Hangfire

RITA - RED ALERT

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RITA - The Board: Dean McKenzie, William (Bill) Birnie, Liz Dawson, Kristy McDonald, Anna Stove, Sir Peter Vela. 

Here's the latest published today from Brian Delore:   Racing sends a strong message to Select Committee

by Brian de Lore  www.theoptimist.co.nz/
Published 21 February 2020

The oral submission hearings held on each of the past two Thursdays have sent a strong and impassioned message to the Transport and Infrastructure Select Committee, and that is: that the racing industry is far from happy with the Racing Bill legislation in its current form.

And the process is far from complete with further submissions taking place in Auckland this coming Thursday before the Select Committee. Following that, and no doubt in consultation with Racing Minister Peters, the next phase of making the necessary alterations with a degree of rewriting to be done before a second parliamentary reading expected to be scheduled sometime in April.

All going well, the legislation will then be up for its third and final reading in June, and hopefully in a narrative much more acceptable to racing’s participants than the government stranglehold theme of control currently on offer.

The elephant in the room is now RITA which has continued its stance with a submission that says 80 to 90 percent of the legislation is okay by the Agency – a claim overwhelmingly in conflict with industry submissions which by and large are supportive of the recommendations of the Messara Review.

Interestingly, the debate on the detail of the 123 clauses of the legislation has taken the heat off racing’s current dire financial position as we move into the second half of the 2019-20 season with the half-year result due to be announced in the next few weeks.

The latest information I have is that RITA needs something like a 21 percent increase ($30 million) to meet the budget it forecast in the SOI, and after the first five months of the season was only two percent ahead of last year. And remember, the TAB received a windfall bonus of $17 million when the All Blacks got eliminated at the quarter-final stage of the World Cup.

The failure of this Bill to address the issues of increased revenue streams and cost-cutting was an omission that didn’t go unnoticed by several oral submitters

The failure of this Bill to address the issues of increased revenue streams and cost-cutting was an omission that didn’t go unnoticed by several oral submitters and, in particular, RACE Incorporated CEO Alasdair Robertson and Stan Alexander representing the Manawatu Racehorse Owners.

The oral submission from RACE is reproduced at the bottom of this blog. Stan Alexander in his statement began by saying he had entered the racing industry only 15 years ago but obviously having a lengthy corporate background, he alluded to how much cash and property value the industry had only 15 years compared to its position today:

He said: “…and now what we have is a betting platform with no tangible value as it sits there, but $35 million of debt. I am not concerned about individual clauses in the Bill, but I am concerned about how this Bill got to this stage.

“When Cabinet approved in principle that the best approach was the Messara Report, and at the same time the Letter of Expectation from the Minister to the RITA board, it said that this Report was providing the best approach to New Zealand Racing to make it financially sustainable, internationally recognised and competitive.

“… how is it we are sitting here now looking at a draft Bill that does not deliver those key factors which said Mr Messara would be the salvation for this industry.” – Stan Alexander

“And as part of this close working relationship,” continued Alexander, “the Minister understands the DIA will attend the RITA board meetings as an observer. If that was the guiding principle of what was to happen, how is it we are sitting here now looking at a draft Bill that does not deliver those key factors which said Mr Messara would be the salvation for this industry.”

Stan Alexander went on to quote Judge Clapham’s submission which also asked why the legislation did not reflect the Messara Review, and then also quoted a number of the Messara recommendation culminating with the failure of RITA to begin outsourcing negotiations.

“It comes back to having confidence in what you are doing,” he continued. “It goes without saying that no industry, business enterprise or activity succeeds when confidence is eroded, and confidence has been eroded dramatically with the arrival of the proposed legislation which fails to deliver the expectations of the Minister and the industry – which has continued that eroding of confidence.

“Clearly, over time, decisions made by NZRB have led to a massive decline in industry solvency. Mr Chairman, as I sit here today I honestly believe the industry is insolvent. We have no hard assets left, but we have a $35 million debt to a bank. Surely, any business sitting in that position – any director sitting that position in a commercial world – should be thinking pretty hard on what they should be doing and what is happening around them.

“If we as an industry continue to operate without full accountability in a truly commercial environment, the same mistakes and decisions will continue.”

“If we as an industry continue to operate without full accountability in a truly commercial environment, the same mistakes and decisions will continue. The proposed legislation does not reflect the truly commercial, competitive approach that the Messara Review envisaged.

And I, for one, don’t have any confidence when I hear a comment like this. It came from the Chairman of RITA at a public meeting, ‘we are tracking along for the first six months in line with budget.’ Then came the caveat, which was, ‘but the next six months will be challenging.’ End of story, just that. So I say to myself, what does this mean while we are staring down the barrel of $35 million bank debt and no hardcore assets.

