The Otago Rugby Football Union (ORFU) is 131 years old but it is in financial trouble. It owes $2.35m, some to the Bank of New Zealand (the BNZ), the Dunedin City Council (DCC) and local businesses. For the last two weeks it seemed it would be in liquidation and that would be the end of the ORFU. However, now the BNZ and the Dunedin City Council have agreed not to ask for payment of their debts. The NZRU also gave a $500,000 loan.
The ORFU owed the BNZ more than $1m. Instead the BNZ will get the right to be a sponsor.
The ORFU owes the DCC $480,000. The mayor said he did not care about the ORFU but he did care about ratepayers. If the council did not save the ORFU, ratepayers would lose $480,000. The Council agreed to cancel this debt but in return they want more income from rugby. Dunedin has a new covered stadium for rugby which cost $198.3m. About half of that money came from ratepayers. The NZRU has promised three important games in the next two years, which will help to pay for the stadium.
The Board of the ORFU must resign and a new board will be elected. The team and coaches must also cut their budget by $290,000.
in liquidation – bankrupt, owing money and no way to pay debts
debts – money which is owed to a person or business
loan – borrow money but have to pay it back later
sponsor – can advertise their name at rugby games
ratepayers – home owners pay rates (a tax) to the council
stadium – football field with seats; this stadium has a roof
budget – a plan for spending
Note the pronunciation of debt (silent ‘b’)