And so let the blood letting begin

[Hesi]

Racing: Dramatic cuts to see closure of major tracks

14 May, 2020 4:30pm

 4 minutes to read

Avondale race course. Photo / Paul Estcourt

NZ Herald

 

By: Michael Guerin

 

 

 

 

 

 

 

 

 

 

KEY POINTS:

• New Zealand racing is set to close between 15 and 20 racetracks, with their clubs to not be issued with licences to hold any meetings.
• Those cuts will be outlined in the new season racing calendar to be released at noon on Friday.
• One of the biggest names almost certain to fall will be the Avondale Jockey Club, whose valuable West Auckland track will close.

 

Tomorrow looms as one of the most dramatic days in the history of New Zealand horse racing, with the closure of some major tracks set to become a reality.

And the jewel in the closure crown could be Avondale in West Auckland, which will almost certainly not be allocated any more race meetings for next season or in the future.

Up to 10 thoroughbred racetracks around the country will lose their racing licences in the proposed dates calendar to be released by the Racing Industry Transition Agency (the TAB), with the addition of one racing venue when the synthetic track which is under construction at Cambridge is completed.

 

Harness racing will also close many tracks with no racing dates allocated to regular venues Forbury Park in Dunedin and the Manawatu harness track in Palmerston North.

Unless the latter is overturned, and dual codes meetings between greyhounds and harness are still being discussed, there would be no harness racing meetings held anywhere in the North Island south of Cambridge again.

Other venues understood to be likely to close or at least have one of their racing codes taken away from them include Timaru - always an emotional hot button for racing fans as it was the birthplace of New Zealand's greatest horse, Phar Lap.

The track named in his honour, Phar Lap Raceway, is set to go quiet while Southland will be reduced to two harness tracks, most likely at Invercargill and Winton.

If the proposed calendar is not changed, and there could still be some last minute arguing tonight, New Zealand will have 32 fewer thoroughbred meetings next season.

Many of the track closures align with the Messara report recommendations of August 2018 and while they may not be a surprise, the swiftness with which they are being brought in will shock plenty and even outrage those in areas where racing fans will be left without a local track.

 

 

It will also mean some trainers will have to move from training at their local tracks should they wish to continue, and the loss of racing in some regions will inevitably impact on the number of future owners and even punters in those areas.

 

Key factors in the decisions, which were made after consultation between all three codes and RITA, were the costs of racing at each venue, returns to the industry and owners and the horse population trained in that area.

 

What happens to many of the tracks slated to have no more meetings is a huge economic question for the industry, with proposed changes to the Racing Act, which could still possibly be passed before the September election, suggesting some tracks could be sold and the proceeds returned to the industry.

The most valuable of those would be Avondale, which could be worth between $150-200 million and would provide a huge boost for racing's financial problems if it can be used for the industry's greater good.

But even if that becomes legally possible under the new Racing Act, Avondale Jockey Club officials have made it quite clear in the past they want none of that and suggestions of legal action to fight it, at least initially, look certain.

In a week where the Government has come to racing's rescue to the tune of $72.5 million the appetite for more talk and consultation appears to be all but over, with RITA declaring they will make changes to improve the industry's bottom line whether they are popular or not.

Covid-19 and the financial chaos it has caused has sped up those changes, many of which might have taken years to implement.

The reality is they are here now and, for better or worse, New Zealand racing will change forever tomorrow.

 

 

 

 

 

 

 

 

 

 

 

 

[Hesi]

Let's see also where the costs end up

Blood letting needs to be across the board

[curious]

Yep. But it has to start somewhere. I'm sure there's more to come and soon.

 

[Freda]

11 minutes ago, barryb said:

In fact Hesi you might want to start investigating  about calling this site, The Sports Place as I fear racing has 12 months left at the most in NZ. 

You're right, racing has had its chance to get its shit together and hasn't. 

Successive Racing Ministers have been maligned because they haven't pulled a rabbit out of the hat...but since around 2003 the rabbits have been leaving town.

Get your house in order, we were told...but self-interest and blinkered ( or nonexistent) vision prevailed. 

Mardi, you have predicted this for years. I'm sure you're taking no pleasure from being right all the same. 

[Hesi]

Let's see what the calendar is tomorrow and hopefully the stakes.

