Garry’s Corner – 24th November
24 November 2017
You know in life you never know if you are too late or too soon. I attended three meetings on Tuesday and of course, all related to racing. The first at Pukekohe was about the productive use of the Intellectual Property Rights entrusted by the clubs to the Thoroughbred Racing Board. I was late having allowed one hour and a half travelling time on leaving Waikato Stud I contemplated how I would fill in my spare until the meeting commenced. I received a call at the start time to confirm my intended attendance as I was creeping along NZ’s main highway at an average of 20 k an hour. Very civilised.
So, 20 minutes into the designated hour-long meeting I arrived. Not that it really matters, to be honest, all of that digital, megabyte, IP debate is a little over my head. I try to come to grips with the intended methodology but really, I might be half a chance but those that have spent their lives in this sphere seem to express themselves at such speed and velocity I am left in the lurch. For all that I think I understand the possibility that we should be able to use this technology to our advantage, it just won’t have me driving it.
From there to a presentation to the stakeholders of our code by the Chairman Allan Jackson and Chief Executive Bernard Sundry. Bernard spoke first bringing stakeholders up to speed on the activities of the Board. His presentation is competent and understandable, I think we may be lucky to have him, his experience is invaluable but the natives are getting restless, being told all that is in the pipeline is fine but if you look down a long pipe the light at the end gets smaller. Allan was next, now you all know from my previous corners I have great confidence in Allan but, a bit like the IP meeting the speed of his thought process is wired at a greater speed than most of the meat and spuds attendees. The guts of his presentation was firstly the opportunities IP will present, then a series of graphs, he likes graphs, indicating where the Thoroughbred Board differed with the Racing Board. We should never have arrived at a situation where the future of our industry is being determined in conflict. I am not pointing the bone at anyone, just saying when we get to, I said, you said, I know, you don’t, and it’s bloody hopeless.
My meat and spuds racing men don’t market their bags half full, so we, those of us at the meeting are being asked to pick sides, who’s right, who’s wrong. There has been commissioned by the Thoroughbred Board, two independent assessments of the Racing Boards SOI, I haven’t seen either but leaked information suggests there may be a better way. So, near the end of the meeting I asked Allan, were the numbers close to rumoured? Yes, so I asked why not release the Deloitte’s report to at least give the industry something to get their teeth in, rather than meat and spuds. Why not! Well, it seems while the Race Fields legislation is being processed we shouldn’t rock the boat. Looking down that long pipe can become claustrophobic, attendees at the meeting were becoming restless, so on to the next meeting.
I started by saying you never know if you’re too late or too soon, well, we the attendees were obviously too soon. The Racing Board who had invited us to the unveiling of the Annual Report had no Annual Reports for our consumption. To be frank, the Report should have been circulated prior to the meeting to enable some scrutiny, the excuse was Winston was doing the Haka in North Korea. Can you believe it? Stopping a nuclear war is more important than our current state of affairs, Winston get your priorities right. John Allan greeted me at the door and copped a serve, now I like John and for all debates, we have had he has never lost his demeanour, which I can’t claim myself, and he deflected my spray with his usual good humour.
I don’t know how many attended but I would guess Racing Board employees and Board members constituted a third of the numbers. The Chair spoke first and a very good speaker she is. She didn’t write the presentation, no they employ Communications managers to do this, and this is unfortunate because the fifteen minutes was a mixture of the confidence she has in her Board and executive, well she should have she put them there, and the difficulty they have had in turning around a poorly run industry previously run by some of the attendees, great stuff but a complete waste of effort.
John followed with his usual exuberance, he had a two slide presentation, so with no previous access to any numbers we probably should stayed at home, and you all know how difficult it is to absorb information and make any sense of it on the hoof is near impossible, but I will try.
Brian De Lore who writes so well was unprepared to ask a question but when all of those sitting on their hands meant there would be none asked. Brian asked John how the money borrowed to sustain stakes would be repaid, you know why you hate asking questions at these events, you don’t get an answer you get a mini-speech. He further asked could John confirm the annual cost of the FOB affiliation with Paddy Power was 17m, confirmed. So from memory without the Report, this is what we were allowed to see, bottom line result of 148m, this includes 10m from the sale of building. Distribution to the Codes around 140m this includes 10m of borrowed money. Costs 200m. So let’s pull together what we have been told about the next few years, a further 10m borrowed for stakes we are told 23m to integrate the FOB, 17m in fixed annual FOB fees, and John assures the meeting this FOB will add 17m to the bottom line next year, further if you recall he guaranteed the 23m borrowed to assimilate would be repaid in three years and two months, remember. If the 20m for stakes is to be repaid quarterly 5m + 7 +the 17m annual fee + the promised 17m to the bottom line requires300m in additional turnover from the racing codes however with a net margin of 4% on sports betting if it is to be funded out increased sports activity which John was very excited by, sports betting turnover will have to increase to by 1200m. …note I said increase, this is a total of 1740m.
Now let’s talk about the elephant in the room, any such growth will see a change in the Board structure, we might have seen the start of that already, sporting bodies will demand not only a percentage of the margin but all of it. It was our TAB if we do not address these issues now, it won’t be ours in the future. Mind you with modern technology we may not need them. Finally, and I know this is longer than I am normally allowed, but I asked John Allen to confirm or not if
he considered the Deloittes report CREDIBLE, no he said didn’t. You can see the extent of the problem, we are poles apart. PROVE ME WRONG Cheers G.