“What would be the attitude of the bank when RITA has not commenced the outsourcing which was recommendation number seven – in other words, the bank would be saying to the RITA board, ‘are you exploring all your options.’ The bank won’t be at branch level; it won’t be at credit level, it will be at asset management level, and I’m sure some of you understand what that means.

“RITA want exclusive rights to the I.P. and to delay outsourcing for another five to six years – I ask the question WHY? – Stan Alexander

“RITA want exclusive rights to the I.P. and to delay outsourcing for another five to six years – I ask the question WHY? Debts within thoroughbred racing are increasing, the debts in the training sector to the trainers are increasing – those are symptomatic things of the total financial position of the total industry. Breeding is in decline, and it’s all reflecting a decline in confidence.

“Ï say this, why don’t we ask Mr Messara to come back and discuss and clarify how, when, and why, etcetera. His credentials are such that we ignore them to our peril.

“Finally, I just want to put up this scenario: We have a new TAB, it owns all the I.P. We have a banker overlooking them, and if things don’t improve then we have set up the perfect scenario for the bank to say ‘we are taking over and we will sell everything you have got’.

“Mr Chairman, I don’t understand the industry, but I have a little understanding of the commercial reality of this world, and we have a very serious problem. Thank you.

RACE Incorporated Oral Submission:

Select Committee on Behalf of RACE Incorporated

Racing Industry Bill No 2

Good morning, my name is Alasdair Robertson Chief Executive of RACE Incorporated. I am accompanied by Paul Humphries Chair of RACE Incorporated.

RACE is an organization that comprises 5 Clubs being Manawatu, Rangitikei, Feilding, Marton and Wellington Racing Clubs.

Depending on your chosen metric, RACE is NZ’s largest or second-largest club with in excess of 10% of total domestic turnover.

The racing industry in New Zealand is at a watershed/tipping point in terms of its survival and sustainability.

The racing industry in New Zealand is at a watershed/tipping point in terms of its survival and sustainability.

The proposed Bill to go before the Select Committee is the last chance for the industry to be re-structured for survival and to maintain its economic contribution to employment of over 14,000 FTE and over $1.6 bn to the NZ economy.

The importance of getting this right cannot be overstated. We are facing:

  • Declining returns in real terms over time. Return to owners in New Zealand 22.9% or expressed another way -77.1%
  • Foal crop reduction. In 1995 5,264. In 2017 3,448 (34.5%)
  • There has been years of mismanagement and lack of performance from the NZRB
  • The proposed Bill facilitates a situation where a business as a usual structure can continue.
  • To put that in context and why the Codes need to be empowered to efficiently and economically run their industry as recommended by the Messara Review, in 2016 an analysis was done of the operating cost difference between the NZRB / RITA and its nearest comparison in Western Australia.
  • This was found to be in excess of $50 million against a total thoroughbred prize money pool in New Zealand of $50 million at the time.
  • We are competing in a global market with our largest competitor, and opportunity,  in Australia exponentially bigger and stronger than we can ever be.
  • Australia has 5.4 times the population of NZ but 13.2 times the amount of wagering turnover with an inherent propensity to spend of over 4 times that of New Zealand.
  • To enable NZ to survive competition and to access the opportunities that exist, this Bill must empower the Codes and provide them with flexibility to meet the market head-on without bureaucratic constraints and parochial thinking.
  • The Messara Review was commissioned at the behest of the Minister of Racing the Hon Winston Peters and was welcomed by the Industry.
  • John Messara is the most respected racing administrator in Australian history and has presided over a boom in the racing industry not just within New South Wales but within Australia overall.
  • In the last 20 years Australian turnover on thoroughbred racing has climbed from $8.6 billion to $19.5 billion AUD +126%, and prizemoney from $273 million to $603 million +120%.

A number of key elements were critical to turning around the NZ industry in the Messara Review:

  • Change the Governance structure such that NZRB is to become Wagering NZ with racing responsibilities devolved to the individual codes.
  • Establish Racing NZ as a consultative forum to agree on issues
  • Amend section 16 to a more equitable basis for fixed 10-year terms
  • Begin negotiations for outsourcing of the TAB’s commercial activities
  • Confirm the assignment of Intellectual Property by the clubs to the codes
  • Introduce Racefields and Point Of Consumption legislation
  • Repeal the betting levy
  • Clarify vesting of club assets in the codes for the benefit of the industry
  • Reduction in venues without the closure of any club
  • Unfortunately, the proposed Bill does not honour the intent or detail of the Messara Review.
  • The Bill is also significantly at odds with the Minister’s letter of expectation sent to RITA.
  • It is important that the Committee realizes that the industry is struggling to survive and we need real dollars and not just a re-arranging of the deck chairs.

