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Seven weeks to RITA and CEO Allen needs to resign

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I find Brian Delore's stories a must read, see below for todays latest. I  can't believe John Allen is still peddling his head bobbin waffle and also just how anyone continues to turn up, unless to be part of a lynch mob. I've attended these in the past, but it seems a distant past since John had any industry credibility. As for the travelling team, I always thought his General Manager Finance - Shaun Brooks found these roadshows to be quite distasteful, fancy dealing with the industry peasants and heaven forbid he should have to talk to any of them. Stephen Henry - General Manager Services another highly paid executive on the roadshows, his one and only job seemingly to remind John Allen that time was up (after an hour and a half or so) just as the questions started rolling in.

 

Seven weeks to RITA and CEO Allen needs to resign

by Brian de Lore
Published 10 May 2019
www.theoptimist.co.nz

New Zealand Racing Board CEO John Allen appeared to be in denial of the impending derailing of his ever-fattening gravy-train when the evangelistic pied-piper of racing-spin pulled into the Hastings platform this week for another round of preaching to racing’s unconverted.

But from all reports, few if any of the 30 or so Hawkes Bay participants that turned up to witness Allen’s arm-waving dissertation at Hastings Racecourse went away convinced. Why would they be after being told ‘the racing industry needs to tell its stories better to gain wider support.’

Irony, indeed, when you consider the very vehicle that was conveying all the stories, The Informant, folded as a direct result of Allen and his mean-minded executives denying the ‘racing-form’ to the weekly paper which resulted in the form coming from Australia at considerable cost. In a marginal business, it made all the difference.

All in the cause of promoting the money-burning Best Bets which has reputedly seen its circulation decrease from around 3,500 to 1,500 in the ownership of the NZRB. A very peculiar set of circumstances when one considers The Informant’s ‘form guide’ could only have been enhancing TAB turnover well before lessening the sales of Best Bets.

“Best Bets can be purchased in only two outlets in Hastings,” well-known breeder and racing identity Lucy Scoular told The Optimist the day after Allen and his highly paid coal-stoking executives had shunted out of town. “The two places are a dairy on the outskirts of town and the TAB – that’s for a population of 60,000 people,” added Scouler.

Like so many other towns in rural New Zealand, the lack of an easy to purchase printed form guide is hardly the formula for successfully retaining yet another diminishing swathe of older generation punters; many of whom have dropped out since the demise of The Informant – racing may never get them back.

But Allen is oblivious to such things and deflects the blame squarely back onto racing; after all, racing people should have told their stories better to get wider support. Also, over-the-head of Allen would have been trainer John Bary’s question to him.

He asked: “What were you doing on Christmas Day.? My family and I had to muck-out 30 boxes twice on Christmas Day because I couldn’t afford to pay staff time and a half.”

“During the two-hour meeting,” continued Lucy Scoular, John Allen told us the new board wouldn’t be any better than what they have now. “We all went along wanting answers – owners, trainers, and breeders – but we didn’t get any answers.”

Anyone who has ever read Ernest Hemingway’s novel, The Sun Also Rises, may recognise a quote that could be attributed to Allen’s travelling from town to town with his road show. It goes: “you can’t get away from yourself by moving from one place to another.” 

Allen was employed by the NZRB about four years ago, but all that must come to an end in seven weeks when the NZRB ceases to be an entity and is replaced by the Racing Industry Transition Authority (RITA). Hallelujah!  Not long to wait now. It means that Allen will cease to be responsible to the people who employed him, not that he ever seemed to be, and he should tender his resignation now, and disappear by the time RITA arrives. It would be his finest decision.

NZRB has employed a succession of disastrous CEO’s, and without knowing which has been the worst, it’s fair to say that Allen is right up with the best of the worst. Why am I attacking him again? Because until this industry we know as racing and breeding looks itself in the mirror and takes responsibility for its actions, admits its mistakes, gets some balls, and promises never to be so stupid again, it will continue to repeat these disasters.

