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Home / Sport / Rugby / Rugby World Cup

How rugby chiefs dropped the ball

7 Aug, 2002 11:36 PM12 mins to read

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By EUGENE BINGHAM

Seasoned lawyer Tim Gresson had just finished putting his case for New Zealand when the bomb went off.

A Crown prosecutor used to the cut and thrust of the South Island criminal courts, Gresson was acting in his other role as one of two New Zealand representatives on the International Rugby Board.

At the board's Dublin headquarters on April 16, Gresson had the tough assignment of arguing New Zealand should be retained as sub-host for the Rugby World Cup 2003.

His address drew on New Zealand's strength as a rugby nation, reminding the councillors that it was the only country in the world where the oval ball game was No 1. He submitted that axing New Zealand would be a punishment out of proportion to any crime committed.

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Like any good lawyer, Gresson had a star witness - Murray McCaw, the New Zealand Rugby Football Union chairman.

McCaw, Gresson told the blazer-wearing councillors, had met IRB chairman Vernon Pugh on November 11 last year and won an assurance of a "pragmatic solution" to the corporate box problem.

After outlining a follow-up two-page memo McCaw had sent to Pugh setting out the key concession, Gresson wrapped up his speech and crossed his fingers.

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Then the blast hit.

Pugh told the councillors he wanted to correct Gresson's last statement. He began referring to an email sent to McCaw in response to his memo.

The November 18 email made it plain by demanding clean venues that the box issue was still alive. Under the heading "Boxes", Pugh had written: "Clean venues, including stadia and environs, is a fundamental term of the [agreement.]"

Gresson reeled, his case undermined by his star witness: this was the first Gresson knew of the email's existence. McCaw had overlooked it all these months.

New Zealand, once the powerhouse of world rugby, had been humiliated before the IRB.

How could it have come to this?

The sad truth, as catalogued in forensic detail by this week's Eichelbaum report, is that the guardians of our national sport executed stumbles, blunders and blatant miscalculations even before the Dublin saga.

Perhaps the biggest of these was their inability to read the public mood. The report reveals how the board became ho-hum about New Zealand's involvement in the cup as much as 12 months ago. Misjudging the price they would pay in public ill-will if the country did not play host to any World Cup games, the board began to consider baling out when it seemed the tournament was going to hit their bottom line.

A source close to the board conceded there had been a failure to take into account the value of the country's emotional attachment to rugby. "What price do you put on that?" said the source. "They have certainly had a huge wake-up call."

Reading through the independent report by Sir Thomas Eichelbaum, you can almost see the former chief justice shaking his head in disbelief as he delved into the debacle.

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His tut-tutting comes through first when he sets out how the bid began, explaining how a commercial naivety seemed to pervade the NZRFU from the beginning.

When the Australian-New Zealand joint bid was accepted in 1997, the two unions failed to properly nail down the IRB. Sir Thomas also described the arrangements between the host and sub-host as "sloppy" and unfavourable to New Zealand.

"At the NZ end it may have been viewed more as two friends going into a venture together, and such a view was more explicable in 1997 than today," said the report. "However, if that was the approach, it was a naive perspective. In both respects (financial and structural) the concept was conducive to an 'every many for himself' approach rather than a partnership."

David Moffett, who was the NZRFU chief executive at the time, this week described the deal as a fantastic bid. "It was on track and it was going to be fantastic for both countries. There was no misunderstanding then and I don't see what would have happened in the period since."

What happened after Moffett's departure was that the loose initial arrangements let the IRB pile $23 million in additional costs on Australia and New Zealand.

It suddenly meant the NZRFU was going to face a $7.5 million loss for hosting its part of the tournament. By the time this bad news arrived in the middle of last year, the NZRFU had two staff working on the World Cup, Lara Middleditch, an events management specialist hired just before the 1999 World Cup, and Dean O'Shaughnessy, a contract analyst. Middleditch had other responsibilities as well.

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Steve Tew - who this week became the acting chief executive when David Rutherford resigned - was appointed general manager of RWC2003, but he also had other pressing responsibilities including "General Manager - Rugby" which had him overseeing the Super 12 and NPC.

In perhaps his most obvious comment, Eichelbaum wrote: "It seems plain that at least from mid-2001 a person of Mr Tew's capabilities ought to have had fulltime responsibility for RWC and been supported by a greater number of staff."

In fact, the board had considered this option in March 2001. A report to the board recommended setting up a separate unit staffed by a number of specialists. The board rejected it.

Instead, Middleditch and O'Shaughnessy were left to get on with the work as best they could. As busy as they were, they had enough time to be prophetic.

An April 2001 staff report pointed out the "potential to miss RWC planning deadlines through existing NZRFU core business commitments taking precedence".

Within four months, the board was ready to drop the tournament if it meant the NZRFU was going to lose money.

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"Unless NZRFU2003 [the tournament] produces a substantial financial profit for NZ there is no reason to host it," said a report written for the board.

Herald rugby writer Wynne Gray, who began warning of the looming debacle last year, believes the union leadership took too much notice of the accounts and did not consider public sentiment enough.

As evidence of this, he points to the rapid u-turn the board executed in mid-March when the public turned on the NZRFU over the World Cup failure. While they had been lethargic in their attitude to the tournament for so long, they suddenly employed desperate measures in an effort to recover sub-host status at the April 16 IRB meeting in Dublin.

"I believe they have suddenly gone, 'Christ, this actually means something to NZ'," says Gray. "I think before that they thought New Zealand was like old rugby money and thought the IRB wouldn't do anything to them. 'We can take our time because we're a major rugby power.' Well, that fell over - welcome to the real world."

