Racing Reform Bill out of the gates

If you ever wanted to know just how the racing industry is perceived by those who run the country, then tuning into watch proceedings in parliament on Tuesday would have left you with a clear picture.

From being an industry where most of those stalking the corridors of power had at least some passing interest, racing has declined to something from the dim distant past. Most of those speaking were left scrambling to find a tenuous racing tale to demonstrate their connection.  And that was just those on the government’s side of the House.   The Nats, once natural bedfellows of the racing industry, showed a mixture of relief that they no longer had to deal with the seemingly, never-ending demands from the racing brigade and outright antipathy.

The occasion was the first reading of the Racing Reform Bill which is being fast-tracked through select committee and scheduled to be reported back to the House by 11 June.  If you’ve read the RRB and have any thoughts about making a submission to select committee then you will need to be quick.  That window of opportunity, currently open, will slam shut on Tuesday 4 June – the initial date was Monday until someone realised it was a public holiday.

While long-time watchers of the theatre which surrounds our law-making will have seen through much of the posturing and playing of roles on Tuesday, the uninitiated were possibly left astounded.

Here I have to confess that I have, on occasion, watched Question Time at parliament purely for the amusement value.  But the amusement value on Tuesday was limited due to the fact they were talking about something close to my heart.

Even knowing that everyone in the House was playing a role, and  the arguments were focused on not giving a sucker and even break (with the sucker being those on the other side) rather than doing anything to advance the cause of the racing industry, it was not an easy watch.

Make no mistake, politicians don’t particularly like the racing industry. Not all of them are as honest as Gerry Brownlee who described racing as “dull” but scratch any of the hokey old stories told to demonstrate some form of kinship with the industry and you will find a card-carrying opponent to our industry.

Sure, they will show up when they have too – usually around election time, but they would rather have nothing to do with us.

It wasn’t always so.  Back in the ancient past – around the time of the formation of the TAB, whose ownership Mr Brownlee is so keen to determine, many MPs were prominent racehorse owners.

One of the Wellington Cup winners (at Trentham, the track whose name Mr Brownlee struggled to recall) that my grandfather trained was owned by the then-Speaker of the House Sir Matthew Oram.

It made sense for MPs to have some involvement in racing, given that at the time the local racecourse was the perfect place to meet with a wide range of one’s constituents.  This continued to be the case through to the early 1980s.  Former MP Marilyn Waring, while revisiting the fight to get female jockeys licensed, told me she was a regular attendee at the Waipa races during her time in parliament for that very reason.

The world has moved on and politicians have no real need for racing any more.  Of course, the industry itself is not blameless when it comes to the disconnect between the industry and all-but-Winston.

Who wouldn’t lose patience with an industry which, despite numerous Royal Commissions, Reviews and Recommendations designed to drag it (kicking and screaming) into a bright new future, managed to find new and different ways to muck things up?

Is it any wonder the politicians manage to side-step any possible engagement with industry representatives when they are constantly presented with problems and never solutions?

The industry has a long history of shooting itself in the foot with politicians.  Bad mouthing them and their efforts to drag the industry out of the mire and then acting surprised when future efforts to get alongside said politician are met with the cold shoulder.

Racing administrators have, over the years, behaved like that annoying whiny kid-adult who having left home years earlier still can’t understand why his parents won’t keep funding his lifestyle.

Presumably the Racing Reform Bill will get across the line in the prescribed (truncated, according to the Nats) time-frame and we will be off into another brave new future with any amendments or changes agreed upon throughout the process.

While there were some cringe-making comments during Tuesday’s first reading Gerry Brownlee, despite his apparently loathing of racing, did also offer a credible piece of insight into what has helped stymie the industry over the years.

“I think every effort that they’ve made, commendable as it is, falls short because the industry itself have never been prepared to take into their number—to put on their boards, to bring into their fold—people who have a bit of an entrepreneurial bent and a considerable love for the horse racing sport,” he said.

Gerry, you said a mouthful!

 

How one club made a bold decision and lived to tell the story (and they put their stakes up!)

 In the wake of the gnashing of teeth and rending of garments from those associated with clubs whose tracks are destined for closure I felt it was an opportune time to provide some perspective.

As I said last week, a reaction of grief is not unexpected.  However, I was left with the strong impression, after reading several online stories that some of those affected were yet to read the Messara report in full.  What was more surprising however, was the fact that clubs claimed this was out of the blue and unexpected. I realise that clubs in this country are run by volunteers but, unless they were totally removed from the realities of the industry, I find it difficult to believe they were oblivious to the fact we were operating on borrowed time (and borrowed money).

