Eden Park in major financial trouble with All Black tests at risk

Author
NZ Herald,
Section
National,
Publish Date
Thursday, 10 January 2019, 7:19a.m.
Eden Park is in big financial trouble and could run up losses of $80 million over the next decade, says a report commissioned by Auckland Council.
Eden Park is in big financial trouble and could run up losses of $80 million over the next decade, says a report commissioned by Auckland Council.

Auckland's Eden Park is facing an uncertain future as mounting financial pressures put at risk its ability to host All Black tests and other major events.

The situation is so bad a senior council source told the Herald that Eden Park is referred to internally as being "bankrupt".

A report by consultants EY paints a bleak financial outlook for the city's major stadium, saying revenue is falling and there is no money for new turf, floodlights and big video screens needed for big occasions.

This year's Rugby World Cup in Japan, resulting in the loss of one of two lucrative All Black tests, only two of the usual four cricket internationals and other revenue challenges mean the park's guardians will not have enough money to pay interest costs of about $1.5m this year, said the consultants.

What's more, EY said Eden Park's cash flow is not expected to improve over the two following years to meet interest payments on loans of about $47m to ASB Bank.

Other problems plaguing the park have been the poor performance of the Blues rugby franchise, falling membership numbers, corporate boxes not being renewed and restrictions on evening events and concerts at Eden Park, the report said.

The report into the Eden Park Trust 's financial position was commissioned by Auckland Council last September and delivered to council a month later. Councillors were provided with a copy of the report at a confidential meeting in December.

Mayor Phil Goff said the financial position of Eden Park is serious.

For several years, Eden Park has kept its head above water by being able to pay interest on its loans but not being able to put any money aside for future work - known as depreciation costs - which has led to deficits of between $4.5m and $8m.

EY said this meant a 10-year, $62.8m maintenance plan has no funding for things like new floodlights ($5.6m), turf ($3.5m), north, west and south stand maintenance ($12.2m) and super screens ($6m).

Over the next decade, the park could run up further losses of $80m, EY said.

Mayor Phil Goff says Eden Park's troubles will not bring forward work on a downtown stadium.
Mayor Phil Goff says Eden Park's troubles will not bring forward work on a downtown stadium.

Goff said this financial year Eden Park will have a deficit of about $6.8m.

On top of interest costs, the trust cannot pay back a $6.5m debt to council or a $40m bank loan used to complete the upgrade for the 2011 Rugby World Cup, which the council has guaranteed, he said.

The mayor said the board has been invited to appear before councillors early this year to see what, if anything, council can do.

"Eden Park is an important sporting venue in Auckland, but I don't think ratepayers will want council to hand over millions and millions of ratepayer dollars to Eden Park without resolving the underlying issues," Goff said.

"Eden Park is not owned by Auckland Council. It is owned by the Eden Park Trust whose directors are appointed by the Government, Auckland Cricket and Auckland Rugby - the latter two also being the beneficiaries of the trust," Goff said.

It is understood there is an impasse between council and the trust board, with the board seeking a bailout from council or the Government, and council seeking changes to the current model.

Asked if Eden Park's financial woes would bring forward plans for a downtown stadium, Goff said no.

Whether and where a national stadium is built will depend on the availability of funding and at present council's investment is focused, for obvious reasons, on transport and housing, he said.

Eden Park Trust chairman Doug McKay.
Eden Park Trust chairman Doug McKay.

An Eden Park spokeswoman said trust chairman Doug McKay and chief executive Nick Sautner were currently not available for comment.

Grant Robertson, who holds the finance and sport portfolios, could not be reached for comment, but is understood to be wary about spending taxpayers money on stadiums.

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