RITA's Response To Trainers Association

[Chief Stipe]

30 April 2020

NZ Trainers’ Association Inc

nztrainersassn@gmail.com

PO Box 300-073, Albany, 0752

To the Executive and Branches of the NZ Trainers’ Association Inc

Response to NZTA Letter of 22 April

Further to your letter to the Board of RITA last week, the Board discussed the questions contained in the correspondance at its meeting yesterday and herewith provide information to address the relevant points as best we can.

——————————

Is RITA a solvent organisation that can continue to fund its operating expenses and guarantee distributions to the codes?

and

When will RITA be able to give certainty to the Codes around their distributions for the coming season?

The impact of Covid19 has had a material impact on revenue at the TAB and presented immediate cashflow challenges in light of product availability being down 80%, revenue down 40% and customer numbers down about 35% (when compared with pre-Covid19). This impact is evident internationally across all wagering operators and the New Zealand TAB has not been spared in this.

Thankfully, we have managed to weather the first wave of financial pressure but significant work remains to be done. As you will know, we have remained operating through the pandemic which has been hugely positive and has certainly helped to mitigate our possible worst case scenario, ie that being no major sport, no domestic racing and no Australian racing.

RITA have been actively engaged with the Racing Minister’s office and his officials since the onset of impacts of Covid19 in March. We have outlined the expected impact of Covid19 on the TAB business, and the resulting impacts of reduced revenue on RITA, the Codes, and all participants who derive their livelihoods from racing.

While we have undertaken significant measures to reduce our costs to help lessen this dramatic loss of revenue, the scale of this event is such that it has necessitated an approach to the Government about options for supporting the racing industry going forward and included availing of the Government’s wage subsidy initiative. This process is ongoing and we expect an announcement on progress will be made at the appropriate time.

We appreciate that the wider industry has also foregone revenue during this time, and that the level of stakes are of high interest, however the reality is that it is very difficult to accurately model the amount of funding we can distribute to the industry.

We have, however, been working closely with your governing body, NZTR, over the past week to develop an assessment off the back of the proposed racing calendar for May to July and based on Government confirmation of our ability to resume racing. You will be pleased to know that we have confirmed total funding to the thoroughbred code for the remainder of the 2019/20 season at approximately 4.15pm yesterday afternoon, after our respective Boards met to confirm these earlier discussions and we understand that NZTR’s announcement around stakes etc. is imminent, now this has been finalised.

Once a calendar has been approved for 2020/21, which we hope will be in place prior to the resumption of harness racing at the end of May, we will be in the position to indicate funding levels for next season.

We appreciate that many of your stakeholders want certainty of returns from August through to July next year, but the simple reality is that no New Zealand sector can confidently predict what the next 15 months will look like.

The complexities we have referred to extend past the obvious critical confirmation of domestic racing dates but also extend into the uncertainty in the reopening of our gaming operations in our TAB’s (which fund integrity), the resumption of high turnover sporting product and the continuation/resumption of overseas racing. All of these carry considerable revenue risk for us when making assumptions for the future. Unfortunately we just can’t answer these questions right at this time.

What measures have been put in place to reduce costs?

and

Many other organisations have made public announcements around redundancies and wage reductions. We have had no such guidance from RITA on this.

We have included below an extract from our industry comms dated 19 April which outlines a list of the initiatives underway as part of our ongoing review of costs.

Specific actions taken to date include:

●  Pre Alert Level 4 (March 22)●  A total recruitment freeze and a hold on RITA’s contract with its recruitment partner put in place;●  Oncourse presenters moved to present from studio●  Use of non-essential contractors and casuals ceased●  Staff travel and payment of certain discretionary allowances stopped (including overtime)●  All non-essential expenditure ceased●  Presenter-led Trackside shows cancelled●  Trackside radio moved to simulcast of Trackside Television●  Post Alert Level 4 (March 23 to current)●  More than 3,400 leave days approved for the period through to the end of 2020 following a request for all TAB employees to use entitled annual or alternative leave●  All staff asked to consider taking voluntary unpaid leave or reduced hours●  Reduction in remuneration for RITA Board, Executive Chair and Executive Management Team●  Trackside radio programming on AM and FM suspended on April 12●  Trackside production scaled down with programming largely replaced with a live feed of Sky Australia coverage● Active negotiations with landlords, suppliers and other services to secure relief or amended conditions●  Accessed the Government’s wage subsidy programme●  All non-essential capital expenditure on hold through to 30 June 2020 (at the earliest) In addition to the above steps, we also informed our staff on April 20 that a deeper review of the business is underway to ensure we can respond to the impact of Covid19. We will provide information to the industry on this in due course in the near future.

