Nerula

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However, to realise these opportunities, we need to change.
To this end, ARC and CRC have been liaising for some time on options for maximising the prosperity and best structure for racing in the greater Auckland region. We have also been engaging with Avondale Jockey Club (AJC) to explore wider options.
Following this process, we believe that the best available option for our industry is the amalgamation of ARC and CRC into a new club. The new amalgamated club will continue to explore options with AJC as to their role in the current and future of racing in the Auckland region.
This merging of ARC and CRC and the use of our collective assets will allow us to more than double our income over five years. We believe this will allow us to deliver:
• Doubling of average stake levels per race from $50,000 to $100,000
• At least 40 race days per year on an international standard track at Ellerslie (achieved via the installation of a new StrathAyr surface)
• Ten races worth $500k per year and three races worth $1m per year
• A racing scene that attracts owners, trainers, jockeys, and punters
• A financially viable regional racing club.
These potential benefits have been confirmed by independent analysis carried out by Deloitte. The conclusion of Deloitte’s report is included at the end of this letter.
It is important to emphasise that this proposal is not finalised. In the coming weeks we will provide more detail on the proposal and consult widely with you for your feedback on it.
However, out of good faith and in light of the fact that we understand AJC is engaging with its members on potential next steps for them, we thought it was important to update you on our progress in this area.
This is an exciting time for horse racing in our region. We look forward to discussing this important work with you and how we can collectively ensure a bright future for horse racing in Auckland.
Yours sincerely,

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1 hour ago, Nerula said:

These potential benefits have been confirmed by independent analysis carried out by Deloitte. The conclusion of Deloitte’s report is included at the end of this letter.
 

Nerula, presumably you got that letter as a member of either, or both of, the clubs involved.

Any chance of a looksie at the Delotte's analysis - or is it embargoed to members only?

Edited by Disillusioned
Fat typing fingers!

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2 minutes ago, Disillusioned said:

Nerula, presumably you got that letter as a member of either, or both of, the clubs involved.

Any chance of a looksie at the Delotte's analysis - or is it embargoed to members only?

Make sure Deloittes aren't the company that advises City Councils on the financial impact of building a stadium in your city.

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9 minutes ago, Disillusioned said:

Nerula, presumably you got that letter as a member of either, or both of, the clubs involved.

Any chance of a looksie at the Delotte's analysis - or is it embargoed to members only?

The Deloittes report will be released to members first.  I will then aim to circulate a copy as this is for the whole industry.

I am personally conservative in what a report like this can offer for the cost.  It is often like a mystery shopper, it tells you what you already know.  However to not get a report like this done by professionals would be careless to say the least.

This report backs up what we already knew.  Its exciting.

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1 hour ago, shaneMcAlister said:

Hi all

We at CRC are real excited about this possibility.

If minimum stakes for 40 weekends of the year are $60-$80K then suddenly it appears a lot more exciting to race a horse in NZ. 

A consistent product to grow punters confidence and therefore turnover.

 

I might be missing something Shane. What has the CRC got to offer ARC that will suddenly allow such a huge Stakes increase? Surely this financial "mist' is predicated on the troika of Auckland district clubs getting their hands on Avondale's $200mil of dosh.

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5 minutes ago, chevy86 said:

I might be missing something Shane. What has the CRC got to offer ARC that will suddenly allow such a huge Stakes increase? Surely this financial "mist' is predicated on the troika of Auckland district clubs getting their hands on Avondale's $200mil of dosh.

I would love a hint as to how merging two clubs suddenly doubles income. And it does say double income, rather than reducing admin costs etc. And it isn't relying on any contribution from Avondale at this time, although I see something is imminent there as well.

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So this new entity will put up great stakes , i'm all for it , is this done in conjunction with NZTR . Or is this the new super club , in the super city , deciding for themselves . If they are it's going to look a bit silly , 50k races every week there but the rest of NZ still competing for 10k . Hopefully NZTR have improved stakes by the time this all gets going and stakes as a whole are on the up .

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20 minutes ago, chevy86 said:

I might be missing something Shane. What has the CRC got to offer ARC that will suddenly allow such a huge Stakes increase? Surely this financial "mist' is predicated on the troika of Auckland district clubs getting their hands on Avondale's $200mil of dosh.

