An Important Topic

[Berri 2,131]

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

[barryb 2,064]

No, if its $80m, then goodbye racing.

There are far more important issues facing NZ than that, should have farking got its house in order long ago.

[shaneMcAlister 1,425]

That’s the major problem we are throwing money into a machine that loses money. 
 

$80m would be a good amount to start afresh with. 

[SMD is rife 211]

Why would the government bail out an organisation when the idiot who caused the problem (Glen Saville) is still there?

[Leggy 4,093]

35 minutes ago, Berri said:

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

That's not true.

In addition to the measures and activity referred to above NZTR:•Has reduced payroll and contractor costs by 20% since the shutdown of racing including the salaries ofBoard members by 100% and the CEO by 25%

[tasman man 11 979]

100 % the TAB needs to keep trading.

100% the TAB needs new Management

100% the Codes need new Management.

100% start with a clean slate.

100% the TAB should be  a profitable business....it is.....no business can keep spending more than it earns !

Racing may need to lower their expectations re Funding for stakes as Sports Betting continues to rise

Overseas racing already attracting a lot of betting ,add the incr of Sports betting and NZ racing needs to cut its cloth.......the costs to run the TAB need to be more realistic .

Colossal blunders re recent capital expenditure need revisiting and sorting.

This debt , should an incentive for the TAB and racing codes to sort themselves out.......say good bye to smoke and mirrors.....the Annual Report didn't even say who they were getting the money from for that Betting platform 'investment'.

 

 

[nomates 3,609]

36 minutes ago, Berri said:

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

I agree the problem for me is not getting any more money but giving it to the feckwits that have been continually pissing racings income up against the wall because they simply have no idea how to use it . I wouldn't let them run a lemonade stall .

[Berri 2,131]

7 minutes ago, Leggy said:

That's not true.

In addition to the measures and activity referred to above NZTR:•Has reduced payroll and contractor costs by 20% since the shutdown of racing including the salaries ofBoard members by 100% and the CEO by 25%

Missed that one. Where was that published?

[Berri 2,131]

Just now, Berri said:

Missed that one. Where was that published?

And when?

[Leggy 4,093]

1 minute ago, Berri said:

Missed that one. Where was that published?

https://loveracing.nz/RaceInfo/30080/Meeting-News-Article.aspx

[Leggy 4,093]

1 minute ago, Berri said:

And when?

April Fools Day.

 

[Kingshill 233]

Hard to see the government cough up $80m to prop up racing.... There was a public outcry when the government was going to give $30m to Team NZ going back 10 or 15 odd years ago

[Kingshill 233]

That being Team NZ.... America's Cup yachting 

[d.burrow - Joan 224]

1 hour ago, Berri said:

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

Given the current state of affairs in this country at the moment, I wouldn't for one minute expect the Government to bail out the TAB and thus the Racing Industry!

EXCEPT the mess we are currently in, happened under or through political [Government] appointments, in particular I refer to John Allan and Glenda Hughes.

 

[Pam Robson 1,551]

3 hours ago, Berri said:

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

 No way.  Put them into statutory management and a team might be found that knows what it's doing.

[Ohokaman 5,844]

3 hours ago, Berri said:

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

That would be No......

[Patiti 274]

They are already in a form of management with RITA taking them through to a new entity on 1 July this year.

They should then be able to trade at an improved profit once things get back to a semblance of normality.

Not too sure about Dean as Executive Chair but that puts him in direct control of BAU while planning what the new entity will look like.

I would say give him a chance to prove it can work so that it can stay local and support the local industry.

[2Piper 408]

4 hours ago, tasman man 11 said:

100 % the TAB needs to keep trading.

100% the TAB needs new Management

100% the Codes need new Management.

100% start with a clean slate.

100% the TAB should be  a profitable business....it is.....no business can keep spending more than it earns !

Racing may need to lower their expectations re Funding for stakes as Sports Betting continues to rise

Overseas racing already attracting a lot of betting ,add the incr of Sports betting and NZ racing needs to cut its cloth.......the costs to run the TAB need to be more realistic .

Colossal blunders re recent capital expenditure need revisiting and sorting.

This debt , should an incentive for the TAB and racing codes to sort themselves out.......say good bye to smoke and mirrors.....the Annual Report didn't even say who they were getting the money from for that Betting platform 'investment'.

