January turnover:stakes data

[curious]

5 minutes ago, Chief Stipe said:

Yes but I showed some restraint in saying what I thought of it.  I'm disappointed that you think this graph has any meaning.

You would get the same line if you put Marketing Expenditure vs Turnover on the axis.  Or Turnover vs Expenditure.  

Well if you have better data or analysis on the correlation between turnover and stakes supporting your view that they are unrelated, please post it.

At this point your restraint appears to be due to you having no evidence to the contrary.

Edited 11 hours ago by curious

[Chief Stipe]

5 minutes ago, hesi said:

Racing has to make sure it uses the money it does get wisely and putting it into races that generate a higher turnover is one avenue.  Yes, there are many others.

Focusing on Stakes vs Turnover is doomed to fail.  The focus should be on the fundamentals - providing safe tracks and facilities for horses to train and race on.  

[hesi]

Not so much a focus just on stakes/turnover

But stakes are the biggest cost to the industry and turnover is the biggest effective income to the industry, so it has to be the main focus.

Less money allocated to stakes would mean more money for infrastructure, just as higher turnover would

[Chief Stipe]

26 minutes ago, hesi said:

Not so much a focus just on stakes/turnover

But stakes are the biggest cost to the industry and turnover is the biggest effective income to the industry, so it has to be the main focus.

Less money allocated to stakes would mean more money for infrastructure, just as higher turnover would

Stakes have been the main focus for decades.  Increasing them has resulted in a loss in participation NOT an increase.  Perhaps @curious can post that two variable graph.

A bit like Clubs focussing on the Party rather than raising money to maintain their infrastructure.  They now expect the Industry to fund that instructure but the pot isn't big enough!

[Murray Fish]

2 minutes ago, Chief Stipe said:

They now expect the Industry to fund that instructure but the pot isn't big enough!

They being?  The big 7 clubs?

[Chief Stipe]

5 minutes ago, Murray Fish said:

They being?  The big 7 clubs?

All Clubs.  None of them are making enough to fund their maintenance.  Lets face it a 2000m turf track be it at a "BIG Club" or a "SMALL Club" has the same basic maintenance and renovation costs.  The only difference is if you race once or twice a year you can defer the renovation part.

[curious]

2 hours ago, Chief Stipe said:

Focusing on Stakes vs Turnover is doomed to fail.  The focus should be on the fundamentals - providing safe tracks and facilities for horses to train and race on.  

So, isn't wagering the primary source of revenue which funds safe tracks and facilities as well as stakes?

[curious]

58 minutes ago, Chief Stipe said:

Stakes have been the main focus for decades.  Increasing them has resulted in a loss in participation NOT an increase.  Perhaps @curious can post that two variable graph.

A bit like Clubs focussing on the Party rather than raising money to maintain their infrastructure.  They now expect the Industry to fund that instructure but the pot isn't big enough!

What measure of participation are you using when you say that?

[Chief Stipe]

40 minutes ago, curious said:

So, isn't wagering the primary source of revenue which funds safe tracks and facilities as well as stakes?

That's the flaw in the whole business model.  There isn't enough revenue from wagering and there is unlikely to be at least in the next 10 years to fund the Stakes and Capital wants of the Industry.  In fact there never has been enough revenue from wagering to fund ALL the racecourse maintenance AND stakes.  

Clubs cannot rely on wagering to fund themselves.  They need supplementary and complementary sources of revenue - particularly the latter.

[curious]

1 minute ago, Chief Stipe said:

That's the flaw in the whole business model.  There isn't enough revenue from wagering and there is unlikely to be at least in the next 10 years to fund the Stakes and Capital wants of the Industry.  In fact there never has been enough revenue from wagering to fund ALL the racecourse maintenance AND stakes.  

Clubs cannot rely on wagering to fund themselves.  They need supplementary and complementary sources of revenue - particularly the latter.

Why? Can't you just reduce stakes to a level that provides sufficient additional revenue for infrastructure. That's how it worked until 20 years ago.

[Chief Stipe]

11 minutes ago, curious said:

Why? Can't you just reduce stakes to a level that provides sufficient additional revenue for infrastructure. That's how it worked until 20 years ago.

You model fails on several levels.  As for it "working" twenty years ago - that is a myth.  I don't understand why you keep perpetuating it.

The fact is there wasn't enough money twenty years ago to fully fund track maintenance and rennovation.  It was deferred and deferred until the track systems have failed.

[curious]

15 minutes ago, Chief Stipe said:

You model fails on several levels.  As for it "working" twenty years ago - that is a myth.  I don't understand why you keep perpetuating it.

