NZ First

Winners are grinners, until you delve into the figures!

/ Mezzasez

Forgive me for the length of this blog post as I set out to write about one topic and then I had a winner!

Yes, one of the fab four in which I hold varying sized shares rocked up at Ruakaka and showed the world what a Galloping Weka can do.  Wekaforce, a daughter of Showcasing and Spera, was introduced to me by Janine and Les Wallace and so I joined the large team (including several mates) which races her from Tony Pike’s stable.

Wekaforce showed she might have an interesting career in front of her with a smart winning effort at her first trial at Te Teko recently and hence she found herself today in a two-year-old race.

While Vinnie Colgan had been on board at the trial his unavailability today meant Michael “The King” Coleman climbed on board.  It had been a couple of decades since he last won for me, I reminded him via text last night. “Couple? Try three,” was his pithy reply – obviously my various trainers weren’t putting him on enough!

So, long story short Wekaforce showed she was well named and added to Showcasing’s ever-growing band of winners with a four and a quarter length victory.   Vinnie may have difficulty prising Michael off in the future!

As I’ve written previously, it’s always a huge buzz when you have a winner and great fun when you can share it with your friends.  However, as I’ve also written before we are all in this for the love of it and that excitement because the financial returns just aren’t there at the moment.

I feel confident as I write “at the moment” thanks to the promise of the Messara overhaul.  At last it feels as though someone might slash through all the wastage at the NZRB resulting in increased returns to those who are actually forking out to put on the show.

So, in a convoluted way that brings me to the original topic I had in mind before I got side-tracked by a winner!

Racing’s contribution to the nation’s economy has been laid out in some detail in the latest Size and Scope report produced by IER for the NZRB.

IER have a long-standing relationship with the Racing Board, having conducted research at Summer Festival and other key meetings over the past six years.  The company brands itself as a boutique business consultancy which specialises in the areas of research, strategy development, economic and social impact studies, and performance measurement in sport, racing, tourism and the entertainment industry.

I must confess that I did nag NZRB CEO John Allen as to when the document might appear online, having read that it was due around now.  To his credit within days the report surfaced exactly when promised yesterday afternoon.

Much of what is reported should be widely known by those at the coal face and, while I will focus on a few points here, I recommend checking out the original 90+ page document if you are interested in looking at how the industry is tracking in your own region or if you want more detail around the other two codes.

The big numbers are around the industry’s value-added contribution to the country’s economy which sits at $1.6billion – $1,633.5m to be precise.

We also employ 14,398 FTE, with 46% of these employed as a direct result of racing activity (take a bow NZRB, you’re likely to be top of the heap here, if not with numbers employed then definitely thanks to your wage bill).

When it comes to the other figures I have only concentrated on the thoroughbred code and, please note, the numbers relate to the 2016-17 season.

The total number involved in our code is 34,768 which is made up of 3,705 breeders; 15,951 owners; 1013 trainers; 228 jockeys; 2633 racing club and industry staff; 6475 staff employed by participants; and 4,763 volunteers.

During the period under review we welcomed 3,354 live foals, while there were 6,376 thoroughbreds in training.  The majority of these – which I am sure will come as no surprise – were in the Waikato, with 46.9% trained in the industry heartland.  The next two regions, which are each home to 12.7% of the total were Taranaki/Manawatu-Whanganui and Auckland.

During the past season in the wording of the Size and Scope study the “thoroughbred training activity is responsible for generating more than $274 million in expenditure impacts in New Zealand.”

Now remember, this is just the cost for those in our code and while I know we are all incredible optimists this figure just confirms it.  So, we paid $274m to get our thoroughbreds to the races and, at the end of the season, the money distributed to the THREE codes by the NZRB was $135m (according to the IER report) or $137.6m (according to the NZRB Annual report).

Apparently, we’re meant to be ecstatic to be racing for $10,000 minimums (yeah great, 30 years ago winning a $10,000 race paid your training fees for a year, I hate to think how quickly the winner’s share of today’s $10,000 race will be eaten up).

What I find really galling is the fact that the Board wants us to be grateful for that minimum level and the fact they are “giving” the industry $137.6m.  All this while they recorded operating costs of $136.3m last season.

We’re also meant to be grateful that they’ve reeled themselves in a little bit and dropped those costs by $5.1m (3.7%) from the previous season.

If the chairperson of the board is to be believed we’re all idiots and we simply don’t understand why they’ve had to spend so much over the years.  Witness this little snippet from the NZRB’s Statement of Intent 2018-2020 – “The reasons for the historically increasing trends in NZRB’s operating costs over the decade to 2014 have not been well understood in some sectors of the industry,” she said.

Rather than explain to us plebs why it was necessary to spend so much instead we get the old policeman tactic of  “move along folks, nothing to see here” and  Glenda tells us: “However, the key point now is that the current Board and management are succeeding in reducing NZRB’s year on year normal operating costs.”

