Media Release
Friday, 13th February 2009

Advertising Standards Authority finds Carisbrook Stadium Trust advertising “misleading”

* CST contracts could be void *

The Advertising Standards Authority (ASA) has found information contained in the CST brochure to be misleading.

Mr Michel de Lange, a resident of Dunedin, complained to the ASA last year about marketing material for the proposed Dunedin stadium issued by The Marketing Bureau Ltd saying it misled the public.
He wrote to the ASA complaining the brochure wrongly claimed that:
1. the University of Otago is a key stakeholder (when it is building on adjacent land) and
2. the Dunedin City Council and the Otago Regional Council have confirmed their funding.

In a letter dated 29th January, ASA Deputy Secretary Heather McKenzie said the committee upheld the second point of the complaint by Mr de Lange and found there was a breach of the relevant code.

The ASA has requested the Carisbrook Stadium Trust “voluntarily withdraw the advertisement” and “that advertisements containing the material complained of do not appear in the future.”

Stop the Stadium President, Bev Butler says "What this means for the stadium project is that one of the fundamental conditions set by the DCC for the project to proceed - 60% private funding - won’t be met. The contracts could conceivably be legally challenged due to the misleading advertising. In short, the CST contracts are not worth the paper they're signed on. What a mess these cowboys have got themselves into.”

Mr de Lange said, “I am naturally pleased that my complaint was upheld. I hope that anyone, who has sponsored the stadium, may benefit from having all relevant information.”

ENDS

Read on for the Advertising Standards Authority decision.

Meeting 28 January 2009
Complaint 08/604

Complainant: M. de Lange
Advertisement: The Marketing Bureau Ltd

Complaint: The direct mail advertising material distributed by The Marketing Bureau Limited was in the form of an unaddressed flyer headed “THE NEW OTAGO STADIUM IS “GO” – MAKE SURE YOU ARE INSIDE!” and a brochure, the cover of which showed a “pop” star on a spot lit stage, reaching out to touch the hands of his fans. A caption said: “It’s what’s inside.”.

The letter commenced with:

“On 17th March 2008, the Dunedin City Council confirmed its funding of the new Dunedin Stadium Project. Subsequently, the Otago regional Council has also confirmed its funding contribution. Together with the University of Otago, these are the three key stakeholder organizations in this world class, multi functional development.”

The brochure provided details about the proposed stadium and offered SPONSORHIP PARTNERSHIPS, including “Pricing and Terms” for the LOUNGE CLUB, OPEN CLUB RESERVES, CORPORATE SUITES, and FOUNDERS CLUB.

Complainant, M. de Lange, said:

“Type: Other
Where: It is printed material. I saw it after it arrived in my letterbox today.
Who: The Marketing Bureau Ltd, 6/39 Tennyson St., Dunedin
Product: Sponsorship for proposed Dunedin Stadium

Complaint -
My complaint is about marketing material for the proposed Dunedin Stadium.
It has been issued by The Marketing Bureau ltd (info@otagostadium.co.nz) or tel. 03-479 2823.

The brochure is misleading on at least 2 counts:

1) It states (on the final text page) the following:

"Not least among these benefits for our sponsorship partners is an association with the University of Otago, one of the key stakeholders in the Otago Stadium"

This is misleading because the university is not a stakeholder in the proposed stadium. The university is planning to build its own facility on an adjacent site.

If I subdivide my garden, and use the proceeds to build a house, it would not be reasonable to say that my new neighbour is now a stakeholder in my house. Likewise, it is misleading to say that the university is a stakeholder in the proposed stadium. It suggests that the university contributes financially to the stadium, which it will not.

2) The covering letter states that Dunedin City Council and the Otago Regional Council have confirmed their funding.

This is misleading, because this fails to mention that such funding is subject to conditions. DCC funding is subject to 9 conditions
(see:
http://www.dunedin.govt.nz/council-projects/stadium/17-march-resolution)

The Otago Regional Council have also imposed conditions and deadlines for the funding. These can be read at the ORC web site.

The covering letters does not mention any conditions and therefore misleads potential sponsors into thinking that the public funding is 'in the bag', which it is not.”

Procedural Issue – Chairman’s Ruling 11 December 2008

The Chairman ruled that the Complaint be accepted for consideration by the Complaints Board only in relation to the claim “Dunedin City Council and the Otago Council have confirmed funding”.