I’ve been in their shoes.  Of the three clubs where I served on committees two were small, country clubs.  We worked hard to keep those clubs afloat, working bees were the norm and the financials were never pretty.

With that type of personal investment there also comes a sense of ownership.  But committees, through the ages, have never “owned” their clubs they are merely caretakers for future generations.  As such they have a duty of care.

I am hopeful that those club representatives who reacted in a predictable knee-jerk manner when contacted by media after the release of the Messara report have now had time to read and digest the report.  I am also hopeful that they are now looking at the big picture and seeing a different future for their clubs.

Just a note here too, if you are gobbing off about the report without reading it then please refer to this segment of my earlier blog post Time to embrace the process and be part of racing’s solution – “Read it through, breathe, read it again.  Sit back, mull it over and ask yourself one question.  Am I going to be part of the solution, or part of the problem?”

If you insist on being one of those people who prefer to live in ignorance or glean your “knowledge” of the detail of the report from the mainstream media, then do the rest of us a favour and do not share your unenlightened opinions with us.  As of Wednesday, when I made my second formal complaint against a mainstream media outlet which persisted in broadcasting and printing mistruths, I decided that I would ignore comment from those who patently have not read the report. Other than to scream at them – you can do that in the Twittersphere by using all capitals – READ THE REPORT! At this stage I have refrained from becoming sweary.

Anyway, for those associated with clubs whose tracks are earmarked for closure who are beginning to see that this might have to be their future I wanted to demonstrate just how it could pan out.

I have often quoted the Feilding Jockey Club as an example of what can happen when a president, supported by his committee and members, makes a very tough, but very brave decision.

To give a little history – Feilding began racing in 1879 and, as stated in Tapestry of Turf it was one of the most prosperous clubs of the time.  In 1905 its two-day Easter meeting recorded turnover of 30,117 pounds.  To put this in perspective the turnover a two-day fixture at Canterbury was 19,784 pounds, while three-days at the Auckland Racing Club saw 27,994 pounds bet.  Things obviously just got better because a meeting at Feilding in 1920 when Gloaming graced the track the on-course crowd of 8368 managed to clock up an incredible 103,000 in turnover.

The club also boasted something which the racing bible claimed was a New Zealand record with Goodbehere family members filling the secretary’s role from 1891 when Edmund Goodbehere took up the position.  Following on from his 33-year reign Edmund’s son Guy served for 30 years before, Edmund’s grandson Brian stepped into the role. His 22-year tenure concluded in 1976, just three years prior to the club’s centenary.

Given its rich – in more ways than one – history Craig McNeill, the club’s president in 1999 did not approach the task lightly when he looked to reshape the club’s future.

Craig recalled the lead up to the decision to sell the Feilding JC property and relocate to Awapuni thus:

Up until 1998/99 season, the Club was losing money, and basically going backwards and reducing its equity very fast.   A stop had to be put in place for this.

“Within the Committee, various members could recall the closure of Ashhurst Pohangina, Marton and Rangitikei Clubs.   They could see the benefit to those clubs who had gone through the process of centralising racing at one particular venue, namely the Awapuni Racing Centre.

“The decision was made by the then Committee to establish a sub-committee to proceed with the relocating of the Feilding Jockey Club to the Awapuni Racing Centre.

“There was a special meeting called for the purpose of discussing the proposed move. There was a presentation made from various industry personnel, mainly on the pro’s and con’s of staying versus moving.  

“The meeting was then asked to vote on the proposed move and there was a clear majority to proceed with the change of venue to the Awapuni Racing Centre,” he said.

What got the decision across the line, with hardly any opposition, was the fact that the presentation to the meeting clearly showed what would happen if the club stayed.

“What a lot of people do not realise, and the other clubs in the country who are facing closure will come to realise, is that moving made us stronger, not weaker,” Craig said.

“We are focused on the community and sponsors like never before and that sees increased investment and attendance at our meetings.”

The Feilding Jockey Club raced for just over 100 years at their last venue, that land after being sold to the Manawatu District Council in 1999 is now part of Manfeild Park.

The move, which saw the club transfer its racing operations to Awapuni, has been lauded as one of the best decisions made by a New Zealand club in recent decades Craig said.

Back in 1999 the Feilding Jockey club struggled to conduct three low-key midweek race meetings at their course and their feature event – the Feilding Cup – carried a stake of just $8000.

“Today the $50,000 Ricoh Feilding Gold Cup is a Listed open handicap with the club offered $232,500 prizemoney on this day, which is more than they paid out for their three meetings in the 1998-99 season,” Craig McNeill said.

