Join the dots.
NZTA is funded by NZTR greater than 80% of their revenue the rest of their income comes from sponsorship. We can guess where that portion is sourced from.
97% of NZTR's funding is from RITA (includes the claw back from racing clubs). That's $88m. $73m (83%) is paid to the clubs by NZTR.
Of that $73m $56m is paid out in Stakes. That means $17m is paid to clubs to fund their operational costs. Are the clubs still getting funding via the daisy chain? If not some of the big ones must be suffering severe financial stress. The irony is that the small clubs who have been getting very little are probably not so stressed.
Can you see the stack of cards building here?
Now neither RITA nor NZTR have slashed their costs during Covid-19. We know that RITA's sources of funding has been slashed. ZERO from Pokies, close to ZERO from Sports. It has been argued by some that RITA was trading insolvent BEFORE Covid-19. Therefore the same could be said for NZTR.
NZTR has annually $4m in direct salary/wage costs. If we divide that by 4 to get what is paid over 12 weeks (the Covid-19 wage subsidy) it equates to $1m. Under the rules NZTR have to pay at least 80% of what they normally pay to get the subsidy i.e. $800,000. BUT we have not heard of any major pay cuts. So it would be a fair assumption that the wage bill is closer to $1m that $800k. Subtract the $278k the got from the subsidy and you have a bill of $722k for the 12 week period. That HAS to come from RITA!
Now apply the same analysis to RITA. It wouldn't be too far from the mark to say that RITA have exhausted all their lines of credit BEFORE Covid-19. They only way they could raise more capital for operational expense is to get a loan or rock solid guarantee from the Government.
The Staff costs for RITA for 2019 was $62m. We haven't seen any major redundancies nor pay cuts. So divide by 4 and we have a 12 week staff bill of $15.5m. We've seen no evidence that RITA has dropped what they are paying to staff to the 80% minimum. Subtract the subsidy of $4m and you still have a staff bill of $11.5m.
NZTR + RITA = Staff bill for 12 weeks of subsidy $12.2m.
Now add RIU Limited. Funded by RITA through another daisy chain that involves the code organisations. We are led to believe that most of the funding has come from Pokies. That source is now ZERO. They received $6.6m from this source in 2019.
Well it is hard to find an annual report for the RIU. Their website has a 2016-17 report but it has no financial information in it.
The RIU claimed $477k in subsidy. That is 1.72 times the NZTR claim. So extrapolating that it would indicate that the RIU staff cost for the total 12 week period is around $722k x 1.7 = $1.23m.
Total bill for the 12 weeks NZTR + RITA + RIU = $13.43m.
We could extend this to include HRNZ and GRNZ.
The RIU liability will fall back on each of the shareholders.
