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.
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.
Tew said the national union had already bailed out the Highlanders, and would not do so again for the Otago union.
However, his "preference" was for the Otago team to compete in this year's ITM Cup.
A final decision would be made at 4pm on Friday, meaning the union had until then if the community wanted to "come together", Graham said.
"Otago has a long and proud rugby history and the union has played a vital role in the rugby community for 131 years so this is a sad day,'' Tew said.
"We fully appreciate how disappointing these events will be for the many people who have worked hard backing rugby in this region. This situation also creates considerable financial pain for many including small and large businesses who make up the union's creditors,'' he said.
Immediate steps being taken included appointing people to run community rugby in the coming week, with NZRU paying their salaries; urgently meeting with clubs to assess their priorities and discuss how 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.''
Otago is one of New Zealand's oldest and most proud provinces. Surely, it cannot be allowed to fail, and we are sure that the rugby community, especially in the south will rally around.
But Otago's failure is indicative of a deeper problem. It's a tough world out there, and commercial revenues are not what they used to be and crowds have dwindled, whilst costs continue to increase. The irony is that Otago now has possibly the best facility in the country, and the crowds will return.
It's terribly sad to hear of Otago's financial demise. We are sure that the local community will come to the party, and we will ourselves be making a contribution once arrangements have been made for donations. We do that because Otago is the thin end of the wedge; if Otago fails, who will be next, and what will that mean for the future of provincial rugby in New Zealand?
We daren't even contemplate the answer to that question.
4 comments:
That's terrible. Hope it isn't the first stage of consolidation of the smaller unions.
Shocking but not really a shock - and yes, who's next.
Provincial unions learn to punch above their weight on the field but can't compete in the boardroom and bank.
Otago (and NZRU) need to work out a sustainable way forward, and if they getb it right that could show the way for other strugglers.
http://yourdunedin.org/2012/02/28/otago-rugby-all-blue-with-no-gold-left
This is sad.
I hope that the people of Otago organise themselves to support the Union.
If the University, F&P, Cadbury's the council and some of the names of Dunedin, like Ian Taylor and Eion Edgar th Farry's all got together they could sort something out.
Otherwise would the last person to leave please turn out the lights.
Otago is ~$2m in debt.
A lousy two mil.
I agree with Mr Hogg, surely the local business community, a community that includes Queenstown, one of the richest towns in NZ, can find two mil while the OFU sort out their business practices which, I suspect, mirror Southland's previous practice of paying ridiculous money to average players without thought to where that money comes from.
The gummint could, of course, finally use some taxpayer money for good by underwriting OFU debt while this process occurs.
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