Don't expect any increases in Stakes this coming year! Unless they rob a bank or get a handout again the money isn't there!

[Chief Stipe]

13 minutes ago, JJ Flash said:

For the year to date, the Reported Profit is $147.2m, which is $37.5m above Budget. Normalised Profit is $145.4m, which is $35.7m above Budget. 

The Budget is below the previous non-Covid year.

13 minutes ago, JJ Flash said:

In May the Board also approved making a $10m payment against TAB NZ’s ASB debt facility, which was made this month.

Still $25m to find.

[nomates]

There is only one set of numbers that are going to matter to industry participants , race stakes , no significant increase will just ramp up the pressure on the future of the industry .

Last week the David and Emma Haworth stable closed as a racing stable , David said he had given up waiting for things to improve or a cohesive plan towards achieving improvement . They had won 3/4 races in the last month from limited starters .

David had less financial pressures than many in the game , just the beginning , wont be the last in the next 12 months i fear .

[Huey]

18 hours ago, nomates said:

There is only one set of numbers that are going to matter to industry participants , race stakes , no significant increase will just ramp up the pressure on the future of the industry .

Last week the David and Emma Haworth stable closed as a racing stable , David said he had given up waiting for things to improve or a cohesive plan towards achieving improvement . They had won 3/4 races in the last month from limited starters .

David had less financial pressures than many in the game , just the beginning , wont be the last in the next 12 months i fear .

Interesting to see which way the stakes go. From an Industry day perspective I'd say they would need to increase by at least 50% (I mean is 2k - 2.5k going to make any material impact at the bottom end) to have any reasonable impact , perhaps at the top level by another 7.5k -10k outside of Group racing , NZTR seem in a bit of a rock and a hard place with this one in that it does not appear they have enough funds to make any significant impact?

 

Table from the optimist website.

 

 

[Chief Stipe]

Well as the industry leaders sit around the table to carve up the revenue from TAB NZ what can we expect?

The facts:  (Bear in mind that under this regime we have had little transparency so some of the fine details can only be assumed!  When was the last time we didn't get a full half yearly report?)

The budget for the 20/21 year net profit is $131.7m.  Assuming no budgeted top ups from reserves (there aren't any) you have to go back to the year 2011/12 to find an equivalent net profit!  TEN years ago.

Now we are told that they are up 35% on budget which projecting forward to the end of the year would give a net profit of $176m.  That figure looks a bit suspect to me especially when you look at the individual month percentages over budget.  

Now you may well say YAHOO we are in the money!  Wooh up neddy.....

Don't forget that TAB NZ was at least $35m in the hole and struggling to pay their bills.  That $35m is due to be repaid in full at the end of August.  It was recently announced that the Board has approved the immediate repayment of $10m from profits.

SO the $176m is down to $166m with still $25m to pay - again we are assuming that TAB NZ didn't borrow any more money.  The Government bailout last year kept them solvent.  There is still $25m to pay and there is no guarantee that the bank will allow that to roll over - I guess paying $10m would help negotiations.  BUT prudent financial management would involve either ring fencing $20m OR paying the debt off.

So the $166m now reduces to $141m with no reserves to top up.

Of course most of that $141m is already spent - as the net profit is earned it is redistributed to the codes.  To the end of May $123 has been distributed up 12% on budget.  The total budget is $132m distributed to the codes.  If the increase in distribution is maintained then the total distributed will be $137m (which is close to $141m isn't it?).

$137m isn't much more than what was paid out a decade ago!  But at least it doesn't involve dipping into reserves or borrowing more money or getting a handout from Government does it?

BUT WAIT there's more.......

Don't forget three very important unknowns that the Industry Administrators have to weigh up:

1. Will the next financial year match this financial year in terms of revenue (net profit)?
2. Can we expect an increase in profit in a highly competitive environment?
3. TAB NZ has pushed off their balance sheet functions that the codes are now expected to fund (e.g. marketing) therefore inflating their profit BUT forcing the codes to make a decision between funding these functions or distributing more in stakes?

In summary my conclusion is that there is NO extra money to increase ANY stakes.

[Chief Stipe]

Apologies for the changes in this Topic!  I was trying to tidy things up and made it worse for a bit!

[Huey]

34 minutes ago, Chief Stipe said:

Well as the industry leaders sit around the table to carve up the revenue from TAB NZ what can we expect?

The facts:  (Bear in mind that under this regime we have had little transparency so some of the fine details can only be assumed!  When was the last time we didn't get a full half yearly report?)

The budget for the 20/21 year net profit is $131.7m.  Assuming no budgeted top ups from reserves (there aren't any) you have to go back to the year 2011/12 to find an equivalent net profit!  TEN years ago.

Now we are told that they are up 35% on budget which projecting forward to the end of the year would give a net profit of $176m.  That figure looks a bit suspect to me especially when you look at the individual month percentages over budget.  

Now you may well say YAHOO we are in the money!  Wooh up neddy.....

Don't forget that TAB NZ was at least $35m in the hole and struggling to pay their bills.  That $35m is due to be repaid in full at the end of August.  It was recently announced that the Board has approved the immediate repayment of $10m from profits.