Good riddance to the old board; RITA will be the new board, albeit a temporary one, and despite all the new legislation and the ‘blank sheet of paper new beginning’ that John Messara foresaw the industry needed, the future success or failure of racing in New Zealand will be in the hands a just a few people. Messara has always said, personnel is everything; one person can change the world.”

The Optimist wasn’t an attendee at Hastings Racecourse, but it’s safe to say Allen would not have been apologising to the industry for introducing a failing Fixed Odds Betting Platform amid industry protestations at the cost of $50 plus million. He would not have been apologising for collecting an annual salary which has risen to $680,000 despite having zero industry knowledge when appointed four years ago – basic commonsense ignored but, nevertheless, a recurring lesson to be learned.

He would not have been telling the group that $60 to $70 million was available in annual savings by outsourcing the TAB to Tabcorp – a figure largely agreed upon by Deloitte, Investec and Messara; or that the FOB to work requires 245 never to be made changes; or that NZRB will miss its 2018-19 budget by about $25 million; or that despite the tangible capitalisation of the FOB, it might be worth nothing overnight.

Neither would he have talked about the declining horse population which even if stabilised wouldn’t be a great outcome; or that they lost the game two years ago when Australia legislated against its resident population betting on the NZ TAB, and 800 accounts went west; or that we don’t co-mingle the trifecta pools with Australia because some VIP customers get rebates as high as 21% in an effort to keep turnover up; or that 400 to 500 people will have to be let go at NZRB to keep racing’s 60,000 full-time, part-time and volunteer participants in the game.

But wait, there’s more!: NZRB has initiated the Audit and Efficiency Report which is required this year under the Racing Act of 2003. But because the NZRB is still in place, and officially steering the ship, it will be a soft report.  Half of the Australian fields are missing from the Best Bets. VIP and Elite customers have deserted the ship and getting them back will be difficult.

Minister Winston Peters new legislation will be the industry’s saving grace, but its effectiveness is still limited to the quality of the people appointed to operationalise it. Revenue will flow from new streams such as racefields which MAC has redefined in its 123-page Interim Report as a ‘Betting Information Use Charge,’ and a Point of Consumption tax for overseas operators.

In this month’s budget which the Minister will address with some pre-budget day announcements at next Friday’s Karaka Mixed Bloodstock Sale, a repeal of the betting levy worth around $13 million annually is almost a certainty.

But in the three Cabinet papers written and approved last month, totalling 45 pages, the number of redactions earmarked ‘budget sensitive’ is more than 30 – suggesting racing may be getting more than just the betting levy back, although it has been said that some may relate to comment from Treasury.

Last week Peters said: “Due to the comprehensive and detailed nature of budgets which has been the case for decades now, there will be budgetary announcements made before the 29th of May.” – he needed a venue for those announcements and has decided on Karaka.

MAC Chairman and likely candidate for RITA chairman Dean McKenzie told The Optimist this week: “The progress of the bill is on track, and MAC had a meeting this past Tuesday, and from that, we have updated work plans to the end of June. Everything is going along as planned, but that doesn’t mean everything will be finished by the end of June.

“Several work streams will go past June. Outsourcing is the obvious one – it’s one of the lengthiest –  as it should be because it’s also one of the most important, but we have already stated that previously.

“A lot of work has to be done before July 1st because when RITA takes the seat, it will have a work-plan from MAC – what has to be changed to advance, and the change aspects of Messara’s recommendations. RITA will have a BAU (business as usual) agenda and then the Change Management plan, the reform plan that MAC has been working on based on the Messara Report recommendations – updated to a work plan that shows where it is, and what still needs to be done.

“June 30th is a Sunday, so our target date is June 28th for MAC’s final report to the Minister.”

With maximising revenue for racing a pre-requisite in the Messara Report, and the potential for outsourcing to provide a windfall for racing upfront, McKenzie said, “The sub-committee for outsourcing (RIOEC) is progressing along the lines stated in the interim report. We are trying to get the process right because you can’t get to the end of the process and be worried about the result.