Feilding currently runs three meetings at Awapuni, with the RACE Board allocating them the Manawatu Racing Club’s popular ANZAC Day feature meeting, which has provided the club with a second black type feature day.

“The club is in a very strong financial position and is a major contributor to the RACE concept,” Craig added.

Without making the move he is adamant the club would not have survived and he has no regrets about the decision.

“The club would be long gone,” he said.

To those clubs whose tracks are among the 20 slated to close he offers four bullet points:

  • “Embrace this proposed change”
  • “The Minister has given us a once in a lifetime opportunity – take it.”
  • “Do not be afraid of change.”
  • “Engage now with the venue you are looking to move to and start to agree how you can grow your business.”

“Moving gives the clubs a sustainable future and enables decisions to be focused on the customer and community, not on how to keep a derelict facility going,” he said.

Take it from someone who has been there and, instead of adopting a parochial view which would have heralded the club’s slide into oblivion, took bold action and allowed the club to thrive. History, and future racing generations, will thank you.

 

 

 

Much to digest as we absorb the Messara report

Fall out day.  That’s what a racing friend of mine dubbed today.

Friday 31 August 2018 will be remembered as the day those in the racing industry woke up and suddenly found our industry leading news bulletins across the board.

All those mainstream media types, whose exposure to racing previously may have involved being wined and dined by the Racing Board at a major Cup meeting, were in a muck lather.  Without the benefit of any understanding of what went before and the mess we were in, the recommendations of the Messara report had them in tizzy.

They weren’t alone.  The previous night, while the Rt Hon Winston Peters was delivering the report and before it had been released to the wider public, comments on the live stream of the event proved once again that some people should not be allowed near a keyboard.

There was, and still is, much to digest from the Messara report, this blog post will tackle what featured on this morning’s news.  The points most media latched on to, possibly due to their inability to understand the depth of our problems and what has driven us here, related to track closures and TAB outsourcing.

In general media land these have ended up translating as club closures and the TAB being controlled from Australia.

Subtle differences but enough to churn up a feeding frenzy.

Before we delve further into the mainstream media misconceptions here is the full list of recommendations from the Messara Report.  I do recommend that anyone with any involvement in the industry first reads the report in its entirety before making any comment you can find it here:

https://www.dia.govt.nz/vwluResources/Racing-Report-August-2018/$file/Review-of-the-NZ-Racing-Industry-Report.pdf

  • Change the governance structure, so the NZRB becomes Wagering NZ with racing responsibilities devolving to the individual Codes. This will sharpen the commercial focus of TAB operations and improve the decision-making and accountability of the Codes.
  • Establish Racing NZ as a consultative forum for the three Codes to agree on issues such as entering into commercial agreements with Wagering NZ, approving betting rules and budgets for the integrity bodies, equine health & research, etc.
  • Change the composition and qualifications for directors of regulatory bodies.
  • Request that a Performance and Efficiency Audit of the NZRB be initiated under section 14 of the Racing Act 2003, with particular emphasis on the operating costs of the NZRB.
  • Amend the Section 16 distribution formula of the Racing Act 2003 to a more equitable basis for fixed 10-year terms.
  • Initiate a special review of the structure and efficacy of the RIU and allied integrity bodies, to be conducted by an independent qualified person.
  • Begin negotiations for the outsourcing of the TAB’s commercial activities to an international wagering operator, to gain the significant advantages of scale.
  • Seek approval for a suite of new wagering products to increase funding for the industry.
  • Confirm the assignment of Intellectual Property (IP) by the Clubs to the Codes.
  • Introduce Race Field and Point Of Consumption Tax legislation expeditiously. These two measures will bring New Zealand’s racing industry into line with its Australian counterparts and provide much-needed additional revenue.
  • Repeal the existing betting levy of approximately $13 million per annum paid by the NZRB, given that the thoroughbred Code is a loss maker overall, with the net owners’ losses outweighing the NZRB’s net profit.
  • Clarify legislation to vest Race Club property and assets to the Code regulatory bodies for the benefit of the industry as a whole.
  • Reduce the number of thoroughbred race tracks from 48 to 28 tracks under a scheduled program. This does not require the closure of any Club.
  • Upgrade the facilities and tracks of the remaining racecourses with funds generated from the sale of surplus property resulting from track closures to provide a streamlined, modern and competitive thoroughbred racing sector capable of marketing itself globally.
  • Construct three synthetic all-weather tracks at Cambridge, Awapuni & Riccarton with assistance from the New Zealand Government’s Provincial Growth Fund. Support the development of the Waikato Greenfields Project.
  • Introduce robust processes to establish traceability from birth and the re-homing of the entire thoroughbred herd, as the foundation stone of the industry’s ongoing animal welfare program.
  • Increase thoroughbred prizemoney gradually to over $100 million per annum through a simplified three-tier racing model, with payments extended to tenth place in all races.