The fact is there wasn't enough money twenty years ago to fully fund track maintenance and rennovation.  It was deferred and deferred until the track systems have failed.

A lot of expenses may have been deferred but the industry lived within its means. Since then, we have increasingly paid out more to codes than we have earned, bankrupting the TAB and requiring a taxpayer bail out and the sale of that. As you noted above, more tracks with less racing required less frequent significant maintenance. I don't think the principle of living within our means and not having to beg steal and borrow to exist fails as a model.

If you have a better one, what is it?

Edited 7 hours ago by curious

[Chief Stipe]

6 minutes ago, curious said:

A lot of expenses may have been deferred but the industry lived within its means. Since then, we have increasingly paid out more to codes than we have earned, bankrupting the TAB and requiring a taxpayer bail out and the sale of that. As you noted above, more tracks with less racing required less frequent significant maintenance. I don't think the principle of living within our means and not having to beg steal and borrow to exist fails as a model.

If you have a better one, what is it?

If you are deferring maintenance of your core racing assets you are NOT living within your means.  Costs increased at a faster rate than revenue and maintenance kept being deferred.

Looking back I doubt the industry was ever living within its means.  The belief systems 50 years ago believed that our tracks would last forever just like we thought our crop, pasture and market garden systems would.  In the 80's and 90's they started to collapse.

[curious]

Hindsight is always 20/20. So, what is you better model for the next decade or two? Put it up so we can consider and debate it. I think you'd agree that the current and proposed ones don't and won't work.

[Chief Stipe]

41 minutes ago, curious said:

Hindsight is always 20/20. So, what is you better model for the next decade or two? Put it up so we can consider and debate it. I think you'd agree that the current and proposed ones don't and won't work.

I don't believe it is hindsight more head in the sand and Clubs running as Clubs not businesses.  

The Clubs that will surivive will have freehold land, low cost structures and the ability to earn other streams of revenue.  Ideally they will have training facilities.  They will be able to support at least 12 race meetings a year.

I thought the Mesara Report was close but too harsh.  Now after seeing the financials for the TAB and what was needed to bail it out coupled with visiting a few more racecourses in the last year I don't believe the Mesara Report went far enough.  I did think at one stage the industry could work a rotation model of racing but the fact is that Clubs are not cooperative enough and are too financially constrained to work like that.

[curious]

So that would rule out clubs like the CJC because it doesn't operate on freehold land of its own?

Aside from that though, how do you see that your proposal would improve industry revenue?

[Chief Stipe]

2 hours ago, curious said:

So that would rule out clubs like the CJC because it doesn't operate on freehold land of its own?

Aside from that though, how do you see that your proposal would improve industry revenue?

No that Freehold land was one of the factors not the complete picture nor did I rank the relative importance.  That said CJC seem to have a more secure location than the likes of New Plymouth.  

As for you second question you miss the point.  It is incumbent on each and ever club to maintain their own infrastructure.  Not many are doing it.

[curious]

15 minutes ago, Chief Stipe said:

No that Freehold land was one of the factors not the complete picture nor did I rank the relative importance.  That said CJC seem to have a more secure location than the likes of New Plymouth.  

As for you second question you miss the point.  It is incumbent on each and ever club to maintain their own infrastructure.  Not many are doing it.

Because it is incumbent on NZTR to fund that and they don't.

[Chief Stipe]

27 minutes ago, curious said:

Because it is incumbent on NZTR to fund that and they don't.

Why is it incumbent?  If it is then NZTR have the option of choosing WHO they fund using the limited amount of funds they have.

Next you will be saying it is incumbent on the NZ Taxpayer to fund your hobby.

[curious]

Well it used to be funded by clubs themselves from their wagering revenue. Since bulk funding came in, NZTR now distribute that to clubs, however they have dictated that funding be used almost entirely for stakes, thus removing clubs' funding for infrastructure.

[Chief Stipe]

54 minutes ago, curious said:

Well it used to be funded by clubs themselves from their wagering revenue. Since bulk funding came in, NZTR now distribute that to clubs, however they have dictated that funding be used almost entirely for stakes, thus removing clubs' funding for infrastructure.

Regardless of how it was funded it was never enough.  Clubs needed to get alternative revenue.

The whole Club funding model is crap.  Make the stakes portion of the wagering revenue contestable based on a number of key metrics.

However a Club still needs other sources of revenue.

Your model would only fund less than 10 racecourses IF they didnt have other sources of funding.