 

 

The problem is the TAB has a monopoly in NZ  (physically) . The codes need to vent their frustration with the new betting platform and get change. Old website was better. Could actually watch your race without it freezing periodically as it does now when online. Prefer to listen to radio commentary but thats gone at the moment ( hopefully to return after lockdown regulations are lifted). Shame as my weekends are much the same,  have livestock to attend to  .(Weekdays  are now not 14-16 hour working days) .

[Baz (NZ) 1,722]

The TAB Web-site like John Allen & Glenda Hughes is a complete DOG!  $50 million + $17 million per year piece of

[tasman man 11 979]

15 hours ago, Berri said:

Been doing a fair bit of thinking lately....plenty of opportunity to do it.

I hear that most public company executives are taking a salary hit. No word from our leaders in respect of RITA and the NZTR on the matter.

I hear that before this virus hit, RITA asked for $20m extra from government because it ran out of money.

I hear that things have since collapsed further to move RITA into a negative equity position thereby making RITA technically insolvent

I hear that the FOB platform is failing despite having the opportunity to bet on some things

I hear that $80m is the potential RITA bailout position

So here ponders the question....

If RITA requests an $80m bailout, and we have the current people doing the same thing, the same way without something new, are you happy to add another $80m to the slate to keep going the same way?

Really interested in the response.........

 

 

 

Few have answered ,but I think it would be fair to assume that an overwhelming majority of the racing fraternity do not want to keep going the same way.

We want change !

Seems to me that the NZ TAB with increasing opposition in wagering from overseas ,plus the gains made in sport betting tried to stay abreast with the play hence their poor decision to upgrade to an expensive betting system which was not fit for purpose.

Meanwhile our two main racing codes ,who basically controlled the TAB , insisted on their demanded Funding for their codes which were dropping significantly in popularity and significance.....hence the current situation.

Even in the last year when changes were being demanded ,NZ Racing folk still seemed to be insisting on the same payouts for their ailing businesses as previous.

Had the emphasis been on increasing their product and turnover and getting the TAB to concentrate on reducing its operating expenses [especially salaries] then this mess could have been averted.

But lack of collaboration in NZ Racing and bias and regionalisation has thwarted NZ Racing for 40 years.

Hence Messara called in.

Isn't hindsight great !

[Ohokaman 5,844]

CRAZY STUFF – $381,250 per week paid to top 135 RITA employees – and we have no racing!

April 19, 2020 AAP

by Brian de Lore
Published 17 April 2020

We have no racing; we have no idea when Jacinda & friends will permit the resumption of racing; the TAB is likely to be in breach of the law for trading while insolvent; racing falls further into debt as each week passes.

The 135 employees quoted in this headline is really 136 but because Executive Chair Dean McKenzie who took over from John Allen on January 1st is on an unknown remuneration, he is left out of the calculation. They are not my figures but come from a reputable accountant equally concerned about the current state of racing and its apparent inability to adjust to the moving floor beneath it.

Salary Range	Employees	Cost per annum	Average cost
NZ$100k-$150k	98	11,690,000	122,000
NZ$150k-$200k	28	4,870,000	174,000
NZ$210k-$390k	11	3,265,000	297,000
Total	135	$19,825,000

The cost of the infamous gravy-train. If 50% of the cost of these employees were gone tonight it would save the stakeholders of racing enough money to run an extra Saturday weekly eight-race card at $24,000/race.

A second, reputable and long-standing accountant in the industry, John Aubrey, has made an assessment of the fiscal state of the industry from last year’s Annual Report which is reproduced below. He also emphasises that the 2019 figures now have some age while expressing concern that the half-year result to January 31st has not yet surfaced despite the fact that we are now in the second half of April. You don’t have to be Einstein to understand that New Zealand racing right now is flyblown (as the Aussies would say), destitute, insolvent, impecunious, penniless, impoverished, broke or on the rocks. Everyone knows it, but whatever adjectival description you prefer, no one wants to say it.

Let’s maintain the stiff-upper-lip they would say, as Kiwis with English and Scottish ancestors would have done; maintain your dignity, never say die and carry on to the bitter end. For NZ racing, however, the bitter end might be avoidable if we could only extract the truth and recognise those in charge are clueless. 
RITA is awaiting the outcome of an application for a Government bail-out, citing the COVID-19 as the issue, no doubt. Will the people at Treasury with the Minister of Racing pushing the issue buy into it and give racing an estimated $80 million hand-out/loan?

If it was a level playing field the answer would probably be, no! But in New Zealand politics nothing much is on the level, I would suggest, and the forthcoming answer isn’t one to bet on without inside knowledge.