“Because if the process is right, then whatever the result – whether you do or don’t outsource – you are confident all the boxes have been ticked along the way, and whatever the decision is,  it’s the best one.

“Betting Information Use Charge – better terminology for racefields,” continued McKenzie. “MAC prefers that terminology – it describes it better. It’s the information used for betting – and you charge for it. It’s in all our documentation.”

On the question of Section 14 of the current Act and the future distribution of funds to the codes, McKenzie said,  “What MAC has focused on for the industry is making sure we have got revenue for the industry, as soon as we can, and only then are we progressing  – given the tight time-frames within which we are working.

“Only then can we move on to how we distribute it – the simple logic is that if you haven’t got money then no need to worry about how you distribute it. Grant-Thornton has been engaged to do some work for MAC.”

 

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Don't know if de Lore is putting forth the Informant argument but surely the Informants obsession with publishing the form supplement  makes little sense. There would seem little room for duplication in the industry therefore some arrangement with Racing Board to just concentrate on the editorial content should have got Racing Board support leaving the Board to publish the form.

In this case two wrongs don't make a right. The Informant to blame just as much.

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13 hours ago, slam dunk said:

Don't know if de Lore is putting forth the Informant argument but surely the Informants obsession with publishing the form supplement  makes little sense. There would seem little room for duplication in the industry therefore some arrangement with Racing Board to just concentrate on the editorial content should have got Racing Board support leaving the Board to publish the form.

In this case two wrongs don't make a right. The Informant to blame just as much.

' Editorial content'    i.e. very strong criticism -  is exactly what the Racing Board didn't want and couldn't tolerate.   No point concentrating on that....attempts to rein in De Lore were never going to work and are/were completely out of place in journalism.

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A couple of observations.

Firstly Brian de Lore and The Informant.

I accept he meant well but his toxic contributions in The Informant were never going to endear that publication to those from whom they sought resources.....why would you support your enemy ?

Secondly, John Allen only implements the law, The Racing Act, so you cant blame him for the industry’s issues.

Nor can you blame the NZRB, I mean salaries are salaries, market rate is market rate, you get what you pay for, you pay peanuts you get monkeys......and despite the ranting by de Lore the historical efficiency audits claim the NZRB is in fact efficient and effective based on comparable operations ( not sure which but maybe West Australia or Galop France ).

I do agree the new betting platform is a dog but is that John Allen’s fault ? I’d have thought his IT department and whomever advises the NZRB on betting activities should be made accountable before John Allen.

The truth is that racing is buggered, well horse racing is, but that’s as much the fault of NZTR and the club’s as it is that of John Allen and the NZRB. As an industry we have ( as a code ) massive resources at our disposal, but we seem incapable of using them well.

Fixing Racing is one hell of a job, virtually impossible IMO, but blaming John Allen for our problems, problems that he inherited, that preceded him, and wanting to sacrifice him is like blaming your snotty nose because you’ve got pneumonia 

BTW I want to dispel the rumor I’m on the new RITA board ....I was asked informally but declined because I’m too busy.

I’d have been great though.

 

 

 

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Leo

 

What a croc! Adamson got the heave from Fletchers for obvious losses, Allen has proportionately generated bigger losses from a no competition monopoly. The guy got the flick by McCully after his fiasco at MFAT, and palmed him off to his ding dong cabinet mate from Foxton to look after Racing.

Spare me, if you think he shouldn’t be given the heave for bad management, then you clearly know little about what happens in Wellington.

NZRB paid $265K for the Best Bets masthead, check the Balance Sheet. News Media, owners of BB could not believe their luck. A form guide that was going down the drain and the NZRB paid the dough. The man at the centre of that is now a consultant to NZRB, there is your answer.

J Allen has a history of failures in business, this will be yet another because he excessively spends money and creates turnover losses unprecedented by any monopoly business NZ has known.....and it is not his responsibility?