Guerin talks about 32 less meetings, which is a drop of only just over 10%, that in itself is not life changing.  He also talks about clubs not being issued with licences, but is not clear whether that means they cannot race, or will have to race at another track

The stakemoney on offer will be the key, and that will be governed by the payout to the codes based on a budget that balances and will encompass some dramatic cost reductions.  Wow, a budget that balances, along with realistic revenue projections, along with good strategies,  anyone that has any business experience at all will wonder why this was never demanded, by the various boards over the years

I hope for the sake of the industry that those cost reductions are well and truly across the board, or there will be some serious divisions created.

For instance, you would expect to see that staff cost come down from 62 mil to 40 mil.  People in the industry seeing that, then might accept what will directly affect them

[mardigras]

3 minutes ago, Freda said:

You're right, racing has had its chance to get its shit together and hasn't. 

Successive Racing Ministers have been maligned because they haven't pulled a rabbit out of the hat...but since around 2003 the rabbits have been leaving town.

Get your house in order, we were told...but self-interest and blinkered ( or nonexistent) vision prevailed. 

Mardi, you have predicted this for years. I'm sure you're taking no pleasure from being right all the same. 

I'm quite pissed off. Like so many of us I'm sure - we grew up with NZ racing as a big part of day to day life. Going to the races as a youngster - and at intermediate, my teacher was keen on the races and we would get out of school early to get to the Levin races to see the likes of Grey Way, Copper Belt and La Mer. (Intermediate was just down the road from the track).

They've sold the industry down the road for the sakes of preserving their own salaries with no interest in what makes racing tick here. 

It's been sad watching the events unfold. 

[Hesi]

It appears that the 72.5 mil, has come with some extremely stringent conditions, and that it will be the last handout, ever

Remember also Mardi, as you have so astutely pointed out in the past, some pretty dumb strategy decisions, such as the focus on fixed odds, at lower return and higher cost and therefore the need to purchase the platform at 50 mil, with 17 mil/annum fee.

Dean McKenzie is certainly going to earn his $750K in the next year, but it is still way too much.

Two thoughts 

1.  How much of the proceeds from the sale of assets, will actually go to refurbishment of tracks and facilities, that are a nice to have, but not going to revive the industry in the short term

2.  Why on earth do they need to spend money on synthetic tracks, surely 2 Strathayr tracks at Ellerslie and one other venue, is a better long term investment in "making racing great again"

Who keeps making all these very questionable decisions

[mardigras]

My opinion is we don't need synthetic tracks at this point. Or probably not even a Strathayr either. Things like a Strathayr would be great for NZ racing - long term. More work needs to be done both on Strathayr in the NZ climate and any options around full synthetics. Not a knee jerk reaction without proper analysis and investigation. 

However, I don't think they should be part of the current plan. Part of the long term plan, yes, but not yet.

But if we don't fix things more pressing, we won't get to the long term. So investing in these things now, when they are very much long term items is not optimum. I tend to focus on long term in most things I write about, but we are at the crossroads.

So spending in areas which need the investment anyway, becomes a priority for me. As you then can hopefully get racing to a point where it is at least at less risk of folding, allowing you to start to put together the plan that brings in other aspects to support the overall long term plan.

If I use my bakery as an example. If my bakery is about to collapse, and my ovens are shit. I wouldn't go down the path of investing in an uninterruptable power supply for my ovens in the event I lost power. I'd do that after I got my business back up and running with appropriate quality equipment - thereby fixing my ovens - and then once fixed and things are getting back on track, I can upgrade my overall infrastructure to support me through those rare times when the power causes me reliability issues. And invest in those improvement items that might give me a point of difference when unplanned events happen.

[Porky]

I have heard the track closures thing mooted and put in the too hard basket for far too long whilst those on the Gravy train enjoyed the spoils

Now the pressure has been applied..They jump.

But like Mardigas memories of yearly trips to Waipukarau and Wairoa Cups and Enjoying those large festive country crowds are a thing of the past.

How / Why are these big flash , waste of money grandstands that will only be full a couple of times a year ! @ Ellerslie and Awapuni

in a couple of decades we will be looking back at the good old days of country racing. (sold off for a song)

for fuck sake, use the venues as a source of income...Dont sell them off. 

[Hesi]

15 minutes ago, mardigras said:

My opinion is we don't need synthetic tracks at this point. Or probably not even a Strathayr either. Things like a Strathayr would be great for NZ racing - long term. More work needs to be done both on Strathayr in the NZ climate and any options around full synthetics. Not a knee jerk reaction without proper analysis and investigation. 

