Happy Sunrise

Nice work.

I thought Dynamite was a reasonable runner's chance at 10s but see it has come into 5s. That is bloody short. Diamond Edition at 3.50 the place is ok as it can get out of the gate so might trail the whole way.

Where you see that? Stipes report? lol

How bad is it? Real bad. I imagine you will enjoy this Chief. The numbers don’t lie - accountant ‘follows the money’ to find where the TAB went wrong By Barry Lichter • 6 June 2020 An accountant who worked at the TAB for 16 years has crunched the numbers, pinpointed where it all went wrong, and concluded only further Government support can keep the racing industry alive. Peter Johnstone, who was manager of strategic planning for the TAB, did a lot of data analysis and acted as secretary of John Falloon’s Ministerial Committee in 1991, says if you “follow the money” you can better understand the sad decline of an organisation he once proudly worked for. “The best way to do this in my experience is to look at an organisation’s cash flow statements which I view as superior to all other financial statements for a firm. “The single factor that really struck me is that over the last 10 years, cash flow from operations increased by only $6 million (just under 4%), despite turnover increasing by $1.183 billion (up 33.7%). “This is the key to understanding how it has all gone so wrong. “Many commentators say that costs are out of control, pointing to the increase in payroll costs, yet compared with turnover, they are lower as a percentage than they were 10 years ago, and are actually an identical percentage to 2001 (2.2%).” Lincoln Farms’ May 9 feature moved Johnstone to delve a little deeper into the published financial information of the New Zealand Racing Board and Racing Industry Transition Agency.Johnstone says while Lincoln Farms’ feature story ‘An A to Z of what brought racing to its knees’ explains a great deal about what went wrong in the current century - particularly the high turnover of chief executives and some of the disastrous decisions they made - cash flow from operations shows the real health of an organisation. “Strong operational cash flows allow a firm to fund capital projects and distribute funds to stakeholders such as shareholders (or in the case of the TAB, to the racing industry and latterly sports bodies). They also minimise the need for any borrowing and consequent interest costs.” In 2010, cash flow from operations was $155.8 million, or 9.8% of turnover (and even better in 2011 at 10%). By 2019, this was down to 5.8% which equated to $161.8 million. 41% decline “This is a decline in the rate of return of almost 41% in a decade. Put another way, had the TAB been able to maintain the 9.8% proportion, operational cash flow last year on the same turnover would have been $271.1 million, roughly $110 million more than it actually was. “And in that case, very few of the current problems would be apparent. Racing industry returns could have been hugely improved, and capital expenditure may have been funded without the borrowing and asset sales the TAB has had to fall back on.” Johnstone says Lincoln Farms’ recent interview with Ken Rutherford helped explain the drastic decline. “Rutherford said he could never understand why a succession of TAB chiefs placed such an emphasis on promoting fixed odds betting when the product at best realised half of the 16.5% of tote betting income.” In 10 years the TAB’s cash flow from operations increased by only $6 million (just under 4%), despite turnover increasing by $1.183 billion (up 33.7%).In his analysis of the cash flows for the last 10 years (see chart above) Johnstone discovered clearly the biggest change has been in dividends from betting and gaming. The dividends the TAB paid out in 2010 were 82.4% of turnover and last year that had grown to 86.6%. “The change doesn’t look that bad on the face of it, but when you consider that is a deterioration of 4.2 cents from every dollar the TAB has handled, it is hugely significant. Bonus bets have contributed to a reduction of the TAB’s profit margin.“While it’s a little hard to isolate all the causes, we can surmise they include: * Driving fixed odds betting at the expense of tote betting * The fickleness of sports betting, the profitability of which can often depend on results going the TAB’s way. * The impact of bonus bets - “which I never understood the rationale for, given the TAB was always a low margin business.” * The loss in turnover of easybets - “a subject dear to my heart as along with Alan Mayo I developed the original spec for easybets, which attracted the most favourable rates of commission.” Johnstone says the small gains from a much higher revenue is like the TAB baked a 40% bigger pie, but put only another 6% of steak in it. “I find it absolutely incredible that the TAB increased turnover by so much for so little gain. “What I believe they should have done was to focus on maintaining a healthy margin on every dollar bet, rather than growing turnover at minimum benefit to cash flow or the bottom line. “You could conclude that had turnover not been increased so greatly there may have been less profit, but even on a $2 billion turnover, the old margins would still have increased operational cash flow by some $34 million, and presumably also produced lower costs. “Of course, you can’t discount the issue of costs entirely - with increased automation and superior software tools, you’d expect improved productivity and lowered costs. “However, in general the ratios suggest that the TAB have been effective in controlling costs - in the last 10 years staff and supplier payments fell from 7% of turnover to 6.5%, after reaching highs of 7.5%.” The Jackson Street