Does this not sink in to your thinking?

cheers

John 

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My response.....just look at the performance of the wider industry this century, and arguably the NZRB before John Allen was appointed....have you forgotten Bonkin’ Bayliss ?

I refer you also to The Fairtax campaign, a movement I had a small role in....what did NZTR do with the proceeds of that exercise ?

Now let’s talk about the clubs....WTF have the clubs done....virtually nothing.... and why not ?

You all want someone to blame because you haven’t got the courage to acknowledge your own shortcomings....but I’ll remind you what they are.

Owners...a selfish group who electively participate in the game but want their hobbies subsidized 

NZTR...a collection of accountants, lawyers, breeders nominees and industry sycophants appointed to a job they’re not suited, devoid of experience, by others of the same ilk who think because they wear a cheap suit to work they’re of superior status to those who actually put on the show in racing 

Punters...it’s called gambling for a reason...it’s doesn't give you a licence to bleat and whinge when you don’t win..

NZRB / Trackside...yes they’re not perfect and some are downright frustrating but when you have no competition you nourish mediocrity, but under the law they aren’t allowed competition so I can’t see how its their fault.

The truth is that racing is buggered, I have after all been telling you as much for about fifteen years now, but to pin the blame on one guy is hardly fair, and it’s not backed up by facts ......no doubt you’ll get what you want soon....another CEO...and racing will continue to slide into oblivion....and you’ll blame the next CEO in due course....and here’s the reason why, here’s the brutal truth..and I’m going to be brutal because you’re a big boy and we’re good enough friends to have this robust convo without falling out.......

Like the majority / rest of this industry you’re too fucking stupid to be able to stand back and differentiate between symptoms and causes.

John Allen is a “symptom”.....the Racing Act and NZTR are the “causes”.

Treating or dealing with a symptom achieves nothing....go treat the cause John.

There’s your 101 lesson for today, take it on board and go teach that thick bastard de Lore the same lesson John.

 

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12 hours ago, poundforpound said:

 

NZTR...a collection of accountants, lawyers, breeders nominees and industry sycophants appointed to a job they’re not suited, devoid of experience, by others of the same ilk who think because they wear a cheap suit to work they’re of superior status to those who actually put on the show in racing 

 

Touche!

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21 hours ago, poundforpound said:

.and you’ll blame the next CEO in due course....and here’s the reason why, here’s the brutal truth..and I’m going to be brutal because you’re a big boy and we’re good enough friends to have this robust convo without falling out.......

Like the majority / rest of this industry you’re too fucking stupid to be able to stand back and differentiate between symptoms and causes.

John Allen is a “symptom”.....the Racing Act and NZTR are the “causes”.

Treating or dealing with a symptom achieves nothing....go treat the cause John.

There’s your 101 lesson for today, take it on board and go teach that thick bastard de Lore the same lesson John.

Right so big boys don't need to get personal. So the question is ..

How much do John Allens symptoms of spending at a  bar for himself or employees cause opinions of the bar owner ???

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Hi Leo

I am not going to inflate the fire by annoying you with detail,  but......whilst I share some similar concerns with NZTR, the industry is a bulk funded platform as per the 2003 Act. So each code gets their apportioned share of the available spare from the NZRB to operate their business.

Your ex mate from the Eastern suburbs spent $22 mil on Typhoon that was chucked in the tip. At 14.5% of turnover, work out the numbers as to the turnover that fired against the porcelain. J Allen has no idea of the value of a dollar.

J Allen is an flee economically. Sold the granite, the purpose built Perone building, and drained the $20 mil of reserves he had when he took up the role. The guy has absolutely no idea what he is doing running a business. He never has run a successful business. Whilst  verbose and interesting to listen to, he is humorous as he no knowledge of what he is talking about.

He has spent the borrowed $25 mil and RITA get the hospital pass to extend the credit line. He is responsible, no question.

