Month: June 2021

by Brian de Lore
Published 25th June 2021

Melbourne trainer Mick Price poignantly reflected the needs of the racing industry earlier this week when quoted in ANZ Bloodstock News as saying, “…ideally more could be done to help owners recoup their costs at the beginning of a horses career, which is imperative to keep owners in the sport.”

His comment came after Racing Victoria announced a $16 million injection of prize money for 2021-22 that failed to increase midweek racing in Melbourne where city-trained horses are likely to commence their racing careers and either graduate to Metropolitan Saturday racing or descend to country racing.

Even though a midweek maiden at Sandown is unchanged from the current season for 2021-22, the prize money is a $50,000 minimum. Racing Victoria has elected to leave metropolitan midweek as is, but increased metropolitan Saturdays from $125,000 to $130,000 and country TAB meetings from $23,000 to $25,000.

For New Zealanders, the $50,000 Sandown midweek is a comparative luxury when we line up for only 20 percent of that figure (exchange rate not considered). The cost of training a horse in Melbourne is around $68,000/year, which former New Zealand trainer Mike Moroney says covers everything, whereas a full year’s fees in a Matamata stable gives you no change from $40,000.

If you accepted that Matamata is a Sandown equivalent, racing for 20 percent of the stake when you’re paying 60 percent of the costs is a thrice worse situation here compared to Melbourne, and yet Mick Price is saying it’s not an equitable situation for them and the majority of owners are neglected.

Price strongly argues that most owners fall into the maiden and benchmark 70 (R65 equivalent in NZ) category, and after talking to the participants, he thinks it’s best to increase prizemoney in that majority group than see fewer horses in training from the depletion of owners. How can you argue against that view?

The luxury of Victorian racing is the number of options available below midweek metropolitan racing. Country racing this coming season will offer a minimum of $25,000, and below that, a non-TAB meeting minimum is $15,000. The lowest rung for the slow ones, picnic racing, provides no less than $5,000 a race.

Comparing New Zealand to Victoria, the biggest disparagement is in the maiden/R65 group. We know most owners will lose because the majority of horses going to the races are hay burners that will never pay their way, but to disincentivise the losing owner from coming back into the next horse by failing to increase the minimum is to shrink the ownership pool.

Last week, this column supplied evidence of the diminishing broodmares bred and lowering of the foal crop. The breeders are also racehorse owners by necessity, just as we have seen growing ownership from within the ranks of trainers – it all points to a shrinking industry dying because prize money has failed to keep pace with rising costs for the casual owner.

On June 1st, NZTR CEO Bernard Saundry said on ‘Weigh In,’ “the board would like to see support in the midrange and at the same time how do we build up the top end – three years ago, the money went into the bottom end.”

Last week in a chat with Bernard Saundry, he said, “Nothing’s been decided by the board yet, but they are meeting on Wednesday (June 16th). There have been numerous discussions for the top, middle and bottom.”

As we’re now into the last week of June and little more than a month from the new season, it’s about time NZTR let the industry know where it stands. They are apparently waiting to see how much is available for stakes in addition to last season’s meagre $53 million. Whatever they decide, it’s known they will reserve the right to review it before Christmas in case the TAB performs poorly in the second half of the year.

The talk on racecourses is that the board favours injecting extra prize money into the middle and top, reflecting Bernard Saundry’s Weigh In comment. But to suggest the minimum won’t go up because the lower end had its turn three years ago is laughable when you consider the alarming rise in costs during the same period.

Owners costs continually rising

Most clubs have increased track fees; transport costs never stop rising; horse feed companies have regularly passed on increased costs; the jockeys riding fee has gone up, and every other rising expense always finds a space on the owners’ invoices at month’s end.

Increased prize money only for the middle and top races would benefit the bigger clubs and a much smaller pool of owners. It should be noted the NZTR board is top-heavy, with the majority Auckland-based, all appointed by a Members Council dominated by the major clubs.

Racing has to be administered fairly for all stakeholders and needs to be seen to be acting fairly. What’s fair is the question? Are all groups with a vested interest represented? Far too often, we hear narrow, provincial viewpoints and subjectivity dominating discussions on administrative matters.

The concept of the Auckland Racing Club joining forces with Counties (and possibly Avondale) and pooling their resources to build a StraithAyr track at Ellerslie to run 32 odd meetings a year offering $100,000/race minimums should be embraced by every racing person wishing for a sustainable future for New Zealand Racing.

Its eventuality will raise the bar for everyone in the game, entice investment from owners, and bring new players. It would also profile Ellerslie to a standard currently enjoyed by Randwick in Sydney and Flemington in Melbourne and provide a high level of racing on a consistent surface for marketing to betting markets outside New Zealand – deriving increased income for stakes.