building was purpose built for the New Zealand Racing Board in 1989 but in August, 2014 it was syndicated by the Oyster Group and the TAB now leases its space. Property sales Johnson is critical of the TAB’s handling of its properties in the last 10 years - notes to the financial statements showing buildings in Petone, Christchurch and Auckland all being sold. “Though I can’t identify all the assets that have been sold the cash flows indicate that $21.3 million was received from the sale of property, plant and equipment and the TAB no longer owns any buildings. “Presumably, these facilities (or their replacements) are why the TAB’s lease/premises costs have gone from 2010’s $4.7 million to 2019’s $14.3 million. “While there are costs associated with owning properties, in most commercial leases many of these costs are assumed by the tenant. The decision to divest these properties makes no sense, since it has exposed the TAB to incurring rentals in perpetuity, which must cost more than retaining them.” The TAB spent $42 million building its new betting platform, to attract sports punters, and it has an annual ongoing cost of $17 million. Capital spending Johnstone says a further area of concern highlighted by the TAB’s cash flow statements is the level of capital spending. Over 10 years this has amounted to almost $207 million, with almost $72 million in the 2018 and 2019 financial years. “This has to be funded by cash flow from operations unless money is borrowed, which has been a necessity in the last two years.” Johnstone says while he’d need access to much more information than is available publicly, you’d have to question the new $42 million betting platform, of which both Lincoln Farms and Rutherford have been outspoken critics. “I was especially troubled by Lincoln Farms’ revelation that the TAB has locked itself into an annual licence fee of more than $17 million, in addition to the substantial capital cost.” Johnstone says what is especially depressing about this is the TAB’s development team in the 1970s, 80s and 90s had exceptional skills. “They developed a world class betting system largely in-house, with the assistance of a few key contractors. Under manager Mike Thornbury the team delivered great solutions and seemed capable of solving every issue they were confronted with. And the computing environment and tools they had to work with were primitive compared with today. “I can’t help but wonder what happened to that level of expertise and skill, that an organisation that could build Jetbet now relies on external software providers at the cost of an arm and a leg.” Like Ken Rutherford, pictured, Johnstone experienced an erosion of the TAB culture. Erosion of culture Johnstone said just as Rutherford described an erosion of the culture he experienced at the TAB when head of sports betting (in his interview with Lincoln Farms), he too experienced the change and was happy to move on during the first wave of redundancies in 1993. “Rutherford talked of the external executives that have regularly come and gone, and their failure to truly understand the drivers of wagering. “I can only conclude that the “old” TAB culture I revered was in many ways superior. People were well paid, yes, but not compared with the exorbitant packages of today. “More importantly, I think, there was much less external recruiting - the majority of appointments were internal, and thus people in most roles were thoroughly conversant with the culture, they certainly understood wagering, and they knew the strengths and weaknesses of their colleagues. “Maybe there was an element of “time serving” in some cases, but most of the people I worked with cared deeply about the industry and the role they played within it. I’m certainly not convinced that the change has been beneficial, and the financial evidence would seem to bear that out.” Most of the TAB’s half yearly reports in the last two decades have been delivered in March, and the latest was on May 1, in 2017. A $3.2 million blunder with bonus bets delayed this year’s report and it has still not been published. “It must be truly dreadful to remain hidden from public view,” says Johnstone. COVID accelerator Johnstone says rather than COVID-19 being responsible for the TAB’s current troubles, it has merely accelerated the day of reckoning. “It had to be coming anyway. The 2019 annual report already showed an organisation that was technically insolvent, with $35 million of borrowings (after never being in a position where it showed end of year borrowings before 2018). “For the third year in a row, total cash flow for the organisation was negative, and total equity had fallen to less than $25 million, whereas in the late 2000s it had exceeded $100 million. “In this light it is notable that RITA’s website still has no six monthly report for the current year. It is now weeks overdue and my guess is that it must be truly dreadful to remain hidden from public view. “The government recently “saved” the TAB and hence the racing industry with a multi-million dollar bailout. “But in view of what I can see from the publicly available figures, I question whether this will be enough. With many of the TAB’s recently announced cost cutting measures potentially threatening to further erode the turnover base (especially in the biggest revenue generator of racing) the industry will remain in a parlous situation for the foreseeable future and it would seem that only continued government support will keep it alive.” It’s a far cry from the days when Johnstone was responsible for investing the TAB’s profits in the money markets. “There used to be a torrent of cash in those days and it was when we earned interest rates of 20% plus.”