You have been there with regards spend versus debt and you have learned, this codger has not learned a skerret from his underwhelming performances at NZ Post or MFAT and we, the industry, are paying the price.

Unless the credit line is extended from August 1st, with turnover dropping as a result of an inferior website performance, the thoroughbred distribution to NZTR to operate the code drops dramatically and so racing has a reduction both in stakes and horse volume. They are all interconnected as a result of a CEO not knowing what the hell he is doing, on any front!!

Turnover drives any industry, yours, mine and racing, when it drops so does the scope of that business performance within any industry. Pure economics 101 my friend.

Cheers

John

 

 

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JC, so why is the greyhound code doing so well ?

As for MS and Typhoon, he’s not my “ex” mate ....and Typhoon was an R&D expense that, if it’d worked, would’ve made the industry wealthy & healthy.

It’s no different to a drug company spending a large share of their profits on R&D.....they usually get it wrong, but occasionally they get it right .....and a wee blue pill synthesized / trialled to treat hypertension has a side effect of making your xxxx go hard.....and you all get rich.

Don't blame MS for that mate, he was only doing what any sensible company executive should do 

I’ll ignore the rest of your rant other than the dire predictions about revenue and debt.....you’re right there...the beginning of the end has commenced 

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Believe me, I know about horses. Horses have been all around me for a long time now, they are great, they are brilliant, they are truly the best animal to carry a jockey around a racetrack. What I have done for horses is truly amazing. Alot of people are saying they wanted me to go on the RITA board. That's what people are saying. That's what I have heard. On two occasions I heard it myself. It's true. Very true. And y'know. I considered it. Yeah I considered it. I did. The phonies that run racing at the moment are not doing a good job. In fact they are doing a very bad job. They shouldn't have a job. And y'know what I would say if I did go on that RITA board... 

You're fired!

Let's make racing great again. 

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9 hours ago, poundforpound said:

JC, so why is the greyhound code doing so well ?

As for MS and Typhoon, he’s not my “ex” mate ....and Typhoon was an R&D expense that, if it’d worked, would’ve made the industry wealthy & healthy.

It’s no different to a drug company spending a large share of their profits on R&D.....they usually get it wrong, but occasionally they get it right .....and a wee blue pill synthesized / trialled to treat hypertension has a side effect of making your xxxx go hard.....and you all get rich.

Don't blame MS for that mate, he was only doing what any sensible company executive should do 

I’ll ignore the rest of your rant other than the dire predictions about revenue and debt.....you’re right there...the beginning of the end has commenced 

MS and the Board at the time got told by the techs very early on that Typhoon would not integrate with Jetbet, but they still preceded. Much like the Triple Trio disaster, CEO’s without racing knowledge seem to like spending money that isn’t their own, and everyone suffers.

Greyhounds are just pokies on legs, they are ideal for fulfilling the needs of the addicted gambler.

And agree with you both, it’s a hard ship to turnaround, seems to be to far gone because of the ineptitude of the at the top.

Sunset industry? Well, they have the right team, they’ve all come from NZ Post.

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4 hours ago, weasel57 said:

I'm gearing that turnover is down 30% since the new app was introduced in Jan ..is this verifiable?

WHY the silence from the board.

If it was a listed company they would be required to make a statement and if they expect or can see benefits starting to accrue from the new platform why can't they say so.

 

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Of course Allen must go, he should have been sacked after the Race Fields Legislation debacle, would have saved the industry $50 million plus they have  blown on the disastrous new platform. Also Gormless Glenda, she has been an absolute disgrace, she has the opposite of the Midas touch in that everything she touches turns to ...... It honestly doesn't matter what they do from now on, the new website is sooo bad all hope is lost. Sadly. There is no bright side, needed people with experience in the betting industry but 20 years ago not now. 

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Quote

Like the majority / rest of this industry you’re too fucking stupid to be able to stand back and differentiate between symptoms and causes.