SO the $176m is down to $166m with still $25m to pay - again we are assuming that TAB NZ didn't borrow any more money.  The Government bailout last year kept them solvent.  There is still $25m to pay and there is no guarantee that the bank will allow that to roll over - I guess paying $10m would help negotiations.  BUT prudent financial management would involve either ring fencing $20m OR paying the debt off.

So the $166m now reduces to $141m with no reserves to top up.

Of course most of that $141m is already spent - as the net profit is earned it is redistributed to the codes.  To the end of May $123 has been distributed up 12% on budget.  The total budget is $132m distributed to the codes.  If the increase in distribution is maintained then the total distributed will be $137m (which is close to $141m isn't it?).

$137m isn't much more than what was paid out a decade ago!  But at least it doesn't involve dipping into reserves or borrowing more money or getting a handout from Government does it?

BUT WAIT there's more.......

Don't forget three very important unknowns that the Industry Administrators have to weigh up:

1. Will the next financial year match this financial year in terms of revenue (net profit)?
2. Can we expect an increase in profit in a highly competitive environment?
3. TAB NZ has pushed off their balance sheet functions that the codes are now expected to fund (e.g. marketing) therefore inflating their profit BUT forcing the codes to make a decision between funding these functions or distributing more in stakes?

In summary my conclusion is that there is NO extra money to increase ANY stakes.

3. Is a very good point  and I guess somewhat part of the semantics of it all.

[Huey]

I'd be disappointed to see any increase go into top level stakes, been there done that before, The bottom end is bleeding & is in desperate need of something (having said that a lot of it the bleeding has been assisted or created by the likes of NZTR) .

Does this then beg the question, when do they start trying to sell up the family silver?

[Freda]

They're trying very hard to cash up Dargaville. 

[Chief Stipe]

Just now, Huey said:

Does this then beg the question, when do they start trying to sell up the family silver?

More pressure will go on Clubs BUT the money isn't there and never was let alone whatever was there being accessible to transfer to NZTR.  Of course that option isn't available to Harness or Dogs.

The operational costs of the AWT's is starting to kick in now too PLUS the increase in the number of races that they facilitate at what I imagine is a lower yield than others.

[Chief Stipe]

2 minutes ago, Freda said:

They're trying very hard to cash up Dargaville. 

Do you have some links to that process?  I doubt that will free up much capital and I would have thought that Ruakaka would have some dibs on it.

[Freda]

I've seen some private correspondence which I won't go into further. 

But the tone was not amicable, and I understand the next letter is worse.

[Chief Stipe]

1 minute ago, Freda said:

I've seen some private correspondence which I won't go into further. 

But the tone was not amicable, and I understand the next letter is worse.

Fair enough.  May I ask was the non-amicable tone from Dargaville or NZTR or both?

[Freda]

NZTR.

[Chief Stipe]

4 minutes ago, Freda said:

NZTR.

LOL really?  Good luck with that approach.

I understand there are rumblings in the Central Districts as well with Levin and Foxton being notified that the chosen training hub is Otaki!  Levin and Foxton will always be better race tracks than Otaki and for that matter the turf at Awapuni!  Go figure!

What's more Levin offers a very low cost model for local trainers - I can't see Otaki doing that.  Levin has also invested in new stabling and other improvements WITHOUT any funding assistance from NZTR.

I've said it many times before it is sheer lunacy to close down racetracks that provide services to the industry and minimal cost to the industry while moving to a higher operating cost model.  The other prediction I made is that the AWT at Awapuni and other Awapuni costs will suck the CD dry just as Riccarton will the South Island. 

Meanwhile OZ is pumping investment into its provinces and adjusting their racing calendars to provide pathways for provincial horses to progress to metropolitan class while maintaining country and provincial racing.

[Chief Stipe]

What's the bet that NZTR will try and argue that they need a bigger slice of the pie over and above what direct revenue they earn because "we are the dominant code, have a higher cost structure and need to spend more on marketing"?

[Huey]

35 minutes ago, Chief Stipe said:

 

Meanwhile OZ is pumping investment into its provinces and adjusting their racing calendars to provide pathways for provincial horses to progress to metropolitan class while maintaining country and provincial racing.

Unfortunately Aus gave us someone with little understanding of racing and in particular Provincial/Country racing , we will see the fruits of such recruitment over the next few years is my prediction.

[nomates]

3 hours ago, Huey said:

Interesting to see which way the stakes go. From an Industry day perspective I'd say they would need to increase by at least 50% (I mean is 2k - 2.5k going to make any material impact at the bottom end) to have any reasonable impact , perhaps at the top level by another 7.5k -10k outside of Group racing , NZTR seem in a bit of a rock and a hard place with this one in that it does not appear they have enough funds to make any significant impact?

 

Table from the optimist website.

 

 

There is no reason to be increasing our group 1 and 2 races , the quality and quantity is not there to justify it . Lets start rebuilding from the bottom for once , lets see if that works , you never know . 

Funding the top end more money is wasted at present .