Outcome [50] We have had regard to the totality of the penalties imposed and are satisfied that the final penalty of a fine of $3750 is not excessive. In so determining, we have had regard to the fact that r 505(2) declares a breach of r 505(1) to be a serious racing offence. Soft gloves.

What a fitting race. Racing minister goes out hard, settles just behind the leader, goes and has a look for the lead(ership) , reluctantly pulls back to 3 back, sits there confused, goes hard for the lead again, makes it, destroys the leader in the process, takes off thinking he is way better than he thinks he is but plods home for second. Just like real life.

The good ship TAB seems to be getting closer to that iceberg. http://www.theoptimist.site/ TAB possibly worst run business in New Zealand by Brian de Lore Published 5th June 2020 If you have a successful business you’re looking to run into the ground and send broke, the New Zealand TAB has almost completed writing the perfect blueprint, but don’t call its helpline for the recipe because it’s become famous for providing no help. In fact, the helpline at the TAB has brought to light numerous recent stories of the phone ringing unanswered or operators arguing with disgruntled punters rather than appeasing them, and even hanging it in their ear. Punters consulted to write this blog produced one who claimed eight of his previous ten calls to the helpline had gone unanswered. An overabundance of stories about the poor treatment of customers and a reduction in services can only be a reflection of a leadership team that doesn’t care about the bottom-line result. Rumblings about a toxic culture within the walls of the TAB from various disgruntled TAB employees… It’s not a new thing. Rumblings about a toxic culture within the walls of the TAB from various disgruntled TAB employees have been audible most the way through the John Allen reign of terror, and since. Good people are known to have left voluntarily, and others who have expressed disagreement in policy direction have experienced the shove. And now, the customer interface which is where any successful organisation meets its customers and keeps them happy, has been dismantled to save around five percent of the TAB’s annual cost. The reason offered to The Optimist: Executive Chair Dean McKenzie didn’t tackle the problem of redundancies himself but gave the cost-cutting assignment to his executive team, hence Stephen Henry addressing the staff at redundancy meetings and not McKenzie himself. Any well-run organisation displaying strong leadership would have started with the executive team and worked its way down – not the other way around. The TAB has lost its way because it has focused on IT development with a strange, misguided and overblown self-belief they had the expertise to develop a FOB that would compete in the global wagering market. Vanity overcame logic, however, and the customer became the casualty. Strange is it not, that of all the businesses that should require extra careful customer attention, The TAB NZs focus on its VIP and Elite Customers while ignoring all us ‘mug punters’ has surely backfired with the loss of 35 percent of its customer base. Don’t accept that COVID-19 was the cause. John Allen: …the top 1.5 percent of our customers produce 56 percent of our turnover. Two and a half years ago, the then CEO John Allen said the most accurate thing he ever said: “We need new customers otherwise we are vulnerable to that very small number of elite customers – the top 1.5 percent of our customers produce 56 percent of our turnover. And they are being sought by every betting agency in the world.” Needing them and getting them were two separate destinations, but Allen never accepted that scale was against all his plans, and overseas IT development and massive marketing budgets were obstacles too big to conquer. Between Tabcorp and Australian betting operators, the spend on marketing is currently $300 million per annum. Allen should have heeded his own advice, which in reality, was the advice of his executive team because he didn’t know the business. But his executive team was made up of several former associates at NZ Post/Kiwibank brought with him from his days of NZ Post and a couple of relatively inexperienced employees from Tom Waterhouse Bookmaking in Sydney. Punters have never been loyal animals, and the depletion of customers has been across the board. Allen, at that time, also talked about his VIP customers: “the VIP customers who are very large punters – 20 or 30 of them around the world – they are betting on our products if we are competitive as long as they get all the data they require.” Sportsbet in Australia offered the same man a free $1,500 bet if he deposited $1,000. Offering substantial rebates to the biggest punters has proved a false economy, and it