John Allen is a “symptom”.....the Racing Act and NZTR are the “causes”.

One definition of symptom:  

Quote
an indication of the existence of something, especially of an undesirable situation.
"the NZ Racing Board is plagued by leaks—a symptom of divisions and poor morale"

Yes John Allen is a 'symptom'  and the Racing Industry was in a worrying state financially before his ill founded appointment but he has significantly added and escalated to the situation.

Firstly the blame on his appointment is on the previous Racing Minister who through association guided John Allen towards the CEO position and then it is the NZRB who are accountable for allowing a person to steer an Industry that they represent who had no racing or wagering knowledge at a time when those attributes were most needed to agree for him to be appointed.

The termination of the NZRB Board come July 1st can't come quick enough. The Board is there to protect and improve the financial interests of the NZ Racing Industry which ultimately has been proven over the past few years to not be the case. Yes they didn't have a crystal ball but they fully knew the capabilities (they damm well should have) of John Allen who they in their wisdom appointed to the role of CEO. The person chairing RITA also applied for the CEO role at the time but wasn't even accorded an interview until it was demanded from a sector of the Industry. Unfortunately the old boys network worked against the Industry and as they say the rest is history (just like much of the Industry may possibly soon be). So 5 years on a person who had far more knowledge and experience of the Industry is working on behalf of the Racing Minister to steer the Industry around. Imagine if that person 5 years ago was at the helm, I am sure while things might not still be where the NZ Racing Industry needs to be it would most definitely be in a far better shape both financially and image wise than it currently is.      

So John Allen quite rightly so isn't the sole cause of the precarious financial state that the Industry finds itself into today but he has most certainly added to it significantly by employing ex workmates and acquaintances to be appointed to roles under him knowing fully well that they just like himself had no knowledge and experience of an Industry to work for. Then he listened to people who he believed had far more knowledge and experience of racing and wagering than they in fact have. You couldn't (unfortunately) have a better example of the old term' 'its like the blind leading the blind'.

So five years on the Racing Minister who advised him and the Board that he was the right person for the role has gone, the NZRB Board will be gone in a few weeks and once that has happened eg the ones at the top have exited the CEO should follow very closely behind and I will be very surprised it that doesn't happen and then very quickly he should be followed by senior management and managers associated with the betting platform debacle. The Industry needs and deserves this to happen just as the same scenario would be played out in any Corporation whose Board and management represent the interests of its shareholders.  If any poster believes and disputes that this wouldn't happen in any other Company or Organisation I look  forward to reading their reasoning as to why not.         

 

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Racing Minister Winston Peters has announced a repeal of the betting levy (racing totalisator duty) currently paid by the racing industry to the Crown.

Mr Peters made the pre-Budget announcement when opening the Karaka May sales auction in Auckland today.

The Minister announced that payment of the levy to the Crown will be phased out over a three-year period, with freed-up funds to be redirected to the racing and sports sectors. The betting levy represents 4 percent of betting profits which amounted to $13.9 million in 2018.

"Redirecting the betting levy is a step towards revitalising of the racing industry. It was a recommendation of the Messara review of the racing industry, and was endorsed by the Ministerial Advisory Committee (MAC)," said Mr Peters.

"The funds will be redistributed to the racing Codes and Sport New Zealand, with a proportion set aside to support the reduction of gambling harm.

"This change will provide an important source of revenue for industry investment decisions," Mr Peters said.

"The racing industry plays a vital role in the New Zealand economy, having contributed $1.6 billion to the economy in 2016/17 whilst employing tens of thousands of New Zealanders, many of them young, and boosting New Zealand’s exports.

"It is important that the industry is revitalised and placed on a sustainable footing for the future. Redirecting the betting levy funds is only one of a number of steps the government is undertaking," Mr Peters said.

Last month the Minister also announced a Government agreement to a stepped response to the Messara Report, introducing two new pieces of legislation to bring new governance arrangements and other sources of industry revenue.

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