you who miss the Super 14, you might not have long to wait.

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

The decision was announced at a press conference in Dunedin tonight.​

The 126-year-old Union was due to report a loss of several hundred thousand dollars at its annual meeting in Dunedin today.​

Newstalk ZB has reported that the current board is being dissolved tonight.​

New Zealand Rugby Union chief executive Steve Tew and ORFU chairman Wayne Graham were at tonight's press conference.​

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.​

Tragic news for Otago.

EDIT: The Highlanders are apparently no longer affiliated with the ORFU. This means that I have no idea what this means.

 

[Roundawhile]

Thats not good. 126 years is a long time for a club to be running, its a shame they couldn't somehow save it.

Rugby will be the loser.

 

[PaarlBok]

Kings can play in their place.

 

[TOCC]

Pb, he just said that the highlanders are no longer associated... Meaning this shouldn't impact on the day to day running of the Highlanders..

Not sure what/if any provision of grants is in place between the two, but the highlanders won't fold..

 

[Karl]

So what does this mean for Rugby in NZ really? And why have they folded? Is it just bad management? It seems hard to understand how a 126 year old club folds in a country as Rugby mad as NZ.

 

[MajorlyRagerly]

Does seem at odds with their brand new stadium doewn there doesn't it....

Shame, Otago rugby was at one point the base of which all NZ rugby was built around.

 

[FrankLind]

http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=10788454

 

[rugbysmartarse]

Sad news, especially for kids in the region.

 

[SteveMerrick]

So what does this mean for Rugby in NZ really? And why have they folded? Is it just bad management? It seems hard to understand how a 126 year old club folds in a country as Rugby mad as NZ.

Can we clarify something here - The Otago Rugby Football Union is nor has it ever been a "Rugby Club" it was the administrative Union for the province of Otago - hence the Otago representative side, just as the Queensland Rugby Union or the NSW Rugby Union are not clubs... it seems the advent of Super Rugby has seen supporters forget a significant portion of the actual history of the game - just as the Waratahs no longer really represent NSW rugby but are being fashioned as rugby brand that borrows heavily from the past history of a truly representative side being NSW - that people can claim a replacement who receives 5 mins at the end of a Super Rugby game is the equivalent in terms of NSW appearances to someone who played a full game for NSW vs. an international touring side is really beyond me.

My 2 cents worth anyway

 

[Sully]

merged the 2 otago threads. sad news to see such an old union folding.

 

[TOCC]

Does seem at odds with their brand new stadium doewn there doesn't it....

Shame, Otago rugby was at one point the base of which all NZ rugby was built around.

Maybe if the new stadium was built a couple of years ago they may have benefited from larger crowd numbers and higher corporate support.

 

[Bon]

Of course this is just the start of the rot. Other provinces will fall like a house of cards resulting in a flood of players emigrating to Australia and Samoa. Until finally there is only one province and super team left in NZ. Auckland.

 

[spooony]

From the start of the Super Rugby competition in 1996, Otago was one of three unions (along with Southland and North Otago) to comprise the Highlanders region, and Otago players traditionally formed the bulk of the Highlanders' playing squad.

This changed in 2010 with the move to direct-contracting for Super Rugby teams, meaning that Otago players are free to sign with any of the New Zealand-based teams. Despite this change, in the 2011 Super Rugby season all Otago players competing in the competition were still playing for the Highlanders. However, due to the recent struggles of Otago and an influx of players from other provinces, Otago players no longer represent the majority of the Highlanders' playing personnel.
http://en.wikipedia.org/wiki/Otago_Rugby_Football_Union

ORFU to be put into liquidation

 

[Karl]

OK - so the ORFU is like the QRU? Its not a Club (check), but the QRU and the REDS are not in a similar arrangement to the Highlanders and the ORFU.

Clear as mud.

How does this impact the Clubs and Rugby in NZ? This still isn't very clear.

And maybe the ORFU can come out of liquidation and continue to operate? Someone could buy the assets at a knockdown and keep it rolling?

 

[spooony]

OK - so the ORFU is like the QRU? Its not a Club (check), but the QRU and the REDS are not in a similar arrangement to the Highlanders and the ORFU.

Clear as mud.

How does this impact the Clubs and Rugby in NZ? This still isn't very clear.

And maybe the ORFU can come out of liquidation and continue to operate? Someone could buy the assets at a knockdown and keep it rolling?

Yeah. Dunno what the arrangements in NZ are but in football you get docked points and they sell whatever they can to get the debt payed off and then someone new runs the club but they normally do exist after that. Luckily the debt is only 2 million

 

[suckerforred]

Yeah. Dunno what the arrangements in NZ are but in football you get docked points and they sell whatever they can to get the debt payed off and then someone new runs the club but they normally do exist after that. Luckily the debt is only 2 million

Ahh the negative equity is $2M. This means that on their balance sheet their liabilities are $2M more then their Assets. Now I say "on their balance sheet" as we really don't know how their assets or liabilities are valued, therefore we are not going to know how much of the liabilities (including debts) will be covered by the sale of the assets. It will be expected that the assets will be sold at 'knock down' price therefore this gap could be expected to grow.

Bit of a problem for NZRU as a community I would expect. Did ORFU build / own the new stadium?

 

[MrTimms]

Did ORFU build / own the new stadium?

It was built by the Dunedin council. Not sure if the ORFU had a stake but I don't think so.

 

[suckerforred]

It was built by the Dunedin council. Not sure if the ORFU had a stake but I don't think so.

I didn't think they did. But like you was unsure. Would have been interesting if they had entered into it if they have been showing a loss for a number of years. Very poor business decision if that is the case.

 

[Bardon]

First off let me say that I'm not one to believe that purely because something has been around for 126 years is a good enough reason to keep it around.

However if that institution is still relevant and important in the area steps should be taken to keep it going whether it's 126 years or 126 days old. The fact that it's been so badly mismanaged is a disgrace. If it didn't have a stake in the new stadium what were it's major outgoings that put it in such a bad position? It mustn't have had any major income streams to be able to lose so much money each year.

Without knowing more facts it would seem that in the modern era the Union became the vehicle that obsorbed many of the costs/losses with regard to rugby in the region while the profits went elsewhere, presumably to the S15 franchise.

Sadly I don't think it will be the last story like this we hear over the next few years.

 

[Karl]

Maybe the Dunedin or Otago Council (don't know how its set up) could bail them out with some funding from a communities based grant scheme with some help from other arms of government? There is often funding from Government available for the operation of sporting clubs and associations because of the benefits they provide in local communities. Or maybe the hole is too deep, but a supported restructure might have been an option if it can shed the debt on some basis and keep trading under new management. Once liquidators get into it, its usually all over though.