Editorial: Costly grandstanding

What prompts the Tainui investors to pay $7 million to put the tribe's name on Hamilton's refurbished rugby stadium? What business is it, the investors might reply, of anybody but their own people? When the Crown paid more than $170 million to the Tainui Trust Board in compensation for land confiscated in and after the Waikato wars, the money was Tainui's to use as they saw fit.

So it is, but there remains a very good reason for the wider community to take a close interest in the investments arising from any treaty settlement. Unless tribes can maintain the capital and generate widespread wealth for their beneficiaries, there is practically no prospect that settlements will be "full and final," as Governments (though not claimants) like to say. The more of Tainui's fund that is spent for little return, the more likely the next generation will find itself relitigating the tribe's grievances.

The sponsorship of "Tainui Stadium," along with the purchase of the Auckland Warriors rugby league franchise, raises the concern that sentiment may be overriding commercial considerations. Naming rights at sports grounds are prized for the exposure they give a brand, whether of a bank, a range of computer software or a cellphone company. There are probably several trading interests of Tainui that could derive a measurable return from having their brand adorn the new Hamilton venue. But unless Tainui are putting that name on their products, it is hard to see much financial return for placing it atop a grandstand.

The benefits cited by Tainui's investment arm, MDC Investment Holdings Ltd, are dubious at best. They say the stadium will boost the tribe's profile overseas, but to what commercial purpose? They point out that the deal includes a corporate box - which they could have leased for 50 years at a fraction of the bill for naming rights and quit if it

did not prove its worth. This deal locks them in for the life of the stadium.

Then they cite jobs. There is an undertaking that 20 per cent of the stadium staff will be Tainui. Quite apart from any irregularity of that arrangement under employment law, it is not the way real jobs are created. Reliable employment is generated by profitable investment.

The most likely explanation for the stadium contribution is not economic at all, it is probably a matter of pride. Tainui is a fine name for Waikato's rugby stadium and it will provide a sense of identity and ownership for the tribe. If the naming rights were the only indulgence for those purposes, there would be little cause for concern. But it comes too soon for comfort after the Warriors purchase, though MDC Investments insists it did not draw on the $170 million crown settlement for that venture. Yet earnings from investments of the settlement funds were going to be devoted to education scholarships and the like.

Tainui's investment decisions have been much criticised inside as well as outside the tribe, not always fairly. Hotels and a prospective casino could prove capable of generating the profits that can sustain tribal wealth. But nobody's welfare, or pride, is served in the long run by projects that simply run down the fund. Let's hope that Tainui Stadium does not become a monument to lost opportunity.