Now let’s just take a look at those two items which have been the focus of media attention today.

The recommendations around the outsourcing of the TAB’s commercial activities are as follows:

  1. Progress full operational outsourcing of all domestic wagering, broadcast and gaming operations, to a single third-party wagering and media operator of international scale, under a long-term arrangement with the NZRB (Wagering NZ) holding the licence and contracting all operational activities to a selected outsourced operator.
  2. Seek the approval for the NZRB (Wagering NZ) to: • Conduct virtual racing games; • Remove legal restrictions in Section 33(3) of the Gambling Act that prevent the NZRB (Wagering NZ) from acquiring class 4 gaming licence venues; • Conduct in-the-run race betting; • Conduct betting on sports where there is no agreement with a national sports organisation.
  3. Complete the chain of agreements and arrangements to prepare for the outsourcing process including the assignment of Intellectual Property (IP) by the Clubs to the Codes.

Hardly what it was painted as by an over-exuberant AM Show this morning, but that is what happens when an industry is so far off the radar as to be non-existent for most!

Again, I suggest reading the entire report to see all the alternatives which were considered and how these recommendations were reached.

The issue of track closures was one which also tripped up more than a few this morning, with most of the courses mentioned being ones which were labelled to continue.  For some reason the perception seemed to be that those tracks destined end their days would all be country tracks.

There will, of course, be a grieving period for those associated with the following 20 tracks:

  • Dargaville • Avondale • Thames • Rotorua • Wairoa • Stratford • Hawera • Waipukurau • Woodville • Reefton • Greymouth • Hokitika • Motukarara • Timaru • Kurow • Oamaru • Waimate • Omakau • Winton • Gore.

However, as the Messara report stresses, the clubs associated with the tracks would be encouraged to continue to race at nearby venues.  Had the recommendations of the 1970 McCarthy report been acted upon in full then many of these tracks would have closed some 45+ years ago and perhaps we may not have required such bold actions now.

The recommendations around track closures, which also includes those around prizemoney (the positive news which appears to have been overlooked by the general media) follows:

  1. Reduce the number of existing thoroughbred racing venues in New Zealand over the next 6 years by 20, from 48 to 28 venues, and establish Cambridge as a new synthetic track racing and training venue within 1 year, so making a total of 29 venues. Sell all freehold racecourse land of the closed venues with the proceeds to accrue to NZTR. Maintain racecourses in all regions of New Zealand where racing is currently conducted. Not require any Race Clubs to close but encourage them to race at another venue or merge with another Club.
  2. Significantly improve the racing and facilities infrastructure at all remaining tracks over the next 6 years and build 3 synthetic racing and training tracks (including Cambridge) over the next 3 years, at an estimated total cost of about $190 million.
  3. Fund all the proposed capital expenditure by the sale of surplus freehold racecourse land, grants from the Provincial Growth Fund for the synthetic tracks and co-funding by some Race Clubs. Clubs racing at retained venues (or NZTR as per recommendation 5 below) should also be required to sell any surplus freehold land holdings to help co-fund infrastructure investment.
  4. Build an exceptional new racing and training venue in the Waikato within the next 8 to 10 years at an estimated cost of at least $110 million and then close and sell the Te Rapa, Cambridge and Te Awamutu racecourses to fund the development. There would then be 27 thoroughbred venues racing in New Zealand.
  5. To allow for recommendations 1 to 4 to be implemented, amend the Racing Act 2003 and any other relevant legislation to provide for the vesting in NZTR of the ownership of freehold racecourse land and other net assets of Race Clubs. This would allow NZTR, if it decided not to issue licences to a Race Club/s to hold any race meetings at a venue, to then take possession of the Race Club/s freehold racecourse land and sell the land with the proceeds being used to benefit the entire thoroughbred racing industry. The proposed amendments to the Racing Act 2003 should also facilitate the ability of NZTR to negotiate loans, secured by the freehold racecourse land, to fund infrastructure investment before the freehold land of the closed venues is sold.
  6. To introduce a simplified 3 Tier structure for New Zealand thoroughbred racing and a simplified Prizemoney Matrix that will provide for about $110 million of prizemoney (up from $53.7 million in 2016/17 and an estimated $59.4 million in 2017/18), including 6th to 10th prizemoney, subject to the implementation of the other recommendations in this report. All races at the same meetings to have the same minimum prizemoney whether they be an Open Handicap or a Maiden race.
  7. To introduce the measures described to reinforce the importance of good corporate governance practices by Race Club controlling Boards or Committees, to improve the Race Club management skills of CEOs and senior staff and to lift the NZTR minimum acceptable standards for racecourses in terms of the presentation of racing tracks, training tracks and facilities infrastructure. Increased attention should also be given to ensuring the adequate training of all Race Club staff and, in particular, track maintenance personnel.