raises the question of how many of the VIPs remain? One of the Elite customers was this week offered a free $50 bet on the TAB NZ if he deposited $100 into his account. On the same day, Sportsbet in Australia offered the same man a free $1,500 bet if he deposited $1,000. Who’s winning that battle? The so-called ‘mug punters’ now have no weekly printed formguide to purchase, no radio trackside interviews and talkback, a FOB platform that offers poor odds on a poorly designed website that continually gets ‘hung,’ the closure of more TAB retail outlets and the promise of no live betting operators on-course but instead ‘betting pods’ or self-service terminals that are cumbersome to use and don’t payout. It’s hard to fathom why years ago the television exposure of racing to the general public was extinguished when Trackside went from free-to-air to pay-TV with the Sky package. How do you get new racegoers interested if the product isn’t free to view? Then consider that all telephone betting has ceased, including the exempted special cases, and TAB NZ is the only betting operator that charges a debit/credit card fee of $2.15 regardless of whether you deposit $10 or $100, and you reach the conclusion it must now be really managed by the Women’s Christian Temperance Union which has set out to discourage all betting. …two earn just under $300,000 while the other six earn over $300,000 and reputedly up to $620,000 But that was last week’s joke. This week we still have to consider that the people making these decisions are basically the same eight executives, of which two earn just under $300,000 while the other six earn over $300,000 and reputedly up to $620,000 (McKenzie). McKenzie said in his Update on May 26th, “An independent review of the structure of the Executive Leadership team is underway with consultation on any proposed changes expected to start next week.” Why an independent review? McKenzie is in the job and should by now have worked out how to run it on a shoestring, which he really should have had worked out a year ago. But if making a decision is the issue, then using a paid consultant is historically typical for this organisation. One former employee passed the comment that if the entire executive team stayed in bed for a month, it would not be detrimental to the TABs performance. The inference was that if the computer was operational, the business would run itself – and as good a cash business as the TAB could be, it was only ever big enough to feed a few platoons, not an entire army. Getting the customers back and revenue up to a sustainable level is problematic. COVID-19 has interrupted racing and changed habits, which may never result in a return to our former ways and, in particular relevance to racing, betting practices. Punters have generally concluded they are getting no service and a lousy deal from TAB NZ, and anecdotally the evidence suggests they are looking off-shore in greater numbers. The saving grace could be the content of the legislation which will be tabled in parliament early next week The saving grace could be the content of the legislation which will be tabled in parliament early next week and hopefully get its second reading soon after that. If the rewrite favours the consensus of the almost 1,000 submissions and is passed into law by July 1st as scheduled, racing gets its chance to see the early exit of RITA and the implementation of some positive changes. A throng of stars needs to align for that rare possibility of hope to become a reality. But while Minister Peters did renew RITA for a further year in a statement he released on Wednesday, when the same announcement appeared on the RITA website later that same day, the caveat on the renewal of RITA appeared in a footnote. The footnote stated: “The Directors’ terms will end on the enactment of the Racing Industry Bill or on 30 June 2021 – whichever comes first.” The enactment of the Bill is imminent if we are to get a second reading next week. The Select Committee wasn’t available for comment this week because, under its protocols, it is inappropriate to make comments before the legislation comes up for its second reading. But in previous conversations with both National Select Committee members Andrew Bayly and Ian McKelvie (Shadow Minister for Racing), they are positive about the content. All this means nothing, however, if an under-performing TAB on the top of RITAs $47 million debt to the ASB Bank trivialises racing in the coming season, because of NZRB/RITAs point-blank refusal to properly investigate the outsourcing/partnering of the TAB and restructuring as outlined in the Messara Review two years ago. The Review clearly warned the Minister and all of New Zealand that it didn’t have the luxury of waiting, but that warning went unheeded, and today New Zealand racing is paying the price.

