Another dumb plan from the man bernard saundry

[Nostradamus]

 

 

No images? Click here http://i1.cmail20.com/ei/r/08/E4F/00D/135056/csfinal/NZTR-banner-9900000000079e3c.jpg Dear Valued Owner, Following consultation with clubs and RIOs regarding paying back to 14th, the NZTR Board has decided to maintain the current prizemoney policy from 1 February 2021, with an amendment for races worth more than $15,000. The continuation of the policy to pay back to 14th gained strong support from the Racing Club Advisory Group, which recognised the flexibility this provided regarding adding races where demand required.  However, there was also acknowledgement of the fact that there may be a better way to distribute prizemoney to reward those filling minor placings. Currently prizemoney is distributed by the following formula: 1st – 54% 2nd – 15% 3rd – 7% 4th – 4% 5th to 14th – 2% This formula will remain for races $15,000 or under. From 1 February 2021, in races with stakes of $15,001 or above, the distribution will be: 1st – 54% 2nd – 17.5% 3rd – 8.5% 4th – 5% 5th-14th – 1.5% While consideration was given to applying this formula across the board, it was noted that owners finishing 5th-14th in $10,000 races would have to be billed for the small difference between their share of the stake and their riders’ fee. From 1 February riding fees increase to $160.  The current 2% distribution would ensure the riding fee would be covered. When a race has a starting limit of 14 or more, but there are fewer than 14 runners, the prizemoney for the placings not filled is retained by NZTR.  This prizemoney saved has, thus far, been used to help fund over 50 races which have been added to the schedule, as well as the cost of two additional race meetings. Funding volatility is something which NZTR is extremely cognisant of, given that there is always the possibility of a further Covid-19 outbreak and/or deteriorating economic conditions.  While current customer betting and turnover trends are very positive, it may be 12 months or longer before the effect of a post-Covid recession as well as reduced TAB NZ marketing, promotional and other activity has on customer numbers and turnover across all of its offerings. The industry needs to be aware that TAB NZ has not underwritten a total amount to be paid to the codes this season, rather they have provided a budget of the funding it aims to pay.  We now exist in a funding structure where we are paid in arrears, rather than in advance and cover as much of what would otherwise be a negative cashflow position. Part of NZTR’s accountability and responsibility to the industry is to ensure the sustainability of the current stakes level and avoiding borrowing funds to pay for stakes, or worse having to reduce stakes mid-season.

[curious]

What's dumb about it?

[Nostradamus]

It really does add insult to the industry if there are fewer runners than 14 then those places are kept by nztr instead of adding it to the prize monies to be given, so therefore if 8 go to post 6 prizes will be depleted so a 15k race turns into a 13.5k race ??

[curious]

Gotcha. Although those funds will be redistributed in the form of extra races right?

 

[Nostradamus]

So if you enter your horse in a 15k advertised race 10 contenders turn up and then take that advertised stake away because it's not a full field, surely that's false advertising! You wouldn't play the lottery and because not enough played that Wednesday you can't win the jackpot 

[Nostradamus]

To add to that what happens if only 5 go to post in a group 1 nztr will take back 15% from the 200k advertised?? 

[curious]

16 minutes ago, Nostradamus said:

To add to that what happens if only 5 go to post in a group 1 nztr will take back 15% from the 200k advertised?? 

Yes but in all those cases the winner and placegetters will still get the advertised stakes for their placing, just not any extra because of the smaller field.

[nomates]

Reduce the stake on all the over valued group races , then you can pay out the whole stake for that race plus they will have extra money for extra races , not that there is more races in relation to seasons past . Just another short sighted plan by BS and his cronies , like being smart enough to realize that it was a positive to pay a starters bonus but dumb enough to take it out of the winners prize , so now the winners of the vast majority of races in NZ , namely the 10k industry stake , so now the winner only gets 54% of the purse against the old 62.5% . 

The monies saved from reducing the higher end races would cover the extra starters bonus on top of the 10k , but no they take from the poor and keep giving to the big boys , when the industry is battling it's time for a complete overhaul of our race funding and group races . Take todays Wakefield , G2 100k , completely over valued race , never a G2 nor worth 100k , classic example of need for a change .

Will it happen , doubtful .

[Nostradamus]

The Wakefield was a very expensive maiden race today that's for sure.

Curious but where does that 15% go thats 30k still taken away from the prize monies advertised I just used a group 1 as an example, now you take $1500 from a 10k race it's and 3k from a 20k and so on so who really is winning this down fall 

Edited December 5, 2020 by Nostradamus

[Freda]

I'm wondering how long it will be before our pattern races are seen in their true light and rated accordingly.

Throwing money that is taken from the bottom end, at these poor excuses doesn't make the quality any better.

[Chief Stipe]

You can't say the Captain Cook was a true $200k Grp1 either.

[curious]

As long as the money that is not paid out in an individual race is being used to fund additional races giving participants another crack at a winning stake, I don't really see the problem.

