This today from the NZ Herald: The Otago Rugby Football Union is to be liquidated, with the union facing a massive loss after years of poor financial results. The New Zealand Rugby Union (NZRU) has decided enough is enough, and will not bail the union out.
This puts rugby in a somewhat uncertain state in the deep South. Not too long ago the Southland union needed NZRU assistance with meeting financial shortfalls, and now Otago is to cease trading. Let's not mention the Christchurch temporary stadium arrangement - it's been an unfortunate sequence of events for southern rugby.
This has implications for the recently built Forsyth Barr Stadium in Dunedin. Sure, the Highlanders Super Rugby franchise will continue to play there (the ORFU is a separate entity to the Highlanders), but they were counting on an Otago NPC/ITM Cup team playing to fill in some dates and draw in some crowds to make the economic impact figures stack up. Admittedly nobody saw this coming, but it does make things even tougher on the Stadium to break even. Longer term, if there is no Otago ITM Cup team, does this mean that the Highlanders franchise might be 'up for grabs' with only the Southland union playing? Taranaki were known to be keen on a Super franchise - does the growing uncertainty in Otago open the door?
Some have wondered whether sports are recession-proof - here's a little bit of evidence that our national game, alongside many Australasian sports leagues including the A-League, the NBL, and even the NRL if you go back to the late 1990's with expansion and then the Super League war and contraction - is just as susceptible as any business in a period of downturn. A rugby fan hopes that this is an isolated incident, but an economist wonders whether it is merely the tip of the iceberg. Teams generally don't make profits - if they do, they tend to be small. Ironically, this might have been the ORFU's best chance at recouping some of their losses, with a likely increase in attendances in the form of the new stadium's honeymoon effect, where people come along to see the new facility as much as the game. Unfortunately they don't appear likely to get that chance.