I thought he might have been asked to explain his drive by the stipes. All it would take is a quick explanation and the matter is dealt with, but no.

Seems the grassroots participants are fronting up in areas where the TAB dumped. How come there is TAB Form for Addington tomorrow and not Invercargill?

pay the tote those two performing at the same time.

(e) His disqualification penalty is disproportionate to a penalty of suspension imposed on another harness racing driver for an improper driving offence. He got whacked with a lengthy sentence of 2 years and 6 months. What did McGrath get for his drive? The Tribunal said that the offending struck at the heart of the integrity of the Code, and damaged its reputation with the community, being seriously dishonest. They can make that decison but if anything sticks in INCA then those participants should / will be receiving similar penalties.

Big Phil has a gambling problem so he wouldn't want to punt on Majestic Man and all his hard luck stories.

What the hell was that in the trot? The whole lot follow Majestic Man wide! If Phoebe Onyx had won I wonder if she would have got chucked for hitting the markers after the precedent set down set. Matua Tana has come of age. Holy heck.

Not sure what to say about that drive. Go to the lead easy. Give it up and sit there in a walking pace. Go 3 back and get left behind. Yeah. Confused by the timidness of it all considering Gavin Smith is hardly a timid driver.

Whatever the outcome of INCA there will seemingly be bad blood well after its conclusion.

What has he said?

What else happened on the day? How did proceedings go?

Be paying $1.01 on the final field.

Bullshit riddles.

If you don't listen to people like Greg O'Connor during the 'consultation' process then you never wanted to hear anything anyway. Yet again, it seems like the those who are truly invested in the game get beaten out by the bean counters and fat salary earners who only want to look after their own nest.

