July 10, 2001: On or about this date NZRFU receive Mr Pugh's notes from meeting between ARU and RWCL recording that "clean stadia", including corporate boxes, was a fundamental term.
July 26, 2001: Fax from NZRFU chief executive officer David Rutherford to ARU chief executive officer John O'Neill. In recent days budgets had been received showing a significant loss to New Zealand - the latest figure A$6.5 million. At the same time, the profit to ARU was A$28.7 million. Pointed out that IRB/RWCL had added A$19.6 million in new costs not taken into account in the bid document.
August 9, 2001: Report by Rutherford for NZRFU board. Costs had risen exponentially since the successful bid. Tender bid envisaged a profit of NZ$28.5 million. Unless the cup produced a substantial financial profit for NZ, there was no reason to host it. It delivered on virtually none of NZRFU's strategic imperatives. Excessive ticket prices. Disruption of National Provincial Championship (NPC) games. Options included declining to sub-host. Others were a guarantee of a minimum financial return, or to obtain significant Government backing to compensate the over $100 million benefit to the NZ economy that would otherwise be lost. Board resolved it was unacceptable for NZRFU to lose money by sub-hosting and that an "all or nothing" approach was to be taken, including non-participation in the tournament.
August 2001: Three faxes from O'Neill (two to Pugh) expressed concern about NZ financial outcome. Proposed various solutions and stated ARU remained very supportive of assisting NZRFU to obtain a subsidy. On August 28 a bristling response from Rutherford saying O'Neill had misrepresented NZ position, and what was urgently needed was a face-to-face meeting. O'Neill responded Rutherford should calm down until the response was received.
August 28, 2001: Reply from Pugh saying RWCL directors had reviewed the matter and obviously there were serious implications. RWCL would not subsidise tournament costs or provide financial guarantees. If tournament not self-financing then RWCL would be obliged to consider other options for hosting. It was not the RWCL's function to apportion the revenue between the two host unions, but it expected them to make a sensible commercial arrangement ensuring both received an equitable share. Board did not contemplate a position where the whole of the net available financial return would accrue to the benefit of one union. Urged a resolution, as time was slipping by.
September 4, 2001: Internal memo from NZRFU chairman Murray McCaw reporting on meeting held between him, Rutherford and top Australian representatives.
ARU wanted to obtain a solution with NZRFU without involving IRB. Memo noted ARU was very cautious and had expressed a concern that IRB could take the World Cup away from Australasia altogether if they were unable to reach agreement between themselves. ARU made propositions, which were rejected. The NZ position seemed to be that profits should be shared evenly between NZ and Australia. Australia agreed, with reluctance, to a meeting involving IRB.
Fax from O'Neill to Rutherford about financial arrangements. Set out a budget showing that expenses generated by RWCL since the bid amounted to A$20 million.
"In addition, there was significant under-budgeting amounting to a further A$65.9 million. This added up to total expenses of A$106 million compared with the bid expenses estimated at that time of A$20 million!"
Five courses of action available to New Zealand in order to overcome the loss budgeted, including that Australia would host the entire tournament and license All Black pool matches to be hosted by New Zealand. An unfavourable response from NZRFU.
September 7, 2001: Internal NZRFU staff memo estimates NZ was facing NZ$8.7m loss. "Costs have completely blown out." Better not to host than risk a loss.
September 13, 2001: Letter from Rutherford to O'Neill. Under all options, NZ either lost money or made a small profit. At the same time, Australia had the potential to make a profit in excess of the amounts IRB regarded as reasonable for a host. IRB had opportunity to make an even larger profit. Wanted a review of how cup was organised and the spoils were shared. O'Neill responded that the common denominator of NZ's proposals was that someone had to write NZ a cheque.
September 14, 2001: A strongly worded letter from O'Neill to Pugh, complaining that RWCL kept adding obligations without making concessions. A face-to-face meeting was sought, at which Pugh would be present. No one else, the letter said, seemed to have authority to agree to anything.