[Huey]

I think the real point here is that we are going nowhere with the current leadership at NZTR.

The sport is in a sad way.

 

[Chief Stipe]

1 hour ago, curious said:

As long as the money that is not paid out in an individual race is being used to fund additional races giving participants another crack at a winning stake, I don't really see the problem.

I agree with the sentiment but aren't we being a little bit fooled by the manipulation of the statistics?  BS is using the endemic NZRB/NZTR BS spin machine.

Before I discuss that I do have an issue with paying every starter.  Isn't it just another factor that will reduce the quality of our fields?  Mugs will race longer and the good ones that can win will earn less and therefore more pressure will go onto selling the younger winners.  End result our Group racing continues to decline in quality and the overall quality of our fields will decline.

Now to Bernies BS letter!

11 hours ago, Nostradamus said:

While consideration was given to applying this formula across the board, it was noted that owners finishing 5th-14th in $10,000 races would have to be billed for the small difference between their share of the stake and their riders’ fee. From 1 February riding fees increase to $160.  The current 2% distribution would ensure the riding fee would be covered.

This simplifies the process for NZTR.  Basically - "we'll rob the winners to pay the jockey's fees so we don't have to do any administration like send an invoice out, follow up late payers and wait 30 days to get the cash when you pay on time...."  Will we actually see any savings at NZTR?  I can almost guarantee that we won't.

11 hours ago, Nostradamus said:

While current customer betting and turnover trends are very positive, it may be 12 months or longer before the effect of a post-Covid recession as well as reduced TAB NZ marketing, promotional and other activity has on customer numbers and turnover across all of its offerings.

Mmmmm isn't this NZTR's role now with the devolution of some TAB NZ (NZRB) functions to the codes?  So basically TAB NZ has said, and presumably NZTR agreed, that they will fund NZTR the same but NZTR will have to do more with it.  Basically a cross company piece of creative accounting.  The thing is NZTR have no means or statutory enshrined way of generating extra revenue other than charging their customers more or paying them less!

11 hours ago, Nostradamus said:

The industry needs to be aware that TAB NZ has not underwritten a total amount to be paid to the codes this season, rather they have provided a budget of the funding it aims to pay.  We now exist in a funding structure where we are paid in arrears, rather than in advance and cover as much of what would otherwise be a negative cashflow position.

I've posted my thoughts on this in other topics which surprisingly hasn't got more of a response.  However this statement of Bernie's is absolute bollocks.  A few reasons for saying that.  RITA/NZRB was bailed out by the Government.  One of the conditions of that bail out was to "enable the industry codes to continue to be funded."  What's happened?  RITA/NZRB as of 1 August was still sitting with that money in the bank.  There was no reason not to fund the industry stakes as previously.  Unless of course as some of us suspect RITA/NZRB/TAB NZ is still in real financial shyte and creditors have covenants on that lump of funds.  Most of which goes to OpenBet via Paddypower and the Broadcasting/Production contracts.

Further there is no need to pay in arrears - the overall turnover in the Covid-19 affected year was only down 5%.  The TAB NZ continued to earn revenue BUT they weren't paying out stakes to the industry so NZTR should have said we don't agree with this change in policy as you are sitting on the money we earnt.  Add to that with today's accounting systems and the flash new betting system why doesn't NZTR get the revenue they earnt within 7 days of the event that earnt it?

Given the obvious shaky financial position of TAB NZ they have rather sneakily shifted a month's liability fully onto NZTR!  Now Bernie is either one of two things (or both) - thick or complicit.  What happens if TAB NZ starts to default on payments again and the Government refuses to hand out another $50m?  The bank calls in the $45m revolving credit loan due to be repaid in full 1 August next year and the $40m dodgy contracts are not paid?  Meanwhile Bernie has run a month's worth of races and the money isn't forthcoming from TAB NZ so he can't pay Owners, Trainers and Jockey's.

11 hours ago, Nostradamus said:

When a race has a starting limit of 14 or more, but there are fewer than 14 runners, the prizemoney for the placings not filled is retained by NZTR.  This prizemoney saved has, thus far, been used to help fund over 50 races which have been added to the schedule, as well as the cost of two additional race meetings.

Now this is the worst bit of spin in the whole letter!  Unfortunately we don't get the same amount of detailed information that we used to under the Purcell era so it is hard to get too definitive about what is happening. 

But the extra races were added to accommodate the number of horses that were ready to race - advertised races were over nominated earlier in the season.  Many of those extra races were SELF-FUNDING (we didn't put on any extra Group races did we?) as they were at the low end of the Stake tree.  Even worse they were funded at the minimum on many occasions and not at the advertised minimum for the raceday.  They FUNDED THEMSELVES!  Albeit in "arrears"!

So Bernie - cut the BULLSHIT!

[Chief Stipe]

Oh forgot to add.  Bernie spent $1m on a new computer system on "in arrears" funding - which isn't finished yet so I expect the final figure to be 3 or 4 times that.

Now $1m equals 100 $10,000 races.......twice that which was funded by the below 14 starters!