All the credible people are gone. A cold environment he says? Well, the TAB have wrecked any reason to be on course so he is quite correct in his statement. RITA and their blazing cost cutting to the raceday need to f**k off. Will be lights out soon. https://www.lincolnfarms.co.nz/stories/racing-loses-its-top-presenter-greg-oconnor-sitting-in-the-studio-just-doesnt-cut-it/ Racing loses its top presenter Greg O’Connor - sitting in the studio just doesn’t cut it By Barry Lichter • 3 June 2020 Every day for the last 10 years that he’s been at Trackside, Greg O’Connor says he’s never felt like he was going to work. New Zealand racing’s greatest presenter thought he was blessed to be doing what he loved, bringing the emotion-charged stories of racing to the viewers. But sitting in a studio, 250 metres from Addington raceway last week, the stark reality of his future struck home. And it wasn’t one that he liked. So today he became the latest victim of the TAB’s demolition of its broadcasting arm, opting to take redundancy. “It’s just not working for me now,” says O’Connor, 47. “It hit home that night when Blair (Orange) drove his 2000th winner and I wasn’t there to capture the moment. I was sitting in a cold environment thinking this is what it’s going to be like from now. “It’s never felt like work for me but it does now. I’ve loved getting out and about and telling the stories of the industry but all of the tools we’ve had are no longer available and none of the team are here any more.” With the Racing Industry Transition Agency having all but stopped presenters working on course and dismantled their production crews, O’Connor says he’s virtually a “Lone Ranger” now. Harness racing’s top three presenters, from left, Craig “The Whale” Thompson, Mick Guerin and now Greg O’Connor have all gone as a result of the TAB’s drastic cost-cutting. “Whale’s gone, and he was the biggest driver of turnover, Mick Guerin’s gone and so is Maryanne Twentyman who had vast experience in broadcasting and gave me the confidence to be able to do it.” Not for O’Connor the drudgery of reading out the dividends for the next race at some obscure venue in Australia. “When you’ve had what I’ve had, it’s a big drop and change. Some can accept it and keep taking the money but I’m not one of them. “I like helping people and am passionate about what I do -whether it’s interviewing a new driver and helping develop them or helping a racing club using the expertise I’ve picked up in the last 25 years.” O’Connor is sad that he won’t be able to tell heartfelt stories like Terrill Charles’ win in the 2019 New Zealand Cup with Dee And Gee, which came two years after she was diagnosed with cancer. He won’t miss the terrible day when he had to announce on air that jockey Ashlee Mundy had died. But he will miss the good times he’s shared with some of his friends - like covering Todd Mitchell’s fourth New Zealand Trotting Cup win, or Tony Shaw’s Cup win with Yulestar, or their Interdominion triumph. “Those are the moments that bring people to the races, rather than just those who want to back horses race to race. “But when we’re not on track and when all your tools aren’t there, how do you tell those stories and how do you increase turnover?” O’Connor says his own suggestions, and those of his colleagues fell on deaf ears during the consultation process, and nothing changed. “I’m hopeful the hierarchy might recognise how important that coverage is at some stage. Once it’s gone you can’t relive it. “Am I sad I won’t be part of that process any longer? Of course. I’ve tried to portray the image of harness racing as a great sport, and I genuinely believe it is. “But while the decision to go wasn’t an easy one, it’s the right one for me and the family and the timing is right. “My wife Karen has a team of 10 young horses and after my dad passed away a couple of years ago, she needs a hand. There’s a fair bit of shit to pick up every day. “And honestly another big part of my decision is that I don’t want to miss my kids growing up. Greg O’Connor in his most recognised role on track - interviewing winning driver Mark Jones after his Dominion Handicap win behind Master Lavros.“Every Friday night I was going to be stuck in the studio covering Addington and that’s when Flynn plays football. He’s nearly 15, is a pretty handy player and I want to watch his games.” O’Connor was absent, covering the Interdominion Finals last year when his daughter Maia, 15, was dancing in her end of year production. O’Connor says he’s lucky that he’s reasonably secure financially, and while he’ll definitely need a job, he doesn’t have to rush into one. “That’s what COVID’s done for all of us, we’ve been able to take a step back and reassess things. “I’d be keen to get back into administration and I know there’s a job coming up at Addington that hasn’t been listed yet and if that happened, I’d certainly be happy.” O’Connor has years of experience in marketing and promotion, spending the best part of the 1990s at Addington, before a three year stint at Harness Racing New Zealand and time at Jade Stadium as its commercial and marketing manager. “I would have been at Trackside 10 years in August and I’ve loved every minute of it. I’ve had a great run and there are no regrets.” It’s the racing industry that will regret O’Connor’s loss. His unflappable nature, knowledge of both harness and gallops and it’s players was unmatched.

what is the story there?

Makes 2 people on the money. A burgeoning club but entry is still harder than getting on the ballot at an Auckland trotting meeting.

Maybe 4 races could be run of a decent size. They have extended the nominations so will be interesting to see what they do. Tiny fields to make races?

Be off to hang out with Dexter most likely. Australia is the same as NZ.