On the same day, a separate letter from O'Neill to Pugh about the financial model. He explicitly took up the cause for NZ, saying NZ's situation had been plain for several months and that he could not understand how RWCL could claim not to have been aware of the low projected return.
September 17, 2001: Letter from Rutherford to O'Neill proposing a joint position in bargaining with RWCL. The main thrust ought to be to reduce by a minimum of A$21 million the extra costs imposed. The letter concluded by suggesting two new options for profit sharing.
September 18, 2001: A terse response from O'Neill saying these proposals added insult to injury. "We have run out of patience with your obfuscation and lack of realism . . . You must for the first time provide us with a straight answer which has some relationship to the realities of your own predicament. It is about time you attributed some respect to the generosity of the approach which we continue to take. The damage to the relationship between our unions may be significant unless common sense and fairness prevail." A reply in similar tone. A "bad atmosphere" continues through subsequent correspondence.
October 4, 2001: Fax from Pugh to O'Neill saying real problem seemed to result from the consequences of the agreement between Australia and NZ as to sharing and allocation of costs.
The directors were firmly of the view this was an issue to be resolved between host and sub-host. He discouraged any attempt to renegotiate the A$20 million extra costs. This was part of the bargain that had been struck and RWCL did not want to revisit it, but if it was revisited other matters would be reopened. At this time relationships between NZRFU, ARU and RWCL deteriorated further owing to a leak of the RWC match schedule to the media. A subsequent investigation found the leak was not attributable to NZRFU.
October 2001: RWCL made it clear that the basis on which the cup was conducted would not be altered, that it would be run on the 1999 model, and that in any event this was not a matter for NZ to change.
October 27, 2001: A tripartite meeting in Singapore did not resolve the differences. Pugh wrote this was now the cause of "the greatest concern" and RWCL would take all necessary steps to protect world rugby from the harm caused by a continuation of the dispute. He set out a timetable for its resolution. NZ alerted to the possibility that the bid could be reopened (and therefore NZ might miss out). NZ persisted with the issue of restructuring the division of revenues for Rugby World Cups.
ARU told (and NZRFU became aware through IRB deputy chairman Rob Fisher, a New Zealander) that "clean stadia" meant 100 per cent of corporate boxes.
November 11, 2001: McCaw meets Pugh in London. Critical discussion regarding boxes, which McCaw later cites as evidence that Pugh agreed to New Zealand's case that only 50 per cent of boxes need to be clean. But Pugh later produced an email replying to McCaw's summary of the meeting which reiterated the IRB position; "Clean venues, including stadia and environs, is a fundamental term of the HUA (host union agreement)."
December 2, 2001: Following the unsuccessful Singapore meeting, and subsequent submissions, RWCL issued decision about the financial arrangements. NZ to cede the third/fourth play-off to Australia in return for A$10 million. Further elaborate provisions capping the financial returns.
December 10, 2001: McCaw reports to the NZ Board on the financial settlement. Believes NZ should be able to generate a minimum profit of $A2 million, although $A3-5 million may be achievable. In reporting on corporate boxes, he said ARU have apparently signed HUA containing requirement of full delivery of corporate boxes knowing they cannot deliver. Pugh had given assurances to Fisher and himself that NZ should sign and they will take a pragmatic view of the NZ situation. Board agrees to enter into sub-host union agreement when finalised.
December 2001: Negotiations on agreement continue past two deadlines. On December 21 ARU sends final draft to RWCL for approval. A couple of items still outstanding - including NPC.
January 30, 2002: RWCL rejects agreement and says it will draft its own. RWCL director and NZRFU board member Rob Fisher reports that RWCL is unhappy about the NPC overlapping with the World Cup.
February 10, 2002: Australia and New Zealand receive RWCL's version of agreement. Both reject it on legal advice.
