Part 1: Introduction

1.1
On 6 December 2008, Auckland Regional Council (the Council) hosted at Mount Smart Stadium an exhibition football match between LA Galaxy (a team that included international football star David Beckham)¹ and an Oceania "All Stars" team.

1.2
The Council organised and promoted the match and other associated events (collectively, the LA Galaxy event) and carried all of the financial risk. Council officers had initially estimated a break-even point for the event of around 25,000 ticket sales. This was later revised upward when expenses increased. The actual number of tickets sold was 14,409, and the event resulted in a loss to the Council of $1.88 million.

1.3
On 12 December, the chairman of the Council asked the then Auditor-General, Kevin Brady, to consider carrying out an inquiry into the loss. The Auditor-General decided an inquiry was warranted because of the size of the loss, and because there was public interest in how that loss came about. The terms of reference for the inquiry are set out in the Appendix.

The inquiry process and our report

1.4
In carrying out our inquiry, we visited the Council headquarters and Mount Smart Stadium, and met with relevant council officers and councillors. We also met with a staff member from each of the Council's partner organisations for the event – the Auckland City Council and the Oceania Football Confederation² – and with managers of other stadiums and events centres.

1.5
We reviewed information and files from the Council, including the Council's financial records for the event.

1.6
We began our inquiry in February 2009, once we set our terms of reference. The Council carried out two reviews of the event. We note in Part 6 the outcomes of the Council's two reviews. We are satisfied that the Council is already taking appropriate steps to address the issues that we have identified.

1.7
Part 2 of this report provides background information about Mount Smart Stadium. The other Parts discuss how the LA Galaxy event came about, the Council's management of the event, and our audit of revenue and expenditure for the event. We provide our conclusions in Part 7.

1: LA Galaxy is a football team based in Los Angeles. It competes in the United States Major League Soccer competition. From time to time, the team plays friendly or exhibition matches against other teams in the United States and around the world. David Beckham joined the LA Galaxy team in early 2007.

2: The Oceania Football Confederation is made up of a group of 11 countries in the Oceania region. It is one of six such confederations around the world that support the international football association, FIFA, and raise the profile of football in their regions by staging competitions at club and international level. The Oceania Football Confederation is a tenant at Mount Smart Stadium, where it has offices and a football academy.