Otago Rugby Football Union general manager Richard Reid says costs on ITM Cup teams are too high and finances are a big issue for provincial unions.
Reid said at last night's annual general meeting of the Otago Rugby Football Union the union had made a cash loss of $51,000 and, although that was disappointing.
"considering the recessionary environment the union was operating in the result was satisfactory.
"But 2011 is going to be more difficult with the World Cup taking up a lot of the disposable income around the place," he said.
"As we move towards the new stadium there are more favourable financial forecasts.
"But the big issue facing unions is finance. There are going to be a set of results from provincial unions over the next few weeks which are going to show the strain the game is under.
"A year ago the NZRU and the provinces negotiated with the New Zealand Rugby Players Association to settle on a salary cap of $1.35 million.
"Then you have the associated costs of running a representative team and all up that is 45% of turnover for the union. That is too high."
Union chairman Wayne Graham said finance was an ongoing issue and the national union had to make adjustments to the provincial models, which he called flawed.
Reid said Carisbrook had become a millstone around the union's neck.
He said it would be a sad day when the union left the ground and the Wales test last year was an undoubted highlight.
But once the union left Carisbrook it could concentrate on being a rugby business and not also a ground contractor and a promoter.
Festivities were planned for the final game at Carisbrook against Southland on August 6, with the club rugby final the likely curtain-raiser.
Reid said there was many benefits in splitting the Highlanders and Otago but felt the Highlanders were still vital to Otago rugby.
In the past few days he had looked at an old Highlanders board report from about 18 months ago.
"In it I said we have tried most things but I just do not know what we would do if we won three games.
"I do now. It does not take long to win a few games to excite a genuine rugby community like ours."
Sir Eion Edgar started his one-year term as president of the union last night while Adrian Read was elected vice-president.
Graham and Andrew Rooney were re-appointed to the board with no other nominations.