Currently Counties races 12 times a year, with 1 big day that makes money when weather is right.  We lose money each year.  Traditionally CRC has sold land to extends the lifeline.  However we all know we cannot carry on like this.

What CRC has is land that has been recently rezoned to mixed business.  A merger with ARC would provide funds to develop this land rather than selling it and provide future income.

CRC would then invest in training facilities with aim of having up to 300 horses trained oncourse.  In our opinion it is essential that there is a northern training facility for the future of the sport.

This is purely about NZ racing having a future, and a substaniable bright one.

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1 minute ago, nomates said:

So this new entity will put up great stakes , i'm all for it , is this done in conjunction with NZTR . Or is this the new super club , in the super city , deciding for themselves . If they are it's going to look a bit silly , 50k races every week there but the rest of NZ still competing for 10k . Hopefully NZTR have improved stakes by the time this all gets going and stakes as a whole are on the up .

Hi nomates.  NZTR's hands for stakes distribution is always tied in with TAB's earnings.  Hopefully a consistent track grows betting.

This is done for the future of NZ racing as a whole.  There are a lot of details to go through but it will work.

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3 minutes ago, shaneMcAlister said:

Hi nomates.  NZTR's hands for stakes distribution is always tied in with TAB's earnings.  Hopefully a consistent track grows betting.

This is done for the future of NZ racing as a whole.  There are a lot of details to go through but it will work.

So the quote about doubling stakes from 50k to 100k is turnover based , it reads more along the lines of improved club revenue streams will allow the new club to achieve this irrelevant of turnover . But if it is done in conjunction with NZTR and they can't afford to match it everywhere else then does your new club still do it . Don't think i'm against this , i'm not , this is what should be happening , very positive if it goes ahead . Hopefully other clubs around the country will look at this and see the opportunities .

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4 minutes ago, nomates said:

So the quote about doubling stakes from 50k to 100k is turnover based , it reads more along the lines of improved club revenue streams will allow the new club to achieve this irrelevant of turnover . But if it is done in conjunction with NZTR and they can't afford to match it everywhere else then does your new club still do it . Don't think i'm against this , i'm not , this is what should be happening , very positive if it goes ahead . Hopefully other clubs around the country will look at this and see the opportunities .

Heaps of detail to go through yet. But lets say NZTR contribute $10 every year, the merger earns $20.  This gives you $30 to spend. 

The aim of this is to improve all NZ racing, calculations are done without an increased distribution from NZTR.

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11 minutes ago, shaneMcAlister said:

Heaps of detail to go through yet. But lets say NZTR contribute $10 every year, the merger earns $20.  This gives you $30 to spend. 

The aim of this is to improve all NZ racing, calculations are done without an increased distribution from NZTR.

I get that but that is what i'm trying to say , I don't mind if NZTR are giving you guys more , hopefully by then they are in a better financial state to give you more , but what about the stakes elsewhere , if NZTR are funding everyone the same as you and other clubs haven't got the revenue streams that you have they are going to be stuck paying the same miserable stakes whilst you guys are sitting in the sun . My point being it will be a bit lopsided if NZTR don't get stakes up across the board .

Again i say i think what you guys are proposing is great , NZ racing has to remodel , big time . I have been around racing for decades , and i think i have seen the best of times , 70's , 80's and 90's , but times have changed and we need to look to the future , i just hope we don't leave too much collateral damage , in the shape of industry participants , whilst trying to change .

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8 minutes ago, nomates said:

I get that but that is what i'm trying to say , I don't mind if NZTR are giving you guys more , hopefully by then they are in a better financial state to give you more , but what about the stakes elsewhere , if NZTR are funding everyone the same as you and other clubs haven't got the revenue streams that you have they are going to be stuck paying the same miserable stakes whilst you guys are sitting in the sun . My point being it will be a bit lopsided if NZTR don't get stakes up across the board .

Again i say i think what you guys are proposing is great , NZ racing has to remodel , big time . I have been around racing for decades , and i think i have seen the best of times , 70's , 80's and 90's , but times have changed and we need to look to the future , i just hope we don't leave too much collateral damage , in the shape of industry participants , whilst trying to change .