In the meantime, let’s stem the bleeding and arrest the declining number of owners. NZTR injecting extra prizemoney only into the middle and top, benefits only a minority of owners.  

by Brian de Lore
Published 18^th June, 2021

A reduction in the foal crop was the expectation of most pundits for 2021, but to learn the number of mares served in 2020 had reduced by 653 or 14 percent is another dagger in the side of a perennially weakening thoroughbred industry.

The figures supplied by NZTBA last week are saying the foal crop this coming spring will numerically be the smallest for 51 years since 2,388 foals were registered from foalings in 1970. In the history of thoroughbred breeding since Volume One of the NZ Stud Book was published in 1899, no single year has ever recorded a greater fall.

Using the ratio of mares covered to foals born from the 2019/20 season, the industry this coming spring can expect around 2,480 foals – almost half the number produced a dozen years ago. It’s a deplorable situation caused by inept administrations that have failed to recognise the need to drive the industry through increasing prizemoney – proof that breeders and owners are abandoning the industry.

The breeding business is the foundation of the whole damn industry. It’s driven by the owners who attend or don’t attend the yearling sales. Owners are incentivised by prizemoney – that’s how it works successfully in Australia, and that’s how it fails miserably in New Zealand.

The average at the Book One Karaka Yearling Sale of 2021 was down 12 percent on the previous year, with 100 fewer yearlings catalogued. COVID kept the Australians away, but the weakness of the domestic buying bench is now blatantly reflected and confirmed in the coming foal crop – the only other barometer in addition to pathetic prizemoney to determine the current state of the industry’s ill-health.

Tragically, it’s man-made. Avoidance was not only possible but feasible had commonsense prevailed. We didn’t need to waste $200 million on the FOB platform included with its 10-year financial commitments to Openbet and Paddy Power. We didn’t need to spend up to $66 million annually on salaries at the TAB, which has now been reduced but not nearly enough. We didn’t need to employ non-racing high flyers who made the movie Dumb and Dumber look clever. We didn’t need to ignore the most vital ingredient in the Messara Review, which said outsource/partner the TAB.

…the winds of change are blowing a mere zephyr where nothing less than a hurricane will suffice.

But we did all those things, and now we are paying. We didn’t need to stand idly by and allow it all to happen either (I remove myself from that flaccid group). Worst of all, not very much has changed – a little tweaking here and there – the winds of change are blowing a mere zephyr where nothing less than a hurricane will suffice.

The impact of an under 2,500 foal crop won’t be felt Today, this season, or even next. It will be three years down the track when we try and do our usual thing – catalogue 1,200 to 1,300 yearlings, export 1,750 odd thoroughbreds overseas, and supply enough horses for a domestic racing season. All three of those categories will be weakened, particularly domestic racing, which is likely to see fewer race meetings hosting smaller field sizes.

In the five seasons between 2014/15 and 2018/19, New Zealand exported 8,768 thoroughbreds at an average of 1,753/season. In the late 1990s and early 2000s we were averaging around 2,000 exports with the best season in 1998/99 when 2,175 left these shores. The decline started in 2003, coinciding with the Racing Act of 2003, and NZRB commenced its reign of mismanagement.

The figures for horses exported may be distorted by broodmares and racehorses crossing the Tasman for brief periods before returning. Nevertheless, the downward trend has continued at a similar rate of decline in line with thoroughbred production.

Erosian of demand from overseas inevitable

An annual lowering of the foal crop, diluting the quality, and erosion of the demand from overseas buyers are inevitabilities. However, Australian yearling and broodmare sales are booming along with further increases in recent times in both NSW and Queensland while we fall further behind.

Only this week, the Queensland State Government announced a $41 million package for racing to upgrade infrastructure. NSW followed with their equivalent package with a $67 million upgrade at rural racetracks.

NSW Deputy Premier John Barilaro, standing alongside Peter V’landys at Scone races this week, was quoted in the Sydney Telegraph as saying: “Thoroughbred racing is the lifeblood of many country towns, accounting for around 14,000 jobs in the regions and contributes $1.9 billion to the state’s economy.”

If only we had a Government here in New Zealand that recognised racing’s contribution to the GDP, its importance to the economy by way of employment, and then conclude that, like all industries the Government has meddled-in in the past, their control is the path to penury.

We are not even asking for more cash. The Government needs to take a leaf from the pages of the Jockey Club in England in 1978 when this authoritarian body did a volte-face on their tight grip of racing and relinquished control for the betterment of the sport.