So to turn to the Bill. I have confined my presentation to three key items.                           a. Industry Governance and appointment of Directors to the TAB

  1. The intention of the Messara Review was to confer broader powers on the codes to govern and administer their industry.
  2. Consistent with the Messara Review, Racing NZ was proposed as a consultative forum to agree all internal issues that needed group resolution. This would include outsourcing negotiations.
  3. The Messara Review proposed the devolution of Governance responsibilities to the Codes.
  4. The current Bill, however, proposes the dilution of control from the codes to the Minister and to Wagering NZ/TAB NZ.
  5. This is seen in:

    i. The governing body of TAB NZ consisting of up to 7 members appointed by the Minister (46)
    ii. TAB NZ is to determine the Racing Calendar for each betting year and issue betting licences (48)
    iii. TAB has exclusive rights within NZ and Australia to all intellectual property associated with all betting information etc (81)
  • It is recommended that the Bill be amended to have a code body representative or adopt the nominations advisory panel mechanism used in the Racing Act 2003 (Pre Amendment) for the appointment of independent Directors.

b. Intellectual Property

  1. Clubs and Codes have never surrendered their Intellectual Property

    2. The MAC Report acknowledges ownership of IP in the Club.

    3. Intellectual property can never be surrendered by the clubs and the codes.

    4. To do so will disenfranchise and emasculate the clubs and codes permanently and empower a 3rd party to conduct themselves in any way they see fit.

    5. The Codes and TAB NZ must collectively be able to negotiate all outsourcing and related matters that requires IP by having it assigned to the respective negotiating team.

    6. The mechanism is that the Clubs vest their IP in the Codes who Licence the joint negotiating team of the Codes and TAB / Wagering NZ.

    7. We have a supportive person in our Minister. However, that may not be the case in future and the loss of IP from the clubs and codes endangers our very existence and the potential sale or Joint Venturing of the TAB.

It is recommended that Clause 81 be deleted to preserve the status quo in relation to the use of Racing’s intellectual property.

c. Outsourcing structure or more accurately joint venture or partnership structure

This Bill has been drafted by people who appear to crave control and do not understand the global wagering market.

i. There needs to be a separation between TAB NZ and Government. An outsourcing decision is a commercial decision in the best interest of the industry.

ii. This Bill has been drafted by people who appear to crave control and do not understand the global wagering market.

iii. The codes and the TAB must have the ability to make a commercial decision regarding joint venture outsourcing. If there were any Government concerns over inappropriate periods or similar, a Ministerial caveat could be included for any decision relating to sale or contractual commitment beyond a specified term eg: 15 years etc.

iv. Australia is forging ahead because the Codes operate as commercial negotiating entities with independence of Government.

v. It is interesting that Tabcorp has been used as an example by RITA to say it follows the same commercial model as has been proposed in the Bill, and has professional Directors on its Board.

vi. Nothing could be further from the truth in terms of the commercial model and demonstrates the lack of understanding within RITA and within the Bill.

vii. Tabcorp is a commercial entity BUT is accountable to the Codes and the contractual agreement and licence negotiated by the codes.

viii. This commercial tension is enabled by the retention of IP within the codes which is 180 degrees different from what is proposed.
ix. What is proposed is to insert a 3rd independent party into the process that has no checks and balances on its direction or philosophy and has exclusive control over the Codes intellectual property.

Most people do not understand the implications of this Bill. It threatens the Messara Review and could be likened to a monopoly without any of the suppliers having shares or any representation.

Summary:

Most people do not understand the implications of this Bill. It threatens the Messara Review and could be likened to a monopoly without any of the suppliers having shares or any representation.

Thank you for the opportunity to present.

P Humphries, Chairman                                                       A Robertson, Chief Executive

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Whatever happened to RITA's Shaun Brooks? 

Shaun's the former Chief Financial Officer for the New Zealand Racing Board/RITA, and a man who surely has had contributed much to the industry's declining economic position in recent years.

Shaun tagged along with John Allen to the roadshow meets around the country and was employed as part of the senior management/leadership team since Oct 2015 up to sometime late in 2019 (I guess).

Looking today, Shaun's disappeared off the RITA website and into obscurity, I can't recall a media release giving him a pat on the back and wishing him well as he explores new career opportunities and seeks to spend quality time with family. 

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On 2/22/2020 at 1:52 PM, Hangfire said:

Shaun's the former Chief Financial Officer for the New Zealand Racing Board/RITA, and a man who surely has had contributed much to the industry's declining economic position in recent years.

Post of the year thusfar.

 

Greg

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On 2/22/2020 at 1:52 PM, Hangfire said:

Whatever happened to RITA's Shaun Brooks? 

Shaun's the former Chief Financial Officer for the New Zealand Racing Board/RITA, and a man who surely has had contributed much to the industry's declining economic position in recent years.

Shaun tagged along with John Allen to the roadshow meets around the country and was employed as part of the senior management/leadership team since Oct 2015 up to sometime late in 2019 (I guess).