Not sure how it all works out.  If you are training south of Taupo at least there is improved stakes in NZ.  A young trainer may move to Waikato or Counties instead of Oz.

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54 minutes ago, nomates said:

I get that but that is what i'm trying to say , I don't mind if NZTR are giving you guys more , hopefully by then they are in a better financial state to give you more , but what about the stakes elsewhere , if NZTR are funding everyone the same as you and other clubs haven't got the revenue streams that you have they are going to be stuck paying the same miserable stakes whilst you guys are sitting in the sun . My point being it will be a bit lopsided if NZTR don't get stakes up across the board .

Again i say i think what you guys are proposing is great , NZ racing has to remodel , big time . I have been around racing for decades , and i think i have seen the best of times , 70's , 80's and 90's , but times have changed and we need to look to the future , i just hope we don't leave too much collateral damage , in the shape of industry participants , whilst trying to change .

Might force other regions to collaborate to come up with similar plans?

Be great if I can think about sending a horse to Auckland rather than Oz.

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https://www.lincolnfarms.co.nz/stories/100-000-average-stakes-and-a-new-track-flagged-in-merger-of-auckland-and-counties/

 

$100,000 average stakes and a new track flagged in merger of Auckland and Counties

Barry Lichter

By Barry Lichter • 9 November 2020

A proposal to merge the Auckland Racing Club and Counties Racing Club would see average stakes doubled to $100,000 and racing conducted at Ellerslie on a new international standard racetrack.

In revealing the plans today, Auckland Racing Club chairman Doug Alderslade and Counties Racing Club chairman Mark Chitty said the amalgamation of assets would see income doubled in five years and finance 10 races worth $500,000 each year and three annual races with a $1 million stake.

Talks are also continuing with Avondale Jockey Club officials on how they can be involved and its club members are due to discuss the plans at a meeting on Tuesday.

While the proposal has not been finalised, and will now be opened for wider consultation, the chairmen describe the plan as an exciting development for the future of racing in the Auckland region.

“Our clubs need to focus on creating a vibrant and sustainable future for racing in the Auckland region that delivers for all industry participants.

“The status quo is simply not sustainable. While we must cherish our past, it is essential that we adapt and change as an industry for the betterment of all.

“There are real and achievable opportunities to significantly improve the financial returns for the industry and to have a new beginning for racing in our region.”

The proposal would see a new StrathAyr course built at Ellerslie, hopefully by 2022, similar to tracks at Moonee Valley in Melbourne and Kranji in Singapore, a surface capable of standing 40 plus meetings a year.

Pukekohe would be retained as a training centre but the opportunity would be there for increased income through the sale or development of unneeded land.

The potential benefits have been confirmed by independent analysis carried out by Deloitte which recommended the amalgamation proceed.

Auckland Racing Club CEO Paul Wilcox said the anticipated stakes would be a huge boost for the industry - “we could retain young people who could then see a future for racing in New Zealand.”

The proposal comes after nearly two years of negotiations between the Auckland clubs.

Avondale support

Sources say the Avondale Jockey Club acknowledges the need to join forces with a merged club and will be making a number of recommendations to its members tomorrow, to be voted on at the annual general meeting on November 26.

The track was originally slated for closure but was latterly granted five dates this season, predicted on it making progress on its future in the Auckland region.

Avondale failed to come to an agreement on a merger at a meeting of the three clubs in July, the sticking point being a sudden stop to racing at Avondale.

The Avondale club pointed to the model used in Sydney in 2011 where the Australian Jockey Club and Sydney Turf Club merged and the Canterbury Park track was transitioned out under a 10-year moratorium. The AJC believed an eight to 10 year transition was an appropriate swan song.

Among its recommendations now are:

* It wants to develop policies to allow the Avondale track to be used to the end of the 2025-26 season. It sees Avondale as a crucial venue to ensure that racing in Auckland continues while the new track is being built at Ellerslie.

* It seeks members’ support to create wealth by reducing Avondale’s racing footprint through the development, sale or lease of redundant land.