“The administrative structure of the sport must largely be in the hands of those who love, understand and work within it.” – Lord Howard de Walden in 1978

Following the 1978 Royal Commission into gambling when a message was whispered to the Jockey Club that its totalitarian attitude was no longer acceptable, Lord Howard de Walden afterwards stated publicly, “The administrative structure of the sport must largely be in the hands of those who love, understand and work within it.” He then called on the whole industry to unite behind this principle.

Out of that was born the British Racing Authority with the prospect of an independent chairman, an experienced CEO and secretariat, and 12 members of the board representing the whole industry. We have five boards with some reluctant to even talk to each other, a Members Council that has failed in its purpose, and numerous sector groups that collectively have the cohesion of the Elizabeth Taylor-Richard Burton marriage.

That brings forth the argument to dismantle the whole damn structure and start again with drastic change. Idealistic? Yes, but the current structure does not provide the game with a sustainable future. The present ‘tweak only’ post-Racing Act of 2020 form of running this business won’t prevent it from spiralling down the descending whirlpool and into the plughole.

Look back at the  Premier Yearling Sale at Karaka, and before that at Trentham – once the leading sale in Australasia. This year Book One at Karaka saw 414 yearlings sold for an average of $123,184 and an aggregate of $50,998,000. In Sydney at Easter, 365 yearlings sold for an average of A$368,945 and an aggregate of A$134,665,000.

NZ is fast becoming irrelevant to Australia

The upshot is the New Zealand industry is fast becoming irrelevant to Australia. Yes, some Aussies will always want our stayers, but the figures don’t lie, and the broodmare strength to breed superior horses was very much on show at the recent Gold Coast Broodmare Sale.

The right people for a drastic and decisive change in New Zealand have not surfaced. Instead, the industry is hamstrung by the DIA, which is ponderous and clueless. The TAB now can’t sneeze without DIA approval, and when Minister Grant Robertson appoints the new board, who would know what to expect?

Last week, I wrote to NZTR CEO Bernard Saundry with a list of 16 issues I considered problems for the industry, requesting responses, which to Bernard’s credit, were replied to in written form on Monday and then followed up with a phone call. All the questions and answers are too long-winded to repeat here, but the more poignant ones are mentioned below.

When I asked Bernard where he thought the industry was heading on current trends, he said, “Positive – but we can always do more. We are seeing good discussion on venue infrastructure that will deliver improved sustainable returns for the industry.

“Horse numbers are good. Synthetic tracks are a game-changer…” – Bernard Saundry

“Horse numbers are good. Synthetic tracks are a game-changer for the industry and once the new TAB NZ Board is appointed, we will be advocating for all revitalising options to be considered. As you are aware, investment by TAB NZ in the acquisition and retention of customers, especially through technology, is required to drive customer growth.”

Bernard is positive because increased betting in COVID-19 year and ‘racefields’ income will provide an extra $8 to $10 million in prizemoney for the coming season. Bernard didn’t give me that figure; it came from elsewhere, but NZTR is not yet saying where they will inject the increases. Some people in racing are saying raise the minimum while others want increases in the middle and top.

Raising the minimum is preferable because there’s an army of owners paying for maiden and R65 horses that need encouragement to stay in the game. They are starving, and morale is low, and the troops need feeding – Napoleon once said, “An army marches on its stomach.” But the truth is, the army is fast reducing to one platoon.

The cost of the option for raising the minimum from $10,000 to $12,500 is $2.776,000, or from $10,000 to $15,000 is $5,716,000 (see the graph). If they adopted the former for $12,500 minimum, opted not to increase the top two lines of Iconic and Premier minimums, every other category shown could go up for a total cost of $9,116,000.

Wherever NZTR places the money, it won’t be enough. Stakesmoney needs a  massive injection from returns that would derive from partnering/outsourcing the TAB plus banking all the savings in costs aligned with it.

Other questions put to Bernard included: Why were NZTR advertising for a Chief Operating Officer (new position) and expanding staff costs while the industry is contracting? If NZTR is relocating to the Waikato – why and at what cost? Why is NZTR asking that horses be named before trialling (trivial by comparison but important to owners and trainers)?

The explanations from Bernard Saundry can wait for another day; this rant is already too long.

But to conclude, it might be pertinent to quote former administrator David Lloyd who spent 50 years running race clubs as CEO at Te Aroha, Canterbury, Macau and Auckland. This week Dave said, “Today, you wouldn’t know that the racing industry exists.

 “How are the young people ever going to be made aware of racing. Public awareness of racing is diminishing daily.”