What’s Eden Park Trust Board’s (EPTB) real financial position?




Eden Park Trust Board’s marketing campaign has led many to believe that EPT needs concerts to be financially sustainable, and the
underlying message is that locals will just have to put up with it.

We reject that notion entirely.

EPTB always makes a healthy cash profit, despite it being an extremely costly venue.

EPTB has 32 full time and 6 part -time staff. This includes twelve with “Managers” in their job title!

The “loss” that is always talked of, is wholly caused by depreciation on the largely free/gifted stands! EPTB did not pay for the new
South Stand through depreciation and no-one expects it put aside cash to replace it nor the East Stand in 70 years’ time.

What Ratepayers expect is a venue that meets its planned maintenance costs. They don't expect spending on expensive re-branding,
promotions, around the world trips and unrealistic resource consent applications.

The Eden Park Trust Board has also walked away from cost savings that they could have been achieving since 2014, by working a
shared services model with Council’s own stadiums. These savings were reported to be up to $5m pa.

While concerts appear attractive, they come with business risks – which work when, such as with Mt Smart, there are no other summer
sport events being pushed out. But moving cricket, early Blues season games to accommodate potential concerts, means lost revenue,
and also not supporting the grounds sporting focus, which is something emphasised in the Unitary Plan.

Despite what many have been led to believe, EPTB were not “bailed out” by Council last year.

They had debts, which were underwritten by Council. Those debts were largely existing pre RWC debt, EPTB’s agreed contribution to
the redevelopment, along with extras the EPTB wanted, such as the East Stand.

Council decided to shift this from a guarantee, which was an onerous structure for both EPTB and Council, and to provide the loan
directly, based on Council’s lower borrowing costs.

However, that did not “bail out” EPTB. The loan is still paying interest and covering Council’s costs.

The loan will also be repaid overtime and is protected by a mortgage over the ground.

EPTB also approached Council to help with maintenance costs over the next 3 years – some $9.8m. This was intended by Council to also
be a loan, but without a repayment date. However, on a very narrow vote, this for political reasons became a gift.

It was unclear at the time why EPTB couldn’t fund their own normal turf replacement and maintenance, out of their substantial cash
profits, or by selling investment properties.

However, since then, we have of course seen the substantial investment in the campaign for concerts, and also a planned 43m x 8m super
video screen.

 

Financial background

EPTB makes a healthy profit before depreciation.

Year                 Profit before Depreciation & Revaluations

2019                2.5m

2018                2.1m

2017                4.1m. (Lions tour)

2016                1.9m

2015                  .4m

2020 was predicted by EPTB to be even better with a return to 2 All Black tests and 5 cricket internationals. Also, Eden Park will receive
approx. $3.3m of Council funding/grants for the next 3 years. Indicating a likely profit before depreciation of over $6m per year.
Covid-19 may have a temporary impact this year but does not change the underlying fundamentals.

These profits, along with sales of Cricket Ave properties, has enabled EPTB to repay $6m of loans in the last few years – despite not
cutting costs with shared services with Regional Facilities Auckland (RFA), or pursuing naming rights.

Depreciation, while required from an accounting point of view, does not impact their future sustainability. EPTB also depreciates its
buildings over a much shorter time frame (40 yrs) than other stadia (70 yrs) – making the depreciation higher and the loss after
depreciation look worse than it should be.

 

EPTB is therefore sustainable with a good underlying profit - without the need for concerts. EPTB has potential to add substantial funds
direct to this profit as will be seen below.

 

The Trustees view of the grounds current sustainability can be seen in the trustee fees paid out since they were put in place in 2010 –
over $1.2m:

2009                0

2010                120,000

2011                120,000

2012                118,000

2013                104,000

2014                102,000

2015                110,000

2016                130,000

2017                144,000

2018                144,000

2019                145,000

            Total 1,237,000

The Trust Deed/legislation only allows that trustee fees “may” be paid. So we see that as a sign of the Trustees own faith in the
sustainability of the venue.

 

In 2014 RFA proposed Eden Park cost savings of up to $5m pa through sharing services/staff with them.  Eden Park declined to
participate in savings or further investigations.

See:  https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11333220

 

It has been, and remains a high overhead/costly venue.  32 Fulltime, and 6 part-time staff as noted above 

See Charities registry annual return:

https://register.charities.govt.nz/CharitiesRegister/ViewCharity?accountId=451f441c-1531-dd11-8f7f-0015c5f3da29&searchId=68eeacea-bfd7-4f0b-a9eb-64ab8d253d1c

Under “Annual return” – summary on right

And from EPTB’s annual accounts:

Total staff costs

2019    2.7m

2018    2.4m

2017    2.6m

2016    2.4m

Key Management compensation

2019    1.4m

2018    1.1m

 

EPTB does not need to take concert revenue off Council run venues, in order to continue to operate, and it does not need to impose the
impacts of concerts on the surrounding and wider area.