by Brian de Lore
Published 20th September 2021
In the interest of writing a positive slant on the thoroughbred industry, a searching effort to find an uplifting and positive twist on the business has once again drawn a blank and delayed this post, so it’s The Optimist as usual.
Thinking hard about where the thoroughbred industry is heading long-term is an exercise in extreme frustration. Why, when you take the helicopter view of the business, which shows we are trending downwards, cannot the so-called leaders of the business get together and devise a plan to arrest the decline and futureproof this once great game?
Why, also, can’t the appointed administration simply follow the legislation delivered to them 15 months ago, known as the Racing Industry Act 2020? One reason could be they haven’t read it. Another might be that they’re arrogant enough to ignore it – precisely what NZRB did under Glenda Hughes and John Allen. A third reason could be the presumption they’re endowed with brains, which at this stage is unproven.
Clause 17 of the legislation:
17 Racing codes must prepare business plan
(1) Before the start of a racing year, each racing code must prepare a business plan relating to that racing year.
(2) Each racing code must publish a copy of its business plan on an Internet site maintained by or on behalf of the code.
So, where’s the plan? There is no plan; the industry lurches forward in a drunken stupor, not knowing where, how, why, or when. They posted a paper on the website called “Industry Reshaping – Our Actions, NZTR Strategic Priorities. It’s not a plan, though; it’s just nonsense.
The content of NZTR’s reshaping paper is enough to make you nauseous. It starts with a message from the NZTR Board and CEO saying – ‘A Time For Action.’ This introduction finishes with this one-liner, “It’s time to stop the talk and take action.” Well, Bernard, that’s what the racing industry has been saying about you for the past three years.
The paper is divided into seven parts, and under each of its seven headings, it states: ‘What success looks like,’ – as though they would actually know what it looks like?
Meaningless NZTR gobbledygook
The first of the seven says: “We have looked beyond the domestic wagering market, enhancing the racing product through adapting timeslots to support wagering broadcast opportunities, the introduction of key initiatives and feature events within the racing calendar. We have grown revenue, maximising the domestic market and focusing on international growth through, firstly, Australia and internationally, via a broader range of partners.
“We have innovated in key customer periods of the year to drive greater punter and mainstream interest, showcasing the sport in multiple ways. The focus is on growth and the subsequent returns this will provide owners and participants.”
Have you ever read more BS than that? I haven’t; worse than this poorly written spin by someone on a six-figure salary as the voice piece for NZTR, is they expect you to believe it, keep calm and carry on, whatever it’s supposed to say.
NZTR has sunk to new depths. They don’t have a plan, despite the legislation; they have a cartel board of mates that decide your future in a pub at the Viaduct; they have a Chair that resides in Australia that won’t return before 2022; they have a CEO on a substantial salary that won’t leave a positive legacy, who will return to Australia in July and will never be seen again; they have a board with little appetite to increase stakes from the minimum up; they have one of their mates ready to succeed Saundry as soon as he’s in the departure lounge.
“If you fail to plan you are planning to fail”
A man named Harold Ickes simply said, “I am against Government by crony,” and it was Benjamin Franklin who said, “If you fail to plan, you are planning to fail.” Ickes and Franklin between them have defined NZTR.
So, where are the ethics, and where are they taking the industry? The one-word answer is ‘nowhere.’ Tweaking bits and pieces and closing down clubs to consolidate their financial position by stripping assets is only an interim and temporary fix and won’t curb the long-term decline, only slow it down.
This board hasn’t recognised its big challenge – to redefine the entire model and get $100 million annually into stakes and incentivise owners to reinvest instead of departing racing, never to return.
Half the NZTR board, including the Chair, are anecdotally quoted as saying they don’t believe increasing stakes from the bottom up is the answer to racing’s woes. These people are as deluded as the anti-vaxxers relying on their personal immunity to disease to fight off COVID. Have they never studied the Australian model?
…no awareness of the reasons for which they exist
So, why have we ended up with an NZTR board that no one in the industry wants? A board that doesn’t have a plan to post, which it should have done according to the legislation, a board guided by a poorly written constitution (doubting they have ever read it), and a board that appears to have no focus or awareness of the reasons for which they exist.
How long do we have to keep quoting Albert Einstein’s definition of insanity – doing the same thing over and over again and expecting different results.
The Racing Industry Act of 2020 says in Clause 15 under Functions of the racing codes:
(b) to develop and implement policies that are conducive to the overall economic development of racing conducted by the code and the economic wellbeing of people who, and organisations which, derive their livelihoods from that racing.