However, I don't think they should be part of the current plan. Part of the long term plan, yes, but not yet.

But if we don't fix things more pressing, we won't get to the long term. So investing in these things now, when they are very much long term items is not optimum. I tend to focus on long term in most things I write about, but we are at the crossroads.

So spending in areas which need the investment anyway, becomes a priority for me. As you then can hopefully get racing to a point where it is at least at less risk of folding, allowing you to start to put together the plan that brings in other aspects to support the overall long term plan.

If I use my bakery as an example. If my bakery is about to collapse, and my ovens are shit. I wouldn't go down the path of investing in an uninterruptable power supply for my ovens in the event I lost power. I'd do that after I got my business back up and running with appropriate quality equipment - thereby fixing my ovens - and then once fixed and things are getting back on track, I can upgrade my overall infrastructure to support me through those rare times when the power causes me reliability issues. And invest in those improvement items that might give me a point of difference when unplanned events happen.

But further to the bakery analogy, your ovens are critical to your business, which as you say is about to collapse.

Would you splash out and buy new ovens, would you negotiate a deal with the oven supplier to pay off the ovens over say 12 months, would you look around for some reasonable second hand ovens, would you look at other types of ovens that might do the job better for you

NZ Racing would buy flash new ovens and pay for them in full, and probably not even ask for a discount......you see, not their money

[Hesi]

Yes, and agree with the long and short term aspects

[Hesi]

15 minutes ago, Porky said:

I have heard the track closures thing mooted and put in the too hard basket for far too long whilst those on the Gravy train enjoyed the spoils

Now the pressure has been applied..They jump.

But like Mardigas memories of yearly trips to Waipukarau and Wairoa Cups and Enjoying those large festive country crowds are a thing of the past.

How / Why are these big flash , waste of money grandstands that will only be full a couple of times a year ! @ Ellerslie and Awapuni

in a couple of decades we will be looking back at the good old days of country racing. (sold off for a song)

for fuck sake, use the venues as a source of income...Dont sell them off. 

What sources were you thinking of Porky

[curious]

23 minutes ago, mardigras said:

My opinion is we don't need synthetic tracks at this point. Or probably not even a Strathayr either. Things like a Strathayr would be great for NZ racing - long term. More work needs to be done both on Strathayr in the NZ climate and any options around full synthetics. Not a knee jerk reaction without proper analysis and investigation. 

However, I don't think they should be part of the current plan. Part of the long term plan, yes, but not yet.

But if we don't fix things more pressing, we won't get to the long term. So investing in these things now, when they are very much long term items is not optimum. I tend to focus on long term in most things I write about, but we are at the crossroads.

So spending in areas which need the investment anyway, becomes a priority for me. As you then can hopefully get racing to a point where it is at least at less risk of folding, allowing you to start to put together the plan that brings in other aspects to support the overall long term plan.

If I use my bakery as an example. If my bakery is about to collapse, and my ovens are shit. I wouldn't go down the path of investing in an uninterruptable power supply for my ovens in the event I lost power. I'd do that after I got my business back up and running with appropriate quality equipment - thereby fixing my ovens - and then once fixed and things are getting back on track, I can upgrade my overall infrastructure to support me through those rare times when the power causes me reliability issues. And invest in those improvement items that might give me a point of difference when unplanned events happen.

Would you be interested in running one of my supermarkets?

 

[Sandpiper]

Rebuild from the ground up at a few key venues and incentivise training to relocate there. Auckland, Wellington, Christchurch. World class turf, AWT (whatever the best surface is). Adjoining dogs stadiums. Integrated casino and restaurants.

Racing can't do anything other than suffer a slower death unless how the product is experienced is transformed.

Awful to lose the connection to all the history and the annual festival at all of these clubs.

 

[Sandpiper]

12 minutes ago, Hesi said:

NZ Racing would buy flash new ovens and pay for them in full, and probably not even ask for a discount......you see, not their money

Don't forget the service contract!

[mardigras]

6 minutes ago, curious said:

Would you be interested in running one of my supermarkets?

 

Are their ovens not working well?

[Midnight Caller]

Great analogy Mardi! All the contributors  here and on some other sites can easily see and make good solutions moving forward,and have been saying so for many years..So why is it the people in charge can't see the wood for the trees?