If you have managed to get this far then you will realise that this report is not a “once over lightly” effort.  There is depth and the type of insightful and intelligent analysis which, had it been present at NZRB may have precluded the need for a report.

Over the following weeks I will be unpacking the report and, with luck, following its progress through to implementation of Mr Messara’s recommendations in their entirety.

As our Racing Minister said last night,”Many will have plenty to say,”  however I encourage them to take on his advice to “judge [the report] against what is critical for the industry to survive.”

The Minister, as he concluded his address last night, ended with the words Brutus spoke to Cassius in Shakespeare’s Julius Caesar:

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

This quote adorned my office wall for many years.  A reminder to seize opportunity when it came so as not to be left rueing what might have been.

As the Minister said last night, we can either accept parochialism and poverty or use Mr Messara’s report as a blueprint for survival.

Missing the mark with media

If ever you needed an example of how far below the radar New Zealand’s racing industry is travelling, there was a glaring one on Newshub’s AM Show this morning.

While talking politics with, surprise, surprise, political reporter Tova O’Brien, host Duncan Garner queried the connection acting prime minister Winston Peters has with racing.  It would appear that, like the racing minister, the industry itself has little relevance when it comes to this show.

In the past there have been cringeworthy interviews around the NZ Derby meeting – focus being fancy hats and how much the trophies are worth.  Prior to the yearling sales there was a confused introduction of Sir Patrick Hogan with Garner claiming he was about to have “one last crack at the Karaka Million.”

Racing, once part of the nation’s fabric, is de trop and something which retains the stigma of back-alley betting shops and aged beer-swilling smokers, at least with this news outlet.  So much for the marketing and communications efforts of the six-figure salary earners in Petone!

Every step of the way those charged with promoting the industry have missed their mark.  They have failed to mark out a place for an industry which contributes $1.6 billion to the economy.  Their sole focus with media is on top end events.  Hospitality for media types at these events is more about the food and booze in isolated marquees rather than checking out the stars of the show and giving them an authentic experience.

It’s probably not their fault as one would expect few of those who work at the Racing Board have had an authentic racing experience themselves.  They certainly have no grasp of the industry’s rich history.

For example, here we are, coming up to the 40th anniversary of the first day women rode against men in New Zealand (15 July 1978).  Today females make up around half the riding ranks, some are even second-generation jockeys and there are numerous fantastic story opportunities.  If we are relying on anyone from the NZRB to lead the way when it comes to celebrations and some media acknowledgement to mark the occasion then, I imagine, we will be left disappointed!

The incredible story around “letting” women ride against the men has been there since day one and this one could even appeal to Duncan Garner and the AM Show crew – well, maybe not Mark Richardson!

While the industry hierarchy may have had to been bitch-slapped into allowing women to apply for licences once they took that step they ensured there was no discrimination when it came to pay scales.  From day one – 40 years ago – female jockeys have been paid the same amount as their male contemporaries.

Given the cacophony in the general media around gender equality – especially in the area of pay equity – this is one story which the industry should be shouting from the roof-tops.

I imagine there is a reason that the six-figure earners at the NZRB aren’t trumpeting this one (apart from the fact that any reference to pay rates might focus more unwanted attention upon the $60 million in salaries which the organisation siphons out of the industry).  Most likely it is that they probably don’t know (and don’t care) because they are so far removed from the industry they work for they wouldn’t have the first clue what jockeys are paid.

I can’t imagine any of them have ever used any of that six-figure salary to enjoy a share (or two, or three) in a horse and therefore are aware of the actual costs of racing a horse in New Zealand.

It is no wonder then that media outlets like Newshub continue to think of racing as some misty, murky relic of the past – populated by the likes of Winston “and his mates.”

Those who are charged to do as follows – via the Racing Act 8 Objectives of the Boards  The objectives of the Board are – (a) to promote the racing industry – have failed dismally and will not be missed upon their (hopefully imminent) departure!