* It hopes to develop an asset sharing plan between the merged clubs whereby the Avondale site is ultimately to be closed.

Avondale seeks to secure its long term future as a racing club that races at Ellerslie, while still actively supporting a transition that would see racing at a single venue in Auckland.

Remember this Deloittes Report from around Covid19 locking down New Zealand

https://www.lincolnfarms.co.nz/stories/racing-board-ignored-deloittes-warning-about-significant-risks-with-new-betting-platform/

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Am I right in thinking that the increased stakes are going to be funded by selling off surplus land owned by Counties, without any further reform of the racing industry?  It reminds me of the money that Winston Peters put in to a few big races, one at Hawkes Bay worth a million dollars, what happened to that?

Counties has already flogged off a lot of the commercially zoned land it had - it entered into a disastrous joint venture with a developer to develop the site which now houses The Warehouse.  it was supposed to deliver riches to the club but instead it walked away but pretty much nothing.  The developers had a field day dealing with a president who fancied himself a bit too much. 

Thinking that selling off some assets will allow for stakes increases into the future is just dreaming.  There will come a day when those assets are all gone and the clubs will have nothing to fall back on.  Installing a Strathayr track will provide a good surface but will not save racing in Auckland.  Comparing Ellerslie with Moonee Valley is like comparing apples with pears - Moonee Valley has Friday night racemeetings that are packed.  The place has atmosphere.  The only day Ellerslie draws a decent crowd is Boxing Day. 

Sorry but selling assets to provide stakesmoney is a short term fix.

 

 

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2 minutes ago, departed said:

Am I right in thinking that the increased stakes are going to be funded by selling off surplus land owned by Counties, without any further reform of the racing industry?  It reminds me of the money that Winston Peters put in to a few big races, one at Hawkes Bay worth a million dollars, what happened to that?

Counties has already flogged off a lot of the commercially zoned land it had - it entered into a disastrous joint venture with a developer to develop the site which now houses The Warehouse.  it was supposed to deliver riches to the club but instead it walked away but pretty much nothing.  The developers had a field day dealing with a president who fancied himself a bit too much. 

Thinking that selling off some assets will allow for stakes increases into the future is just dreaming.  There will come a day when those assets are all gone and the clubs will have nothing to fall back on.  Installing a Strathayr track will provide a good surface but will not save racing in Auckland.  Comparing Ellerslie with Moonee Valley is like comparing apples with pears - Moonee Valley has Friday night racemeetings that are packed.  The place has atmosphere.  The only day Ellerslie draws a decent crowd is Boxing Day. 

Sorry but selling assets to provide stakesmoney is a short term fix.

 

 

Re past sales etc, we are where we are.  Everyone would love to do things differently.

A big part of this merger is so that land no longer has to be sold.  ARC and CRC can develop future revenue streams together.  

Pukekohe Park races 12 times a year (only one big meeting), the rates alone are in the vicinity of $120K plus a year, insurance $70K.  Without change it is not sustainable.

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8 minutes ago, departed said:

Am I right in thinking that the increased stakes are going to be funded by selling off surplus land owned by Counties, without any further reform of the racing industry?  It reminds me of the money that Winston Peters put in to a few big races, one at Hawkes Bay worth a million dollars, what happened to that?

Counties has already flogged off a lot of the commercially zoned land it had - it entered into a disastrous joint venture with a developer to develop the site which now houses The Warehouse.  it was supposed to deliver riches to the club but instead it walked away but pretty much nothing.  The developers had a field day dealing with a president who fancied himself a bit too much. 

Thinking that selling off some assets will allow for stakes increases into the future is just dreaming.  There will come a day when those assets are all gone and the clubs will have nothing to fall back on.  Installing a Strathayr track will provide a good surface but will not save racing in Auckland.  Comparing Ellerslie with Moonee Valley is like comparing apples with pears - Moonee Valley has Friday night racemeetings that are packed.  The place has atmosphere.  The only day Ellerslie draws a decent crowd is Boxing Day. 

Sorry but selling assets to provide stakesmoney is a short term fix.

 

 

That's exactly what it sounds like they are not doing. Sounds like a sustainable way forward to me.

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