The Chairman ruled there were no grounds to proceed with the claim: “Not least among these benefits for our sponsorship partners is an association with the University of Otago, one of the key stakeholders in the Otago Stadium".

In making this ruling he noted the letter advertisement included:

“The venue will also accommodate significant new facilities for the University of Otago, both literally and philosophically creating an extension to this unique city centre campus and thus contributing to making the venue an everyday centre of activity for the entire community.” He noted that the Otago University would use the facility on a regular basis and “had opted to stand proudly alongside Otago Stadium in more than just name.”

In his view, a “stakeholder” did not necessarily need to have a financial interest in a project, which was in this case the construction of a stadium, but could be a person or organisation with a non financial interest in a project. He noted that Condition 4 in the Dunedin City Council 17 March RESOLUTION was:

“That a contract be entered into with the University of Otago in relation to the land it is to purchase and written confirmation be given by the University of Otago as to the facilities that are proposed to be built on the land.”

This was followed by:

“Status at 31 August 2008

A development agreement with the University of Otago, in relation to the land it is to purchase, has been through two drafts and is progressing satisfactorily.”

This in the Chairman’s mind, further confirmed that the University of Otago was a stakeholder in the Otago Stadium project.

The Chairman ruled that the following provision was relevant:

Code of Ethics - Rule 2: Truthful Presentation - Advertisements should not contain any statement or visual presentation or create an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, is likely to deceive or mislead the consumer, makes false and misleading representation, abuses the trust of the consumer or exploits his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading).

The Advertiser, The Marketing Bureau Ltd, said:

“We are in receipt of your letter in respect of the above complaint.

We are surprised that the Chairman has opted to proceed with this complaint as we regard it to be frivolous and vexatious.

The copy referred to by the complainant states that "On 17th March 2008, the Dunedin City Council confirmed its funding of the new Dunedin Stadium Project. The Otago Regional Council also confirmed its funding contribution."

The documentation of each of those decisions is clear. The funding commitments were made by each of those bodies.

As is entirely usual with such Projects, there are requirements which have to be met by the project subsequently. If those requirements are not met, then the funding bodies have the option to reconsider their funding commitments. However, this does not mean that it is misleading or inaccurate to state that the funding commitments were not made. They were made and are minuted in the documents accompanying the complaint.

I trust this clarifies the situation and that there will be no need for this action to proceed further.”

Deliberation

The Complaints Board read thoroughly the relevant submissions and the brochure and flyer advertisements. It noted that M. de Lange’s complaint had been accepted for consideration by the Complaints Board only in relation to the claim: “Dunedin City Council and the Otago Council have confirmed funding” as, in the Complainant’s view, this claim was misleading.

The Chairman directed the Complaints Board to consider the complaint in relation to Rule 2 of the Code of Ethics.

The task before the Complaints Board was to ascertain whether the Advertisement before it contained any statement, or created an overall impression or and exaggerated claim which was misleading or likely to mislead the consumer, or exploit the consumer’s lack of knowledge.

The Complaints Board reiterated the long held procedural condition that should a complainant challenge the veracity of a claim made in an advertisement, the onus fell with the Advertiser to substantiate that claim.

The Complaints Board turned to the direct mail advertising material, the brochure and flyer, before it and noted that the purpose of the communication was to sell memberships to the LOUNGE CLUB, OPEN CLUB RESERVES, CORPORATE SUITES, and FOUNDERS CLUB. In doing so, the advertising material gave information about the facility which was yet to be built, and made claims about the support for the project, stating in particluar:

“On 17th March 2008, the Dunedin City Council confirmed its funding of the new Dunedin Stadium Project. Subsequently, the Otago Regional Council had also confirmed its funding contribution.”

However, the 17 March Resolution document stated:

“RESOLUTION:

“That the Dunedin City Council commits to the Awatea Street Stadium project on the following terms and conditions”: “

Listed below were nine conditions with regard to the project. However, there was no concrete evidence provided to the Complaints Board that the conditions had yet been met, the resolution document reporting progress under the heading Status at 31 August 2008. In the Complaints Board’s view, confirmed funding meant exactly that, not funding that was conditional. Thereby, the Complaints Board was unanimously of the view that the funding claim was overstated and exaggerated and was thereby misleading to the consumer. Accordingly, the Complaints Board ruled that the Advertisement was in breach of Rule 2 of the Code of Ethics.

The Complaints Board ruled to uphold the complaint.

Decision: Complaint Upheld

ENDS

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