[Hesi]

16 minutes ago, Sandpiper said:

Rebuild from the ground up at a few key venues and incentivise training to relocate there. Auckland, Wellington, Christchurch. World class turf, AWT (whatever the best surface is). Adjoining dogs stadiums. Integrated casino and restaurants.

Racing can't do anything other than suffer a slower death unless how the product is experienced is transformed.

Awful to lose the connection to all the history and the annual festival at all of these clubs.

 

That might actually be achievable now, seeing it has come to the fat lady singing.

I read somewhere that the Waikato Greenfields project due as per the Messara Report for 2026, and funded from the sale of Te Rapa, Waipa and Cambridge, had fallen through????

Also listening over the past months to Bernard Saundry, I got the distinct impression, that he wanted to see the 3 Auckland clubs get together and do a mega complex, as you suggest, rather than be forced into something, but it was going nowhere

[Hesi]

10 minutes ago, Midnight Caller said:

Great analogy Mardi! All the contributors  here and on some other sites can easily see and make good solutions moving forward,and have been saying so for many years..So why is it the people in charge can't see the wood for the trees?

Because they only get paid to see the trees

[Porky]

28 minutes ago, Hesi said:

What sources were you thinking of Porky

 

9 minutes ago, Midnight Caller said:

Great analogy Mardi! All the contributors  here and on some other sites can easily see and make good solutions moving forward,and have been saying so for many years..So why is it the people in charge can't see the wood for the trees?

A tad late I think Hesi...sell,sell,sell was the call.

anything like infield housing or theme parks with amenities e.g Gyms, shops, etc,etc have probably been looked at

and dispensed of as a bad joke due to H & S or Govt, regulations...not to mention it may not be their land anyway....who knows ? not I  

[Midnight Caller]

Dead right Hesi! I've said this before on another  thread, but with any large company,when a new CEO comes on board the first thing he thinks about is how can I improve this business  before the next shareholders meeting? Income over expenditure, this usually means dead wood is gone and having more of one and less of the other, therefore  showing shareholders  the business  is in good hands or he and a few others on the board are gone.This is how business  in the real world is done.

[Hesi]

Small business as well

I have my own small business, I know my costs, I put in projected sales based on historical data, and I monitor both every month and adjust strategies based on results.

It's not rocket science, most small business owners would do this in some form.  If they don't, then they cannot pick up potential problems until it really does become a problem.

There is simply no accountability and never has been at the NZRB, and now it is revolution instead of evolution, and the survival of an industry depends on it.

A totally disgraceful situation, and hard to believe it could ever have been allowed to happen

In a nutshell, it comes down to this

Revenue will be impossible to maintain because of Covid

If stakemoney is not maintained at levels close to 19/20, then industry participants will bail in numbers

Therefore the only options, are to cut costs big time, borrow money or get given it, or sell assets

[VC!]

The bleeding is certainly flowing I have noticed a fair few ex kiwi horses either transferred or sold to Australian interests 

Great to see Alysha Collett arrive in Sydney she starts her NSW riding career on Sunday

Won’t be long before Opie Bosson is over here Emily will pick up a job with Sky Australia no problem, she will be able to join former trackside host Cassie Fahey as the influx of Kiwis continues

satellite stables in Sydney and Melbourne just a matter of time before the bigger NZ trainers have these up and running 

It would be extremely difficult to own a horse in NZ

Trainers Fees

Riding Fee

Trainer 10% of prize money

Jockey 5% plus sling

Vet fees

Farrier fees

Horse transport fees

Nomination fees

Acceptance fees

Dire Straits Money for Nothing with plenty of fees!!!

 

[curious]

8 hours ago, mardigras said:

Are their ovens not working well?

The ovens are all less than a year or two old. We replace them on a 5 year cycle. Kind of like you would relay/refurbish racetracks. I thought you ran a bakery not an oven repair business.

 

[Hesi]

I note on the other main channel, so many saying they will never race another horse in NZ.

How is that going to help the industry they have been so passionate about, yet rightly criticised in the past

Wait and see what the stakes are for 20/21 when published, and if they are close to 19/20 levels.

RITA or whatever they morph into, will have to produce budget forecasts for 20/21, if the costs figure has been slashed, then that is a clear indication of intent, 30% min required

Avondale will fight if they have their licence withdrawn, what's the point.  The 3 Auckland Clubs need to get together, sell all 3 assets, and build a new greenfields complex down by Karaka somewhere.  Incorporating features that will allow for training, and an income 365 days days of the year.

Will it happen

NO