What should happen is that if a field has less then 14 starters then the Stake that each horse "wins" should increase i.e. the $10,000 stake should still be distributed to those that participated.  Now I don't agree with paying out for mediocrity but if I ran last in an 8 horse field and got a windfall I'd be happy.

[mardigras]

14 minutes ago, Chief Stipe said:

But the extra races were added to accommodate the number of horses that were ready to race - advertised races were over nominated earlier in the season.  Many of those extra races were SELF-FUNDING (we didn't put on any extra Group races did we?) as they were at the low end of the Stake tree.  Even worse they were funded at the minimum on many occasions and not at the advertised minimum for the raceday.  They FUNDED THEMSELVES!  Albeit in "arrears"!

Can you explain how these races were self funded?

[Chief Stipe]

9 minutes ago, mardigras said:

Can you explain how these races were self funded?

I know where you are heading with this Mardigras.  However if a $10,000 race in NZ ISN'T self-funding from the revenue it generates then the BS that Bernie wrote is even worse!  OR does he want MORE 8 or less horse fields because the amount he pays out in Stakes reflects more the amount of revenue that the race generates?

Of course those EXTRA $10,000 races cost the industry nothing more because the variable costs associated with adding an extra race to a 10 race card is minimal.

Now I'm sure Mardigras you have the statistics at your fingertips. 

[curious]

2 minutes ago, Chief Stipe said:

I know where you are heading with this Mardigras.  However if a $10,000 race in NZ ISN'T self-funding from the revenue it generates then the BS that Bernie wrote is even worse!  OR does he want MORE 8 or less horse fields because the amount he pays out in Stakes reflects more the amount of revenue that the race generates?

Of course those EXTRA $10,000 races cost the industry nothing more because the variable costs associated with adding an extra race to a 10 race card is minimal.

Now I'm sure Mardigras you have the statistics at your fingertips. 

But did they generate the revenue to cover the stakes, aside from any other costs of staging the events? I don't think so.

[mardigras]

4 minutes ago, Chief Stipe said:

I know where you are heading with this Mardigras.  However if a $10,000 race in NZ ISN'T self-funding from the revenue it generates then the BS that Bernie wrote is even worse!  OR does he want MORE 8 or less horse fields because the amount he pays out in Stakes reflects more the amount of revenue that the race generates?

Of course those EXTRA $10,000 races cost the industry nothing more because the variable costs associated with adding an extra race to a 10 race card is minimal.

Now I'm sure Mardigras you have the statistics at your fingertips. 

As curious wrote, they still have to get the $10k from somewhere. Aside from returns through fixed odds being variable on a specific race, in general NZ TAB requires around $200 - $250k in turnover to generate $10k net. I'm not seeing that.

[Chief Stipe]

1 minute ago, curious said:

But did they generate the revenue to cover the stakes, aside from any other costs of staging the events? I don't think so.

You don't "think" so?  Or you "know" so?

The point you and Mardigras are making is that NO race in NZ generates enough revenue to cover Stakes.  Therefore it follows that the minimum Stakes that are paid should drop.

[curious]

Well you can't have it both ways. Above you said that those races were self-funding.

[Chief Stipe]

1 minute ago, mardigras said:

As curious wrote, they still have to get the $10k from somewhere. Aside from returns through fixed odds being variable on a specific race, in general NZ TAB requires around $200 - $250k in turnover to generate $10k net. I'm not seeing that.

All well in good and what you are discussing now is a fundamental problems.  However don't deflect away from the fact that what Bernie wrote is absolute bullshit.

[Chief Stipe]

Just now, curious said:

Well you can't have it both ways. Above you said that those races were self-funding.

Well you don't know that they aren't.  If the total Tote revenue plus Fixed Odds revenue plus Export fees didn't earn $10,000 in total revenue then things are much much worse than it appears.  Adding one extra race to a programme costs zip in marginal cost.

[mardigras]

4 minutes ago, Chief Stipe said:

Well you don't know that they aren't.  If the total Tote revenue plus Fixed Odds revenue plus Export fees didn't earn $10,000 in total revenue then things are much much worse than it appears.  Adding one extra race to a programme costs zip in marginal cost.

They aren't 'generally'. Without knowing the outcome from fixed odds revenue, how could we know. They could take $10k in fixed odds bets and none of it on the winner.

But what we do know is that across each level of stake, races do not earn revenue from tote/fixed odds and export fees that get anywhere near the stake. That is known and has been known for years.

If you wanted to offer stakes that reflected earnings, we'd have average stakes around $5k - that's including Group ones.

Edited December 5, 2020 by mardigras

[Nostradamus]

Chief stripe, I agree with you on not every runner should be paid out, it should be the first 5 or in the so called big events group 2 and 1 then a 6th place can be added. It to me is foolish to believe money saved from fewer runners will create more races where will the extra meetings fit into the calander?? It's ludicrous sugar coated shite, AND IT AFFECTS EVERYONE IN THE INDUSTRY!!