[Gospel of Judas]

No point wasting more money on group Racing. When our group racing, is seriously shit and of poor quality. If they have any more money.. which we doubt. Better off in the bottom end. But usually like Vela and Hogan types of this world will not want that! https://www.nzherald.co.nz/nz/nz-first-foundation-received-tens-of-thousands-of-dollars-from-horse-racing-industry/77YL7K4SVONIDZUMXD4I5Q25DU/ Want everyone else to pay for them! 

Just remember who goes too these get special treatment! their are many hands and politics in this...😏 https://www.stuff.co.nz/sport/racing/106751679/winston-peters-gives-racing-donors-inside-running-on-plans-at-600ahead-dinner 

What money and support went in https://www.stuff.co.nz/national/politics/119704872/billionaires-among-the-full-list-of-donors-supporting-nz-first

Edited June 30, 2021 by Gospel of Judas

[nomates]

2 hours ago, Chief Stipe said:

LOL really?  Good luck with that approach.

I understand there are rumblings in the Central Districts as well with Levin and Foxton being notified that the chosen training hub is Otaki!  Levin and Foxton will always be better race tracks than Otaki and for that matter the turf at Awapuni!  Go figure!

What's more Levin offers a very low cost model for local trainers - I can't see Otaki doing that.  Levin has also invested in new stabling and other improvements WITHOUT any funding assistance from NZTR.

I've said it many times before it is sheer lunacy to close down racetracks that provide services to the industry and minimal cost to the industry while moving to a higher operating cost model.  The other prediction I made is that the AWT at Awapuni and other Awapuni costs will suck the CD dry just as Riccarton will the South Island. 

Meanwhile OZ is pumping investment into its provinces and adjusting their racing calendars to provide pathways for provincial horses to progress to metropolitan class while maintaining country and provincial racing.

Well as i have stated on here before good luck getting the Levin money and Foxton isn't owned by the club , as for choosing Otaki as the training hub as well as racing , again good luck . The Otaki track is stuffed , has been for 20 years , was once considered the best surface in NZ , but a lack of real maintenance and a series of hodge podge repairs , a bit here a bit there has left it easily the worst of the 3 options for training , can barely handle racing , plus i would like to know where everybody is going to go .

Plus we have to stop using Aus as our measuring stick , because each time we do their stick has got longer and ours shorter , it is soul destroying to watch .

[Huey]

30 minutes ago, nomates said:

Well as i have stated on here before good luck getting the Levin money and Foxton isn't owned by the club , as for choosing Otaki as the training hub as well as racing , again good luck . The Otaki track is stuffed , has been for 20 years , was once considered the best surface in NZ , but a lack of real maintenance and a series of hodge podge repairs , a bit here a bit there has left it easily the worst of the 3 options for training , can barely handle racing , plus i would like to know where everybody is going to go .

Plus we have to stop using Aus as our measuring stick , because each time we do their stick has got longer and ours shorter , it is soul destroying to watch .

Certainly for thoroughbred racing imo one of the area's we need big change in was the governing body, unfortunately we never got that with all of these reports coming and going. Imo it needed as much of a revamp as the NZRB got. It all beginning to feel a bit late for that. 

[nomates]

34 minutes ago, Huey said:

Certainly for thoroughbred racing imo one of the area's we need big change in was the governing body, unfortunately we never got that with all of these reports coming and going. Imo it needed as much of a revamp as the NZRB got. It all beginning to feel a bit late for that. 

I agree , it all feels too late , but i still believe that if we could get someone to really shake the tree and start some serious changes it can be turned around , not overnight but a progression .

It needs bravery from industry participants , but as long as we could see a cohesive plan , or as Dave Haworth said a " believable " plan , it can be achieved . People will get on board , for the right person/s .

Our biggest problem from top to bottom of racing and the TAB is a lack of real vision , racing in particular continues to do the same old same old . We know that doesn't work so why are they still doing the same things .

If the rumours are true about any stake increases going to the middle and higher grades this just shows how out of touch they are , our higher grades aren't battling for numbers because of stakes , it's because most of our promising horses are sold before they get there . Most of the rest aren't good enough .

Give owners a reason to hold on to their horses , being able to win nice money going thru the lower grades , fix the ratings so horses don't win 3 and suddenly they are having to race in opens or close to .

Vision and heart , till these are found the downward spiral will continue .

[Freda]

Sadly, yes.   The Messara report, looked upon by many as the blueprint for real change,  never involved itself with the codes.  I said to Brian de Lore, in one of our many discussions, that that was the biggest flaw in the whole thing.  Getting code management tidied up is/was vital, and hasn't happened.

[NZRacing]

2020/21 first 6 month financials below. 

 

[NZRacing]

Racing Code Funding Confirmed For 2020/21

Friday, 26 June 2020, 2:13 pm
Press Release: Joint Press Release

 

The Racing Industry Transition Agency (RITA) today advised New Zealand racing codes of forecasted funding in 2020/21 of $139.6m which is the same level as was budgeted for the 2019/2020 season before the impacts of COVID19. This is despite fewer thoroughbred and harness races planned for the upcoming season.

[Chief Stipe]

It will be interesting to see if Cambridge, Riccarton and Awapuni get a disproportionate amount of the pie to pay for the increased operating costs of their AWT's.