If that is the key point then the Messara report can’t come soon enough!

In the meantime I shall raise a glass to Wekaforce and the Galloping Wekas team – we might not get rich but we are anticipating plenty of fun based on today’s debut win.

Is Messara our messiah?

/ Mezzasez

Is the light finally appearing at the end of the tunnel?

Last week’s announcement that John Messara would be reviewing the New Zealand industry’s governance structures before providing recommendations for its future direction had many industry stalwarts celebrating.

Messara, based on his efforts with Racing NSW and Racing Australia, is seen as New Zealand racing’s potential messiah. He has certainly shown himself to be incredibly astute in the operation of Arrowfield Stud, having employed several talented Kiwis!

While he is familiar with our industry he also lacks the parochialism which seems to stymie any local attempts to drive the industry forward. What will be interesting is how Messara will consider the needs of three conflicting codes. That is something which proved a bridge too far for previous chairmen of the NZRB who, for every financial contribution to one code, were then faced with the other two, hands out and demanding the same amount!

According to the Racing Minister, Winston Peters, Messara’s review – which is expected to be presented to government by the middle of the year – will “also assist the government in determining if the current Racing Act 2003 and the proposed Racing Amendment Bill are fit for purpose.”

The 2003 Act gave us the poorly written Section 16, the cause of much gnashing of teeth at the absolute absurdity of it all. For the benefit of those who have never actually read Section 16 it states as follows:

Amounts of distributions to codes

(1)

The Board must, as soon as practicable following the end of a racing year, determine the amount to be distributed among the racing codes for that year from any surpluses referred to in sections 53(2) and 57(2), or any other source whether capital or income.

(2)

Unless a majority of the racing codes otherwise agrees in writing, the amount referred to in subsection (1) must be not less than the total of the surpluses referred to in sections 53(2) and 57(2) for that racing year less the total amount credited to reserves for that year from those surpluses.

(3)

Unless a majority of the racing codes otherwise agrees in writing, the amount referred to in subsection (1) must be distributed among the racing codes in the same proportions that the Board considers are the proportions to which the codes contributed to the New Zealand turnover of the Board for that racing year.

(4)

In subsection (3), New Zealand turnover of the Board means the total gross amount received by the Board from racing betting placed in New Zealand on races run in New Zealand.

While on the subject of the Racing Act, Section 16 and the like, I have often been astounded at the number of people who work within the industry yet have no idea of the responsibilities of the various bodies.

The NZ Thoroughbred Breeders’ has come to the party with a fabulously simple explanation in their latest Bulletin, so big ups to them for the following:

https://www.nzthoroughbred.co.nz/site_files/13893/upload_files/blog/68426NZTBAonlineBulletin-Aprilrev.pdf?dl=1

Anyone who is a little confused about who does what when it comes to the Minister, NZ Thoroughbred Racing or the NZ Racing Board should check it out.

While their explanation included Section 8 (c) “The objectives of the Board are – to maximise its profits for the long-term benefit of New Zealand racing” I probably would have hammered the point home a little more by including Section 9 (a) which reads as follows:


Functions of Board

(1)

The functions of the Board are—

(a)

to develop policies that are conducive to the overall economic development of the racing industry, and the economic well-being of people who, and organisations which, derive their livelihoods from racing:

If John Messara can deliver us a blueprint for policies which can do that then he may very well be remembered as New Zealand racing’s messiah.  

Karaka announcement a fizzer

/ Mezzasez

Underwhelmed – was the prevailing reaction to the much anticipated announcement from Racing Minister the Right Honourable Winston Peters at Karaka on Sunday evening.

 

There was a touch of Trump in Peters’ opening remarks where he claimed he had never promised a “big announcement.”  That should have been a clear precursor to what was to follow in his bid to make racing great again.

 

Peters cherry-picked from NZ First’s 10 point racing policy – primarily revisiting taxation to encourage investment.  Reacting to the impact of numerous meetings being lost over the past season due to a combination of outrageous weather and poor track management, Peters also promised an all-weather track.  

 

To get across the line the track, at a yet-to-be-confirmed location, although touted to be the Waikato; at a yet-to-be-confirmed cost, though quoted in some media sources to be in the vicinity of $10million; still needs to be approved come budget time in May.

 

The one sentence which could well have met with universal approval would have been a commitment to “urgently review the operations and costs of the New Zealand Racing Board.”

 

The fact those words were not included in Peters’ speech makes me question the NZ First definition of “urgently”.

 

It was an opportunity missed.  Readers of this blog will be familiar with the excesses of the NZRB when it comes to richly rewarding the multitude who work there while the ROI to the industry stagnates.

 

Yesterday, as National party politicians Stephen Joyce and former racing minister David Bennett were enjoying hospitality at the yearling sales their leader Bill English, reacting to the proposed all-weather track, was questioning the need for taxpayers to contribute.

