Rowing: $2.2m World Champs loss blamed on organisers

The rowing world championships in Lake Karapiro last year lost more than $2m. Photo / Daily Post

Organisers of last year's rowing world championships in New Zealand were the cause of the event losing $2.2 million, a damning Government report has found.

Funding agency Sparc has pulled no punches, saying there were shortcomings in governance and inadequate financial management while event management lacked commercial acumen and discipline.

Sparc issued its report today and the findings of the independent review of the championships held at Lake Karapiro in Waikato laid the blame for the financial losses squarely at the feet of the event organisers.

The championships were expected to record a surplus of $500,000, but instead recorded a loss of $2.2m, forcing Rowing New Zealand (RNZ) to seek loans, both from its bank and from the Government, to meet its obligations to creditors.

In February, the Government agreed to loan RNZ $1.3m, and as a condition of that loan, required an independent review of the event, commissioned by Sparc.

The review has found that there were a number of factors which contributed to the loss, mostly relating to shortcomings in governance, inadequate financial management, and less revenue than expected from ticket sales.

Sparc chief executive Peter Miskimmin said the review was a stark reminder for those involved in hosting major events in New Zealand, including the Government agencies which invest in them.

"Running events is a complex and risky business, and those who take on the responsibility of hosting them must be careful and accountable," he said.

"Running a major event requires specific skills and expertise around event management. That must be reflected in the governance and management that's put in place, and the investment oversight."

The review found there was lack of clarity around roles and responsibilities of the Karapiro 2010 board, its financial monitoring was poor, and its reporting to RNZ was poor.

It said while the event management had strong organisational skills, it lacked commercial acumen and discipline, and appropriate financial scrutiny and financial reporting.

While ticket sales did fall well below what was expected, the review said the sales forecasts were flawed, because of the way management interpreted and used information they received from market researchers.

"The Karapiro 2010 board was committed to putting on a world-class event, and they achieved that."

Miskimmin said operationally the event was a huge success. "But the review tells us they were living beyond their means," he said.

"The key stakeholders in the event, including the board, have all proactively engaged and had input into this review, and have provided considerable feedback throughout the process."

Miskimmin said the findings of the review would be used to develop additional good practice guidelines for those running future major events, in particular around governance, financial management and ticketing strategies.

Miskimmin said that throughout the process, Sparc had worked closely with RNZ to ensure the event's financial problems did not disrupt the New Zealand team's preparations for the London 2012 Olympics.

"It's been a priority to ensure this doesn't impact rowing's high performance programme. That funding is not affected by this."

- NZPA