KEY POINTS:
Auckland Regional Council chairman Mike Lee said he was disappointed that the council's David Beckham event bombed at the weekend but he sounded less than distraught, certainly less distraught than he might have been if he had suffered the financial loss personally. That, in a nutshell, is why public bodies should not be drawn into business.
Mr Lee describes the event as part of a "Bringing the World to Auckland strategy", the benefits of which would ripple through the region's economy. Even now, the Auckland City Council's "common practice" $115,000 expenditure on the event remains a great investment, according to its events group manager, Rachael Dacy. But the only beneficiaries of this dim-witted decision are the British soccer star and his American team, LA Galaxy, richer to the tune of US$1.2 million. And the only thing rippling through the regional economy will be rate demands unless the stadium's regular attractions can cover the loss.
The regional council's chief executive, Peter Winter, says the venture was conceived by the city council's major events team, and the ARC agreed to underwrite the risk. Whatever possessed Auckland's public entrepreneurs to imagine Beckham would be a financial winner for it? The answer can only be, because Wellington had done it.
Real entrepreneurs might have warned them lightning seldom strikes twice. Beckham captivated the country last year because he was a novelty, a big name in his game and even bigger international celebrity whose first visit attracted all the excitement and curiosity promoters could expect. A second visit could not be the same, especially so soon.
That intuitive realisation would have struck anybody, investor or company, asked to stake the event. The thought probably also occurred to the ARC's parks and heritage committee when it made the decision. Mr Winter says members were warned of the risks. But risk is never quite real to decision-makers with public money, and responsibility is dissipated by committees. Intuitive doubts, usually difficult to put into words, would surrender to the easily stated fact that Beckham was a proven drawcard.
After the debacle, the ARC chairman offered some excuses for the fact that, although Wellington sold 32,000 tickets for its event last year, Auckland could not sell the 19,000 seats to break even at Mt Smart. Aucklanders, he thought, might be more interested in Stacey Jones. Then there was the recession to consider, and the proximity to Christmas ...
Others have suggested Wellington's stadium is better designed and better served by public transport, and the fact that the Galaxy's opposition at Wellington was a serious team with a local following. But no excuse can disguise the stark evidence that when councils venture near a commercial event they are well outside their range of competence.
The Auckland City Council should be looking askance at its "major events team" if that is where this idea originated. It could easily have been the city that carried the cost. The regional council probably took it on only because it owns Mt Smart Stadium. There are wider lessons here for all levels of government that build or buy into assets they call infrastructure.
When they see a need to build a facility that the private sector could not profitably provide, they should not go much further. If it is really needed, the facility will be able to run on the use private enterprise will make of it. When the public owner has to find uses for it, something is seriously wrong.
Auckland's four cities all jealously own and subsidise events venues, leaving a superfluity that is bound to be noted by the royal commission that will soon report on the region's re-organisation. The lessons of last weekend will long ring loud.