 

While English recognised the importance of an all-weather track he said he believed the industry should be able to fund it.  Perhaps that might have been an option if the NZRB wasn’t providing so many of its largely useless staff a six-figure lifestyle funded by the sweat of industry participants.

 

Prime Minister Jacinda Ardern when addressing the taxation proposals told Newstalk ZB yesterday that the industry was facing rising costs and diminishing returns.  She added that the coalition agreement between Labour and NZ First included a commitment to support NZ First’s Racing policy.

 

“In areas where we are relative to other international industries, if there comes a disincentive to invest in your domestic industry and more incentive to invest overseas, then you have to look at your competitiveness,” she said.

 

While those with skin in the game were debating the location of the all-weather track, online feedback on many news sites saw plenty taking swipes at what were largely described as handouts to the “wealthy” racing industry.

 

“If it’s such a multi-million dollar industry then why are taxpayers paying half?” was a common theme.

 

The perception of the industry from the outside is that it is populated by high-flyers.  Why wouldn’t they think that when, for the week leading up to the sales at Karaka, racing and breeding make their annual appearance on mainstream TV?

 

The general public see people racing for $1million stakes; glossy yearlings being paraded and sold for six (and occasionally seven) figure sums; overseas buyers being wooed with fine wine and sumptuous food.  

 

What they don’t see are the go-round meetings where we are still racing for stakes which haven’t increased exponentially with the cost of having a horse in work.  They don’t see the vendors in the later days of the sales struggling to get a bid, or the legwork being done by trainers to fill bargain-basement syndicates.

 

The reality of the industry is largely hidden.  Take a look at the financials of most racing clubs and it doesn’t make pretty reading.  At the end of the day a bunch of volunteers – who are incidentally, becoming more and more difficult to attract – are battling to keep racing afloat.

 

We have fundamental problems which have failed to be addressed due to a lack of funds.  In the meantime staff expenses at the NZRB still total in excess of $60million. They are down from 2016’s $66m down to $63m – at that rate in another dozen or so years they might have salaries about where they should be!

 

The Racing Minister also gave us a reminder to be positive.  That would be a little easier if we knew he was going to make good on the one policy point which could see some serious money return to the industry.  

 

Urgently review the operations and costs of the New Zealand Racing Board – sooner, rather than later please Winston!

 

 

 

Racing policies left in the gates

/ Mezzasez

I had every intention of sharing and analysing the racing policies from each party in a timely fashion leading into Saturday’s election, but the pollies didn’t make it easy.

 

My initial requests were sent back in June. How hard could it be, right? My expectation was that there would be – at the very least – a document from the previous election. It could’ve been dragged out from wherever it was hidden away,  brushed off, tarted up and sent back out into the world. But no, it wasn’t that easy.

 

At this stage, I have to give a vote of thanks to the much-maligned Greens, who at least got off their butts and provided something in the way of policy.  Even if it did threaten to do away with the Racing Minister.

 

Interestingly, with the exception of Winston Peters, I believe that most of the other parties would (at least inwardly) support that move. They don’t really like racing people – it probably comes down to lack of understanding around the Racing Bill and how much government can actually do for them.  Answer: not a lot!

 

They also point to industry hierarchy opening encouraging the industry to support NZ First purely based on their racing policy. That policy hasn’t changed greatly in the past three years but, when I emailed some questions asking for more detail around how the stated goals would be achieved I was told the query had been forwarded to the senior media team.  

 

All I can say is that the senior media team must be pretty damned busy putting out all the fires in Winston’s wake because in spite of several follow-up emails I am still waiting.

 

Labour’s racing spokesman Kris Faafoi was pretty proactive responding to my initial request and, again after several follow-ups, the policy did appear.  He was also happy to address any questions around it.  I emailed some but again…still waiting.

 

The Nats, with our current racing minister David Bennett, should’ve been way more proactive. They are the guys with their fingers on the pulse and the minister should be across industry concerns.  I lost count of the interactions I had with his office (and the mind-numbingly moronic replies).

 

By the time I got the email advising me their policy was up online I had pretty much lost the will to live.

 

Meanwhile, Winston managed to steal a march with a story appearing online which erroneously claimed his was the only party with a racing policy. This was then followed by another story – which was basically a different version of the same story churned out every three years – where Sir Patrick Hogan extolled the industry to support Winston. Purely based on his “support” of the industry.

 

Just a matter of days before the election Winston is looking likely to – once again – be the Kingmaker.

 

Whether racing will be any better off is anyone’s guess.

If you do want to check out what Labour, National and NZ First have to offer check out their racing policies:

 

https://d3n8a8pro7vhmx.cloudfront.net/nzlabour/pages/8556/attachments/original/1504503634/Racing_Policy.pdf?1504503634

 

https://www.national.org.nz/racing

 

http://www.nzfirst.org.nz/racing