February 22, 2002: NZRFU Board meeting receives full report on RWC issues, following a three-day meeting in Sydney with RWCL representatives as well as ARU. On boxes, throughout the meeting RWCL had communicated a desire for the obligations to be met in full, and was not prepared to disclose a minimum requirement of boxes for each game. NZ level of compliance noted as very low.
"By now, whatever may have been thought previously, it is clear there is an issue about boxes."
NPC continues to be a major preoccupation. Further correspondence with RWCL on NPC, with NZRFU giving restrictions it would regard as acceptable.
February 25, 2002: A copy of an ARU report shows that there are problems with boxes at most Australian venues too.
February 26, 2002:IRB secretary Brophy agrees to some overlap in NPC matches, but describes RWCL's "hugely embarrassing" position over not being able to finalise arrangements with sponsors because of the controversy over clean stadia. The fax set out a timetable that an agreement with New Zealand must be reached within "a few days". If not, ARU would be invited to make an alternative proposal.
February 28, 2002: Memo from RWCL. The Board had made a decision on 25 February regarding NPC and there was no possibility of further negotiation. NZRFU continued to press the issue.
February 28, 2002: Update from Rutherford to NZ Board. Still proposing further negotiations on NPC (two further propositions advanced in week commencing 4 March). As to boxes, hoped a minimum figure would be forthcoming during the audit visit.
February 28-March 1, 2002: Exchange of faxes between Pugh and Rutherford. Pugh's letter is measured but refers to the fractious nature of the relationship between host and sub-host and also the media leaks. A strong response from Rutherford implied Pugh has not shown leadership in getting issues sorted out.
March 1, 2002: New sub-host agreement for New Zealand in form acceptable to RWCL and ARU. NZRFU given five days to consider. Meanwhile inspection team arrives for tour of major NZ venues. Finds minimal availability of boxes. By March 5 it is clear they are looking for 100 per cent of boxes.
March 4, 2002: Memo from legal advisers says NZ is faced with the same issues as in December. ARU rugby general manager advises counterpart Steve Tew that NZ should get on with it and rely on fixing problems later. Fax from ARU says RWCL wished to be assured every effort being made that all suites and boxes being sought at venues. They may eventually cede back some rights.
March 6, 2002: NZRFU Board meeting. Agreed to accept what was offered on NPC. Issue was whether to sign or make counter offer. Risk clear that NZRFU could lose sub-host status. Board decides not to sign in unamended form.
March 7, 2002: Memo from ARU. If agreement was not made unconditionally ARU reserved the right to withdraw the sub-host offer. Fisher emails Pugh urging deadline extension, Pugh declines next day.
March 8, 2002: NZRFU accepts NPC conditions but complains it cannot comply on corporate boxes and hospitality and catering and a requirement for an area 500m around the stadium to be ad-free. Just before deadline (5pm NZ time) it signs but adds clauses protecting its position on these three issues. Response from ARU 32 minutes later withdrawing agreement. Rutherford and McCaw attack Pugh through the media.
Following March 8 2002: Australia makes bid for sole Rugby World Cup host status. NZRFU challenges RWCL's right to make this decision.
March 13, 2002: Unsuccessful meeting in Sydney between sports minister Trevor Mallard and Pugh.
Match 24, 2002: NZRFU letter of apology to Pugh.
April 5, 2002: NZRFU signs the March 1 sub-host agreement without amendment.
April 7, 2002: ARU bid for sole host status put forward by RWCL to IRB.
April 17, 2002: Alternative NZRFU proposal (NZ hosts one pool only, one quarter final, one semi final) sent to IRB councillors. RWCL reports unfavourably on it.
April 18, 2002: Council decides 16-5 to award sole hosting to ARU. IRB media statement said generous accommodations made by RWCL to meet the needs and problems of the NZRFU were repaid with consistent failures and wholly inappropriate behaviour. It implied, incorrectly, that the requirement for "clean stadia" had been the same since 1998.
Sir Thomas Eichelbaum's full report
