by Brian de Lore
Published 21 February 2019
In a call to leading trainer Murray Baker this week, the wily veteran summed it up in one sentence when he said, “Only a substantial increase in stakes will save racing.”
“Take the Avondale Cup which on Saturday was worth $100,000,” he continued. “About thirty years ago it was worth $300,000; that’s how far we have gone backwards.”
Checking the records to substantiate Hall of Famer Baker’s memory isn’t as easy as it once was – the internet websites are very hit and miss to find such memorabilia, and without the once very reliable Turf Register which ceased to exist many years ago, it was only after several phone calls and a chat with Maurine’s trainer Jim Gibbs that the jigsaw puzzle came together.
Maurine won her Avondale Cup in 1988 from Plume d’Or Veille and Field Dancer and collected $187,500 as first prize from the all-up stake of $300,000. She also won the following year, as well, ending her career as a nine-year-old with the second Avondale Cup victory retiring her with stake earnings of $521,760.00.
The CPI calculator converts those earnings to a buying power today of $1,056,580. But Jim Gibbs who is also a Hall of Fame inductee didn’t just have Maurine; in a short span of years in the late eighties and early nineties Gibbs he had a remarkable run of success with a high-quality team of horses whose earnings when converted to today’s buying power makes remarkable reading:
Tidal Light ($1,149,584), Sounds Like Fun ($928,368), Spyglass ($1.068,064), Field Dancer ($816,776), Regal City ($1,479,671) and Mickey’s Town ($1,332,030) – five million earners calculated on the CPI using the year each retired plus two just under a million, all in the one stable – and practically all at the same time.
“I fear for the industry today based on the stakes they race for today,” lamented the retired Gibbs who has continued his involvement as an owner in both codes but admits that ownership is a struggle even when you are getting a good strike rate of success.
This year’s Avondale Cup winner Glory Days, like Maurine, notched up her ninth win, but unlike Maurine, the six-year-old’s earnings have reached a career tally of just $235,095. So, when Murray Baker talks about the industry going backwards, he has been around long enough to have seen reverse gear being used for a considerable length of time.
When the Jim Gibbs era was in full swing, the racing industry’s administrative costs were only a fraction of the percentage of the entire turnover compared to today. Then, the Racing Act of 2003 hadn’t been concocted and the gravy-train they now call the NZRB which now soaks up a major portion of the cash-flow was only a distant nightmare.
And just as Kiwi owners compete today for such poor prizemoney propped up by borrowings of $12 million for this season and the previous, to keep the minimum stake of $10,000, Aushorse is proudly advertising Australian prizemoney has increased 92 percent over the past 10 years – the gap continues to widen.
Last week this column set the record straight on the shortcomings of both some of the NZRB leadership team and the FOB platform and predictably, it wasn’t well received at headquarters. And if you throw stones, you can expect some to be thrown back, and back they came.
But CEO John Allen’s claim in a letter to staff discounting my story by saying,” The article contains plenty of inaccuracies, fiction and critical comments about some of our people – quite frankly, much of what is written is absolute rubbish,” – didn’t appear to be well-received when it got into the hands of social media.
No fiction was written, everything is well-researched, but yes, a lot of criticism was levelled at Allen, his leadership team, the FOB platform and the direction in which this industry is heading with apparent disregard to the employment longevity of thousands of starving participants.
If you take a helicopter view of racing and examine the downhill road on which this industry has been travelling unabated over the past 15 years, it will be noted that the $106 million worth of assets the industry possessed at the beginning of that era have all gone. The Deloitte Report came and went and was followed by the Messara Report, but as of February 2019, not one thing has changed.
The NZRB Annual Report released in December for 2017-18 clearly shows the organisation continues to expand and become more expensive. Costs went up $9 million to over $213 million, the number of employees on salaries of $100,000 or more increased from 128 in 2016-17 to 143 and the leadership team of eight including Allen, Saville, and Taylor were awarded pay rises that took their average salaries up to $355,625.
This isn’t fiction; it’s factual and is available for anyone to research by reading the Annual Report. Allen is indignant about the questioning of his team’s suitability to do the job, but also a fact is that some of a core group have been previously employed at places like NZ Post and the Ministry of Foreign Affairs and Trade (MFAT) where Allen worked.
Nepotism puts the wrong people into positions of power and only alienates the stakeholders. This all happened some time ago, but the chasm between the administration and the customers has widened since launching the FOB platform which has been poorly received in-dïfference to Allen’s claim in his letter that, “the new platform is working and delivering results.”
The TAB periodically releases its turnover figures and stats with a comparative column to the corresponding meeting last year, but this practice ceased with the latest document they put out which appears to be camouflaging the downturn. However, it wasn’t too difficult to find last season’s figures from a year-old email.
In the calendar year to February 13, total TAB betting on horses and greyhounds was down a staggering $17.1 million against the same 44-day period in 2018 – that’s just under 10 percent. Sports betting figures were not available, but with Allen admitting a couple of weeks back that the margin for the first month on fixed odds betting was only three percent due to various issues including a few bets placed after a result, turnover would be needed to have been staggeringly high for racing to gain any benefit.
The usual margin for sports FOB is about nine percent and when that happens racing’s share is a net two percent. Cutting the margin to a third of normal also means racing’s cut reduces by the same percentage. From tote betting, the margin is 15 percent.
The $17 million decline in 44 days is significant and to redress the issue it may require more than just punters’ familiarisation with the FOBs new website. With Allen claiming that the downturn would last four to six weeks and the Ministerial Advisory Committee (MAC) report to the Minister due for completion by the end of next week, and the season well into its second half, an immediate resurgence of turnover is critical.
With little time left to month’s end and the MAC report lodgement imminent it is appropriate to re-examine how this committee has been briefed. The most important sentence on page one of the Terms of Reference reads:
“The Committee will be charged foremost with setting a sense of direction for the intended racing reforms with a particular focus on prioritising those recommendations that have been identified as the main drivers required for successful industry reform. This will provide the basis for a prioritised work plan for the Committee, to be provided to the Minister of Racing early in 2019.”
The TOR document identifies six core points taken from the Messara Report upon which the Minister requires analysis by the Committee. At the very top of that bullet point list is, ‘the governance and structure of racing.’
That doesn’t just mean NZRB but covers the whole governance; the entire structure including governance of the codes. Would it be a surprise if MAC came back with a priority recommendation that each and every one of these organisations be the subject of a major overhaul? No, probably not.
It would also be no surprise if another recommendation was to immediately operationalise the Performance and Efficiency Report on the NZRB which under the current law specified in the Racing Act is required to be done during 2019 anyway. Such a move would lift the lid on the industry’s true financial status and provide MAC with the necessary information for the second phase of its duty scheduled for completion by June 30th.
Trainer Murray Baker summed it up very well at the start of this story with his view on prizemoney, and his way of thinking is compatible with John Messara’s letter to the Minister which is dated 31 July 2018 and is published at the front of the Messara Report on page seven.
Messara says: “The single most effective lever available to reinvigorate the New Zealand Thoroughbred Industry is prizemoney; it rewards and supports owners, trainers, jockeys, stablehands, and the entire supply chain including breeders, vets, farriers, feed merchants, etc.