In a column in March, Gray lay the blame for the union's view on Rutherford, whose leadership was marked by a hardened commercial attitude.

Gray says the board should have been pulling Rutherford up, and their failure to do so reflects how out of touch they are with provincial unions and the rugby public.

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"They are too much business-oriented rather than rugby. The bottom line they were being shown by Rutherford would have showed that they were going to lose money. As businessmen they say, 'Well, bugger that.'

"But they lost sight of the rugby magnetism that was going to be created by this event in New Zealand."

If Gray is forthright, John Alexander, chief executive of the Eden Park Trust Board, is downright steaming.

"I'm alarmed that what I have seen in this report is the malaise of the NZRFU," says Alexander. "That is just astounding."

While the board was worrying about the cost of hosting the tournament, Alexander wonders if they considered the cost to the country if the tournament was lost.

"It was a huge blow, not just to Eden Park and rugby but the region of Auckland," he says. "You imagine how many hotel beds, how many meals and restaurants, how many hire cars, how many bus trips, airport taxes ... you add it up. It just keeps going."

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What makes Alexander most mad is the realisation that while the union should have been warning Eden Park about the corporate box issue months earlier, he did not find out that the IRB would require all of the ground's boxes until early March.

"We were always aware that a certain number of boxes would be required ... and we had no issue with that," said Alexander.

"But no one ever came to us directly and said, 'Hey, we want all your boxes,' until March."

He was eventually told by a Rugby World Cup Ltd manager, a man whose name Alexander has forgotten, at the end of an inspection tour of Eden Park.

After the inspection, the RWCL man joined members of the NZRFU, the Auckland Rugby Union and Alexander in a meeting room.

"We talked through all the other issues - media facilities, hospitality facilities, signage ... Then he announced all the boxes would be required. That was a huge shock to us."

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From what Eichelbaum uncovered after studying 13 boxes of documents, NZRFU phone records and hours of interviews with 35 key players, the NZRFU should not have been shocked.

Eichelbaum concluded that while the IRB had been vague in its definition of "clean stadiums" for a long time, the NZRFU knew from at least early July last year that RWCL would seek all boxes.

The NZRFU chose not to approach the grounds about access to the boxes, instead relying on McCaw's belief that he had extracted a concession from Pugh.

The policy of inaction blew up in the NZRFU's face on March 8 when Australia announced New Zealand had been dumped as sub-host because it could not agree to key requirements.

In another tactical blunder, the NZRFU decided to go on the front foot, sending Rutherford and McCaw along to a press conference where they began a savage series of assaults on Australian Rugby Union chief executive John O'Neill and on Pugh.

For a while, the tactic worked within some domestic circles. The Holmes television programme picked up on Rutherford and McCaw's sentiments, mocking O'Neill and Pugh for their stances.

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From Australia though, former Wallaby captain John Eales predicted on March 10 that the NZRFU's tactics would not hold back the public anger for long.

"When the harsh reality bites and [the public] realise the World Cup will not be played out in their backyard, there will be a serious backlash."

An Australian player had been able to predict what the New Zealand rugby administrators could not.

There are mitigating circumstances. A source close to the board points out that when the NZRFU became concerned about the expense of sub-hosting, one of their worries was the costs that would be imposed on the rugby public. Ticket prices would have been extraordinary.

"You would never have got the revenue that was expected from the event [by the IRB] out of the New Zealand public," said the source.

"Would people in Napier have been prepared to pay twice their normal ticket price of a Super 12 match to watch Romania play Italy or something? The board was trying to take a realistic approach."

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There is another consideration that is picked up by Eichelbaum. In 1997, when the bid was first accepted, New Zealand rugby was healthy - remember this was before the crushing on-the-field loss at the 1999 World Cup.

New Zealand began its World Cup 2003 preparations in a strong position compared with Australia. By mid 2001, Australia had become the world powerhouse of rugby that New Zealand thought it was.

Eichelbaum: "Rugby in Australia boomed after 1997. Australia experienced playing success both in international matches and Super 12, stadia seating capacity was expanded and public support increased. ARU was able to take advantage of these trends so that from its point of view the predicted outcome of RWC2003 improved dramatically despite the imposition of extra costs, whereas for NZRFU the trend worked in the opposite direction."

Perhaps McCaw and Rutherford's outbursts against O'Neill and Pugh show this fact had still not sunk in by March this year.

There is other evidence the NZRFU was not facing reality.

When the Weekend Herald of March 16-17 reported that relations had been soured so much that IRB figures wanted the pair to go - an outcome accepted by the board this week - the NZRFU said it was not taking the report seriously.

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The board should be given credit for commissioning the Eichelbaum inquiry and releasing it in full. But has the board's handling of the report's release showed further signs of their inability to connect with the public and the rugby provinces?

Eichelbaum handed over his report on July 11, a Thursday. The board gathered at the Heritage Hotel in Christchurch three days later following the All Blacks' victory over Australia. The next meeting was last Friday, July 19.

Both meetings were also attended by specialist legal and public relations advisers. PR company Porter Novelli was called in to help manage the release of Eichelbaum's findings, and law firm Russell McVeagh advised the board on legal and process issues raised by the report.

Having negotiated a board and management reshuffle, the NZRFU released the report. The announcement was carried live on 6pm television news - a move that ensured the NZRFU message got out to the masses uncluttered by reactions to it.

They were never going to be able to suppress those reactions for long. The fury rippled through the media, out into the provinces and among the fans.

The board that had for so long been ignorant about the depth of public feeling over the Rugby World Cup was about to get the message loud and clear.

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Yesterday, McCaw, the star witness who let down his fellow board members, gave in to pressure to resign from the board altogether.

Sir Thomas Eichelbaum's full report

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