The RIU is considered a bloated and inefficient organisation. What steps are underway to reduce their cost to the industry?

The operations of the RIU, JCA and the Racing Lab have also been impacted by COVID-19 with funding of integrity having stopped in light of there being no Class 4 gaming activity under Alert levels 3 and 4. As a result of our retail network being closed, the ongoing funding of integrity, in the short term at least, has become an additional expense that must be funded via betting revenue.

In the last few weeks, these organisations have taken steps to reduce their costs and revised budgets have been prepared with significant changes, with forecasted savings of approximately $1m through the remainder of the 2019/20 season. We continue to work with these organisations to become as efficient as possible. This will be ongoing.

Are RITA looking closely at a Joint Venture partner to unlock the value left in the current business?

As late as mid March the Board advanced discussions to further consider potential partnering opportunities and we continue to work under the direction of the Minister in that regard. Covid-19 however has put this work on hold over the past six weeks as we (and the parties we’ve been in discussion with) have been dealing with the pandemic. It is also worth noting that any progress to actively move this forward is dependent on the progression of the Racing Industry Bill.

When is the Racing Reform Bill likely to be enacted?

Currently, the Racing Industry Bill has a proposed enactment date of 1 July 2020. The Bill was at the Select Committee stage when Covid-19 restrictions meant that Parliament wasn’t able to conduct normal business. The Technology and Infrastructure Select Committee’s original date for reporting back to the House was 17 April – this has now been extended to 1 June 2020. The timetable for consideration of the Bill (and all legislation) is determined by the whole of Parliament and will be subject to a range of considerations, however we understand that the passing of this Bill remains a priority for this Government.

When will there be clarity regarding ownership of the TAB?

We have not seen any formal proposals from the Government to determine the ownership of the TAB. This was not addressed in the Messara Report and RITA (or MAC) have not been asked to consider this issue. However, under the existing Racing Act, it is clear that the racing industry is the ultimate recipient of profits of the TAB – this position is unchanged in the Racing Industry Bill.

Finally, we hope that this letter assists in answering your questions. As you know, RITA is currently meeting with your code body, NZTR, every second day to ensure it is kept up to date on all matters relating to the TAB business and the resumption of racing. Through the information arising from these meetings and RITA’s regular industry updates, we will endeavour to continue to keep your Association as informed and up to date as possible.

Yours sincerely,

Dean McKenzieExecutive Chair (for and on behalf of the Board) Racing Industry Transition Agency

[Mark D]

Got to "herewith".  Appropriate thay should use such an outdated and pompous word

[Freda]

Amazing that such a wordy document can say so little.

[Chief Stipe]

Michael Guerin: Winston Peters losing patience with racing's infighting as ruling body set to make dramatic cost cuts

2 May, 2020 6:00am

 4 minutes to read

The Racing Industry Transition Agency have been under attack from many sectors. Photo / Getty

NZ Herald

 

By: Michael Guerin

 

 

 

 

 

 

 

 

 

 

COMMENT:

The boss of New Zealand racing — Deputy Prime Minister and Minister of Racing Winston Peters — has finally spoken out and it would appear he is losing his patience with the industry's relentless in-fighting.

Peters has kept his public comments about the racing industry brief during lockdown but suggested this week there could be Government support for the struggling industry in coming weeks, possibly announced as part of the May 14 Budget.

 

Peters has put his weight behind the Racing Industry Transition Agency (RITA, the board running the TAB) even though they have been under attack from many sectors.

 

Those attacks eased, for a while at least, on Thursday when the codes were able to announce satisfactory stakes levels for the remainder of the season. The stakes are not great but about the best that could be hoped for in the middle of a worldwide crisis.

The nonsensical talk of $5000 stakes, the TAB being insolvent and trainers striking may disappear for a while. The racing industry has many problems and one of the worst is constantly publicly shooting itself in the foot.

Peters is the single most important person standing between racing recovering and then improving, or basically being stuffed. Correspondence obtained by the Weekend Herald shows he is firmly backing RITA's actions and thinks the industry has been living beyond its means.

A respected industry employee wrote to Peters three times over recent months and received a reply on Thursday signed by the Minister which leaves little room for argument about where his loyalty lies.

"RITA inherited a structure which frankly has been living beyond its means for a number of years," wrote Peters.

"It faces the unenviable task of addressing that issue while negotiating all the implications of the Covid-19 crisis.

 

"Unfortunately some voices in the industry blame RITA for the problems they have inherited.

"This is unproductive. And we don't intend to stand by silent to such criticism when that criticism lays properly somewhere else.

 

"The Government will provide the industry with all the necessary tools to determine its future. However, collaboration and leadership from all levels of the industry are needed ..."