The 50 to 60,000 people in racing are working full-time, part-time, or volunteers plus the owners, trainers, etc. However, that five-figure number is now diminishing at an alarming rate due to the unsustainable way this industry is currently run.
The NZRB (later RITA and now TAB NZ) managed the TAB, but ignored a similarly worded 2003 legislation, and the funding was recklessly misused for its own expansive administration. That’s why we went from a cash and property-rich position of $104 million in the green in 2005 only to waste the lot and owe the bank $45 million by the year 2020.
Horse welfare first, owner welfare last
In the recently altered NZTR Constitution under the sub-title of Objects, the narrative fails to mention anything about a commitment to the people earning their living from racing, but prioritises horse welfare.
It states: “The Objects of Thoroughbred Racing are to develop and promote racing conducted by Thoroughbred Racing, as required by section 14 of the Racing Industry Act 2020, and in particular by: (a) Promoting and advancing thoroughbred racing in all its forms in New Zealand; and (b) Maintaining and striving to further improve conditions that support positive welfare outcomes for thoroughbreds in New Zealand; and (b) Considering and dealing with all matters submitted to Thoroughbred Racing in accordance with this Constitution and the Rules.”
We all know horse welfare is now an essential part of the horse business. Bernard Saundry talks with constant regularity about how well NZTR is doing with it, and COVID, but you never hear him talking about the urgent need to arrest the diminishing number of owners and horses or an urgency to get minimum prizemoney up.
The numbers don’t lie. The foal crop is annually diminishing as previously highlighted on this weblog. The number of individual starters in New Zealand has dropped 36.6 percent in the past dozen years. Not counting COVID year 2020, in 11 years, the number of races run has declined 19.6 percent between 2009 and 2019. The stats quoted here come from the back pages of the 2021 NZTBA Stallion Register – go check them!
Again, taking out COVID year 2020, the total prizemoney distributed in the same 11 years has risen only 2.5 percent – $58.4m in 2009 to $59.4 in 2019. In Australia in 2009, the distributed prizemoney amounted to $471.4m. By 2019 it was $807.5m, a rise of 71.3 percent (Australian Racing Fact Book stats), and that doesn’t consider the substantial increases we have heard about for this season.
11-year stakes money score: NZ 2.5, Australia 71.3
A New Zealand stakes rise of 2.5 percent, against Australia’s 71.3 percent. Let me say that once more – 2.5% NZ v 71.3% Oz. It’s not a score you will see in rugby, but it’s the 11-year racing score.
Establishing that differential as an actual state of fact, why hasn’t the thoroughbred code taken a long, hard look at itself in the mirror and concluded that only a ‘tip the business upside down’ remodel of the structure with drastic change can arrest racing’s sad and consistent decline.
The current board is incapable, and the system of board appointments and monitoring of the board’s performance by the Members Council has failed the industry miserably. The Members’ Council should be abolished; they are not up to the task.
Before the Racing Industry Act of 2020, NZRB/RITA/TAB NZ wielded a big stick over the codes, but with the devolvement of responsibilities to the codes through the Act, and the ownership of the IP established, the NZTR board potentially has the grunt to call the shots and get positive in a big way.
But ‘slow’ is their middle name. Fifteen months after the Act, a new commercial agreement with TAB NZ hasn’t even reached the discussion table. Under the terms of the Racing Act, the TAB’s objective is to maximise its profits as a wagering service provider to benefit the racing codes. Without a new commercial agreement, NZTR and the other codes cannot hold the TAB to account on meeting its statutory objectives.
The tail is still wagging the dog.
Clause 58 of the Racing Industry Act 2020, titled Functions of TAB NZ, states:
(f) to enter into commercial agreements with each or all of the racing codes or Racing New Zealand (acting on behalf of the racing codes).
Where are the voices of protest from the sector groups, stakeholders, and clubs? To be aware of the history and decline (outlined above), it’s unfathomable the racing industry is standing by allowing it to happen without any sign of positive action from the want of emerging positive leadership.
Recommendation seven of the 17 in the Messara Review is the only course of action to save us from sinking further into the mire. If you don’t know what number seven is by now, then revisit the Review. Partnering the TAB should be the start of a new plan.
The industry requires a revolution to force the issue, and later this year, another NZTR AGM is due.
Apathy is rife in racing. My positive slant this week on racing – start a revolution or die wondering!