NOTES ON RITA FINANCIALS by John Aubrey

WHAT IS THE BOARD’S FINANCIAL POSITION?

NOTE: The figures below have been taken from the 31 July 2019 Financial Statements. The statements for the half year to 31 January 2020 are not yet available.

1. The financial statements of the NZ Racing Board (now called Racing Industry Transition Agency, or RITA ) do not show a strong position. As at 31 July 2019, the reported net profit before distributions was $136 million, down on 2018 by $9 million. Distributions to the Clubs and Gaming totalled just on $162 million.(2018, $159 million)
2. The equity or capital (assets less liabilities) of RITA has at 31 July 2019 dropped to a disturbing $24.8 million. In 2016 the comparable figure was $74 million. Go back to 2011 and the equity was $81 million.
3. Where have the funds gone ? The accounts disclose that some $105 million was spent on computer software. Presumably, most of this is on the fixed odds betting platform. This author’s calculation differs from that set out in the notes to the financial statements. Of the total cost, $65 million has been amortised to date leaving a book value at 31 July 2019 of $40 million.
4. In addition to expenditure on betting software RITA was propping up the codes/clubs by payments exceeding the available profit. In 2019 the payments to the codes and sports bodies exceeded the net profit by $28 million and in 2018 by $16 million.
5. The question that must now be asked is simply “is a second-hand betting software worth the $40 million?” Note 19 to the financial statements states that the software has an estimated useful life of 3-7 years and the amortisation is charged annually on a straight-line basis. Note 19 also states that “Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.”  Given the current liquidity issues and the COVID 19 outbreak would the auditors insist on an increased amortisation sum?  If the amortisation was for some reason to be “speeded up” the equity of RITA would be getting close to zero, or worse.
6. On a straight assets less debts calculation, the TAB, or RITA, is worth nothing, However, the real asset is the monopoly right to conduct betting in New Zealand. This comes in two forms. Firstly, the sole or exclusive right for this country. Secondly, the ability to conduct betting over a number of years. In Australia this latter sum is huge, but most of the funds paid have gone to Government for payment of a gaming licensing fee for 20 or 30 years. The value of this intangible asset can be realised only by an outsourcing arrangement or an outright sale of the TAB to another operator.
7. The notes to the 2019 RITA financial statements say only that the broadcasting licences are carried at cost less accumulated amortisation and impairment losses. There is no mention of the term of the licences but the original costs amounted to $2.9 million. The current book value, cost less depreciation or amortisation, is just over $1 million.
8. The RITA has an unsecured revolving credit facility totalling $45 million. $10 million was drawn in the 2018 year and $25 million in 2019, leaving $10 million undrawn. Rumour in the industry has it that this has been drawn down subsequent to balance date.
9. Disturbingly, the 2019 Statement of Financial Position discloses Current Assets of $49 million but Current Liabilities amount to $71 million.
10. Quick Assets ratio. This is the ratio of liquid current assets ($18.1 million) to all current liabilities ($47.8 million). As at balance date 31 July 2019 the ratio is .38. This is very poor. The betting account deposit and vouchers, ($23.4 million) balanced by the trust term deposit of $25 million have been removed from this calculation.
11. The RITA update of 2 April 2020, following the COVID 19 shutdown, makes distressing reading. RITA advise that the product available for betting is down about 75%. The telling comment is on page 2 – “…when we can’t sell any bets we can’t make any money and in fact with the fixed costs of the business (rent, insurance etc) continuing we are losing money.“  Not making a profit means no funds for the clubs.
12. RITA obviously have grave financial issues. If betting cannot be restored to reasonable levels in the next couple of months RITA must surely be close to insolvency. One definition of insolvency is “unable to pay debts as they fall due in the normal course of business” and another, “having liabilities in excess of a reasonable market value of assets held”.

[Ohokaman 5,844]

Other costs to the Industry.....you have to wonder what value we are getting from this sort of expenditure....

 

[Berri 2,131]

Humble apologies Team NZTR. I really meant RITA when expressing exasperation that RITA hasn't informed the industry what its steps have been/ are. 

[Stables 577]

Ohokaman, those sums paid out as per your schedule, are they per week, per fortnight or per month?

[Leggy 4,093]

3 minutes ago, Stables said:

Ohokaman, those sums paid out as per your schedule, are they per week, per fortnight or per month?

They are the wage subsidy payout for 12 weeks?