 

Minister of Racing Winston Peters has thrown his support behind RITA as he tires of the industry's infighting. Photo / Trish Dunell

The letter also backs the directors of RITA and suggests the Racing Bill could be back in front of Parliament before long.

Weekend Herald sources are suggesting it could be passed into law before the election which would, depending on the amendments suggested by the select committee, give racing more power to get things done.

So Peters is clearly not in the mood for the tail to be wagging the dog and its appears those who are, at best questioning or at worst undermining RITA, are also going up against the minister.

Two of the key issues for RITA, apart from the obvious lack of money and a worldwide pandemic, has been poor communication and outrage from industry participants over their staff levels and therefore expenditure.

Both are justified.

A recent letter from the Trainers' Association to RITA was handled poorly and often communication to the industry has been so complicated and full of corporate jargon. The people it is aimed at informing have no idea what it means.

RITA have also been purposely vague so as not to annoy other political forces while the racing industry applies for a support package. If that is granted, it isn't to prop up RITA, but support the codes.

It would be a prudent idea for the racing industry to present a united front as they are asking for Government help. And as for RITA's top-heavy expenses, it is now certain there will be a significant reduction in costs, including many redundancies inside the business.

RITA bosses are refusing to comment but it is definitely going to happen, with heads of departments already reporting on how they can achieve those savings, including staff cuts.

As for the hot-button issue of out-sourcing?

That is still on the horizon but with so much global uncertainty the major potential partners won't be negotiating hard deals any time soon. Implementation of any out-sourcing deal, if it happens, would be at least two years away and only if the Government of the day has an appetite for it.

But what Peters seems to have more of an appetite for is racing presenting a united front, especially as it joins the long queue of struggling industries seeking help.

 

 

 

[JJ Flash]

 Questions were asked and answered, but will it be enough, i doubt it .

In the interim , who do you think is doing all the undermining. You get one guess each

1 hour ago, Chief Stipe said:

A respected industry employee wrote to Peters three times over recent months and received a reply on Thursday signed by the Minister which leaves little room for argument about where his loyalty lies.

 

Greg

[JJ Flash]

4 hours ago, Freda said:

Amazing that such a wordy document can say so little.

Usually the case when you dont like the answers ??

 

Greg

[Chief Stipe]

8 minutes ago, JJ Flash said:

 Questions were asked and answered, but will it be enough, i doubt it .

In the interim , who do you think is doing all the undermining. You get one guess each

 

Greg

Not you.  

[curious]

What undermining? Asking questions that should and hopefully could be answered is not undermining. Not answering the questions is what is undermining and that is primarily the Minister, RITA and NZTR CEOs and their boards' doing.

Edited May 3, 2020 by curious

[JJ Flash]

2 hours ago, Chief Stipe said:

Not you.  

Correct. Do you like the bit about reduced costs

 

4 hours ago, Chief Stipe said:

"RITA inherited a structure which frankly has been living beyond its means for a number of years," wrote Peters

Thats been my base case for months and is being addressed, but unlikely to satisfy all participants

 

4 hours ago, Chief Stipe said:

And as for RITA's top-heavy expenses, it is now certain there will be a significant reduction in costs, including many redundancies inside the business.

Already well underway but my sources say a lot more in the pipeline- that should please you chief. Unlike NZRB under RITA's mandate it is under no obligation to provide similar like for like reports.

 

 

Greg

[JJ Flash]

9 minutes ago, curious said:

What undermining? Asking questions that should and hopefully could be answered is not undermining. Not answering the questions is what is undermining and that is primarily the Minister, RITA and NZTR CEOs and their boards' doing.

I like how you play one case here and the other on another site. Do you ever get confused?

I thought you were up with the play re behind the scenes politics but obviously not

 

Greg

[curious]

2 minutes ago, JJ Flash said:

I like how you play one case here and the other on another site. Do you ever get confused?

I thought you were up with the play re behind the scenes politics but obviously not

 

Greg

You'll have to explain. I thought I was quite consistent. Thanks.

[JJ Flash]

1 minute ago, curious said:

You'll have to explain. I thought I was quite consistent. Thanks.

Nah , enough out there now playing silly games.

 

Greg

[mardigras]

1 minute ago, JJ Flash said:

Nah , enough out there now playing silly games.

 

Greg

You got that right. Reading this thread and you are clearly playing silly games. I think that is what you do.

[JJ Flash]

2 minutes ago, mardigras said:

You got that right. Reading this thread and you are clearly playing silly games. I think that is what you do.