Looking today, Shaun's disappeared off the RITA website and into obscurity, I can't recall a media release giving him a pat on the back and wishing him well as he explores new career opportunities and seeks to spend quality time with family. 

If he is gone hope it the first of many...useless bunch most of them..blood sucking leaches.

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Re RITA... I think it’s too early to judge them but I have to say I’m alarmed and amazed they could let the Racing Incompetence Unit merge with the JCA to become judge, jury and executioner when there are so many ( true ) allegations of chicanery and fabrication of evidence swirling around that Incompetence Unit at the moment, mostly around Inca .. and to rub more salt into the wound they appointed yet another ex cop to head the new shit show... that’s fucking bizarre 

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On 2/22/2020 at 1:52 PM, Hangfire said:

Looking today, Shaun's disappeared off the RITA website and into obscurity, I can't recall a media release giving him a pat on the back and wishing him well as he explores new career opportunities and seeks to spend quality time with family. 

Might the above be linked to this is today's rag

" "There's been a coding error, a reconciliation report error and a manual transaction error which means we're $3.8 million behind where we expected to be."

 

Greg

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Notice that the TAB has approached the Government for a financial handout because of a projected massive drop in revenue. Chief Operating Officer Stephen Henry has issued a plea for senior TAB staffers to reduce their hours. Odds on this won’t happen. Ironic that he has at last got his head around the fact that the bloated expenses of the TAB need to be reigned in.

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42 minutes ago, gubellini said:

Notice that the TAB has approached the Government for a financial handout because of a projected massive drop in revenue. Chief Operating Officer Stephen Henry has issued a plea for senior TAB staffers to reduce their hours. Odds on this won’t happen. Ironic that he has at last got his head around the fact that the bloated expenses of the TAB need to be reigned in.

They might have to , can't see them having many other places to go and work.

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56 minutes ago, gubellini said:

Odds on this won’t happen. Ironic that he has at last got his head around the fact that the bloated expenses of the TAB need to be reigned in.

Do you think it might have something to do with "Having a new Boss"?

 

Greg

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23 minutes ago, eljay said:

New broom sweeps clean - but there was nothing there to sweep so they made a mess to try and look smart.    Hasn't worked - has it?

On the nonsense scale the last bit reaches the top 10/10. You do talk some rubbish.

Greg

 

 

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22 minutes ago, Pam Robson said:

Of course they have to...not to do so means admitting their utter inability to grapple with a modern wagering environment.

We have been living beyond our means for years,  had to happen.

Yip. Thankfully this may have forced the reality issue and 5k stakes may be optimistic.

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4 hours ago, gubellini said:

eljay quite apt that the song Stuck In The Middle With You was a big hit for Stealers Wheel. TAB senior management have been asleep at the wheel for years and with their policy of jackpotting betting pools have been stealing off punters for years as well.

Logic would say that if a terminating pick 6 is popular why not make it the rule rather than the exception, and if you agree with that then surely those bullshit jackpots should go as well!! Who in their right mind wants a partial win ?, who wants to win less money? Some bets are linked to aussie racing rules but there are a heap of others that are not and should all terminate and give punters an incentive to win bigger with the same investment.

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11 hours ago, gubellini said:

Notice that the TAB has approached the Government for a financial handout because of a projected massive drop in revenue. Chief Operating Officer Stephen Henry has issued a plea for senior TAB staffers to reduce their hours. Odds on this won’t happen. Ironic that he has at last got his head around the fact that the bloated expenses of the TAB need to be reigned in.

Given the Govt is just about to hand out $12B can you see them dipping in again to bail out this lot Gub...? Will be a real test for Peters.

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Public message to Dean McKenzie,

[For the record, when I spoke to him on Wellington Cup Day he said that.... "he was living the dream as this is what he has trained for all his life".]

Sorry Dean,

The shit has hit the fan, as it has for all of us, in our lives at some time.

It's time to come out and tell us exactly what is currently happening within the TAB with or without legislation change, because if drastic measures are not taken now, it will be too late, irrespective of what the Bill does or doesn't do.

Take a leaf out of Air NZ or Qantas's book if you need a lead.

P.S. Alan Jackson suggested to me on Saturday at Trentham, [Oaks Day] that a major announcement was expected on Wednesday. Well Wednesday has been and gone, so what was the announcement Alan?

I am wondering if anyone in charge knows what is going on! :rcf-sad-4:

 

 

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3 hours ago, von Smallhaussen said:

owners may well be racing for total $5,000 stakes next season - how convenient they just blame the virus! 

You are dreaming , $5k , not likely , more like hold the line at very best on Saturdays and $2k midweek , in fact why not can midweek NZ racing altogether and get it all from Ausse , it's officially a TV  only  event now and will be for the foreseeable future .  Face it racings only going one way , perhaps abandoning mid week racing would be a boost for the remaining meetings .

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