Eden Park struggles to bridge funding shortfall

Construction work at Eden Park Auckland. Photo / Richard Robinson

Eden Park could generate about $10 million from the sale of corporate boxes, but the value from selling naming rights is less clear.

Sponsorship broker Murray Stott believes the naming rights for the historic sports ground could raise $25 million to $40 million over 20 years. An earlier suggestion of $5 million a year with a big corporate hospitality component appears unlikely.

Auckland ratepayers have been asked to underwrite a $40 million shortfall for the Rugby World Cup upgrade because the park's guardians cannot make a financial contribution towards the $256 million project.

In 2006, the board undertook to raise $65 million for a $320 million design it was then promoting by way of a $17.5 million loan and $47.5 million from sponsorship sales and other sources.

"Eden Park has a sustainable business plan and will not require ongoing operating support or subsidisation from central or local government," Eden Park development committee chairman Rob Fisher said at the time.

Trust board chairman John Waller yesterday said he could not comment on the $65 million contribution because he was not on the board at the time.

He said the reality was that Eden Park was in the construction phase with limited capacity and had still to raise sponsorship and receive grants.

"The banks won't lend because the park can't service it ... we have to generate the income to service the debt. That is why we can't borrow from the banks at the present time."

Over the next three to six months, he said, the board would begin a sponsorship and membership drive. Sponsorship was not actively explored last year because of the recession.

Mr Stott said the recession was no excuse for not selling naming rights to Eden Park. It was a once in a 20-to-30-year opportunity to brand New Zealand's biggest stadium. A bigger problem was the naming rights attached to the ASB Stand.

It was reported in 2006 that the trust board was seeking at least $5 million a year from a naming rights sponsor, including a big hospitality component.

Westpac Stadium chief executive David Gray believed that no New Zealand company would pay $5 million a year for the naming rights for Eden Park. The value of Westpac's naming rights for the Wellington stadium had never been revealed, he said.

New Zealand stadiums have to drop sponsor's names for the World Cup as part of a "clean stadium" condition by the International Rugby Board. Westpac Stadium will be called the Wellington Regional Stadium and AMI Stadium called Stadium Christchurch.

A 2006 document shows the trust board planned to sell new corporate boxes at Eden Park for $150,000 to $200,000. This would earn up to $10 million for the 50 corporate boxes in the new South Stand.

Mr Gray said Westpac Stadium sold its corporate boxes for $200,000 to $250,000 each.

Another stadium manager, who did not want to be named, said it was a tough market at present to be seeking sponsorship and selling season tickets.

The board's sales pitch will not be helped by poor performances from the Blues and Auckland rugby sides, which have contributed to falling crowd numbers at Eden Park.

Auckland City Mayor John Banks, who is meeting other Auckland mayors next week to find a solution to the funding shortfall, said he would not commit Auckland ratepayers to anything unless the board could provide a business plan and budgets to show it could repay and/or finance the loan.

Last year, the Government introduced a new governance structure for the trust board to reflect public ownership. Before that the park was owned and operated by a group of trustees that included representatives from the Auckland Rugby Union and the Auckland Cricket Association.

The new trust board includes five Government appointees, two from the old trust board and one each from the Auckland Rugby Union and Auckland Cricket Association. Mr Waller is paid an annual $18,000 as chairman. Other board members earn $12,000.

Eden Park trust board

* Chairman - John Waller, former PricewaterhouseCoopers partner and Bank of New Zealand chairman.
* Hugh Burrett - former ASB chief executive.
* Michelle Boag - public relations consultant, member of John Banks' Super City mayoral campaign team.
* Morris Pita - lawyer and businessman.
* Derek Dallow - sports lawyer.
* Rob Fisher - lawyer and Auckland Transition Agency consultant.
* Warwick Nicholl - former registrar of Auckland University.
* Greg Muir - former chairman of Hanover Finance.
* Rex Smith - property consultant.