You need to change hands every now and then Rod if thats the best you can offer. I was referring to some at NZTR

 

Greg

Edited May 3, 2020 by JJ Flash

[mardigras]

4 minutes ago, JJ Flash said:

You need to change hands every now and then Rod if thats the best you can offer. I was referring to some at NZTR

 

Greg

I'm not trying to offer anything other than what I did. I've read this thread and your posts are just playing silly games. That was all I needed to offer on the topic.

Edited May 3, 2020 by mardigras

[JJ Flash]

Just now, mardigras said:

I'm not trying to offer anything. I've read this thread and your posts are just playing silly games. That was all I needed to offer on the topic.

Solution , dont read them.

 

Greg

[curious]

1 minute ago, JJ Flash said:

Solution , dont read them.

 

Greg

That's like what we are getting. Don't ask questions cos we won't answer them anyway. Who are you an apologist for in particular Greg?

[Chief Stipe]

25 minutes ago, JJ Flash said:

Already well underway but my sources say a lot more in the pipeline- that should please you chief. Unlike NZRB under RITA's mandate it is under no obligation to provide similar like for like reports.

Can you confirm that the Minister of Racing, the CEO/Chairman of RITA and the RITA Board will not be releasing a half yearly report for 2019/20?

 

[Huey]

28 minutes ago, JJ Flash said:

Correct. Do you like the bit about reduced costs

 

Thats been my base case for months and is being addressed, but unlikely to satisfy all participants

 

Already well underway but my sources say a lot more in the pipeline- that should please you chief. Unlike NZRB under RITA's mandate it is under no obligation to provide similar like for like reports.

 

 

Greg

Does make you wonder if the TAB would have got a sort out if not for the Chinese virus?

[Reefton]

Suspect the Racing Industry is pissing in the wind thinking it will get money or even tax relief in this environment.  Jacinda and co have vastly more important priorities than further propping up an industry they have already given plenty.  The public reaction to giving more to the perceived fat cats in the racing industry would be outrage.  Especially given Trainers and other racing businesses have had access ro the same help other businesses have.  

It is not, despite what the current lolly scramble might suggest, a bottomless cheque book

[curious]

1 hour ago, Reefton said:

Suspect the Racing Industry is pissing in the wind thinking it will get money or even tax relief in this environment.  Jacinda and co have vastly more important priorities than further propping up an industry they have already given plenty.  The public reaction to giving more to the perceived fat cats in the racing industry would be outrage.  Especially given Trainers and other racing businesses have had access ro the same help other businesses have.  

It is not, despite what the current lolly scramble might suggest, a bottomless cheque book

Exactly. And they are now looking at orienting advantaged assistance to viable businesses that might reasonably be expected to ba able to pay back the $s. Rightly so IMO.

[Kopia]

2 hours ago, Reefton said:

Suspect the Racing Industry is pissing in the wind thinking it will get money or even tax relief in this environment.  Jacinda and co have vastly more important priorities than further propping up an industry they have already given plenty.  The public reaction to giving more to the perceived fat cats in the racing industry would be outrage.  Especially given Trainers and other racing businesses have had access ro the same help other businesses have.  

It is not, despite what the current lolly scramble might suggest, a bottomless cheque book

You have to wonder when reality will hit home with ardern and her cronies. $56m for Maori 'they have special needs' " Another $100m for homeless to live in motels, supplied with food, Skytv, etc etc'...racing is way down on the list, probably, as you say not on the list. Not enough votes for mother theresa.

[Freda]

17 hours ago, JJ Flash said:

Usually the case when you dont like the answers ??

 

Greg

If you think that response said anything bar meaningless waffle that has been heard before,  you need to go to specsavers - or brush up your comprehension.

[Chief Stipe]

11 hours ago, curious said:

Exactly. And they are now looking at orienting advantaged assistance to viable businesses that might reasonably be expected to ba able to pay back the $s. Rightly so IMO.

Since when has Government been good at choosing winners?

[Reefton]

13 hours ago, curious said:

Exactly. And they are now looking at orienting advantaged assistance to viable businesses that might reasonably be expected to ba able to pay back the $s. Rightly so IMO.

And dear oh dear they have dished money out without one tiny bit of assessment of whether the recipients actually need it.  Even a piddly Accounting firm like mine has plenty of millionaires with their snouts in the trough(and with my full encouragement I might add). And they include the $10k loan thing in the Tax Amendment Act last Friday by mistake??????.  Some of these pricks need a job running RITA/NZRB.

Plus the extra $25 a week for beneficiaries(I emphasize I do not want to beneficiary bash here but how much of that will be going on smokes and the pokies(or online gambling during the lockdown)).

WE CANT BLOODY AFFORD IT!!!!!!!!