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Trainers Association demand clarity over New Zealand racing's financial crisis
24th April, 21:07Thoroughbred racing has the green light to return to the starting gates but will do so running into the face of a desperate financial crisis.
And that uncertainty could mean many thoroughbred owners and trainers will hold off bringing their horses back into work, likely leading to a watered-down product and creating more unrest within the struggling industry.
Prominent trainer and national president of the New Zealand Trainers Association Tony Pike wrote to RITA (Racing Industry Transition Agency) this week demanding answers because of the "uncertainty and lack of information" coming from the organisation that is a reconstitution of the New Zealand Racing Board.
The letter also warned many within the industry, including trainers and jockeys, would be looking at relocating overseas, premature retirement or considering alternative careers due to uncertainty around the survival of New Zealand racing.
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Top of the list was whether RITA remains a solvent organisation that could continue to fund its operating expenses and guarantee distributions to the three racing codes that fund stakes.
The letter said "questions need to be answered" to be fair and accountable to owners who race horses at considerable expense.
Owners and trainers got a win on Friday when it was announced that from Tuesday, thoroughbred trainers will be able to bring horses back into work with a proposed date to return to racing - under a range of Covid-19 protocols - on July 3.
But not everyone will be willing to do so without more clarity on what stakes will look like in the new season.
Pike has told Stuff RITA returned with an unsatisfactory response to the letter that said it was unable to give any significant detail until it had taken the concerns to its board meeting on April 29.
Stuff revealed on March 19 that RITA had gone to the Government, cap in hand, seeking a cash injection to prop up its business due to a dramatic downturn in sports betting amid the global pandemic.
RITA executive chair Dean McKenzie was not available to be interviewed but via a statement did not confirm if it had been able to secure a much-needed cash injection other than the wage subsidy initiative but confirmed it is still in discussions with ministers and Government officials.
"At this stage, we aren't able to provide information on any Government support that may be made available to the industry," he said.
RITA was established last year through the Racing Reform Act to enable the urgent changes required to drive the racing industry toward a financially sustainable future. It also manages the running of the TAB.
Even before the Covid-19 crisis those distributions were destined to fall, Pike said, but they will now take a further hit.
In his statement to Stuff, McKenzie said RITA was unable to finalise the code distributions for the new racing season, starting on August 1, until a full calendar is confirmed by May 4. But McKenzie said RITA was working with the codes to determine a likely estimate. Any such guidance has not reached the trainers association.
"They should be able to give us some guidance, like any good organisation, should be able to do, that our distributions are going to fall within a certain range," Pike said.
Many stakeholders, who provide RITA with its product, are frustrated they have not yet been provided with some level of certainty, Pike said.
An accountant by trade, Pike said it was important to point out the uncertainty wasn't just related to Covid-19 with RITA's budgeted distributions "heading very much south quite quickly" before the crisis hit.
"Covid-19 has probably just sped up the process of where we were going to be 12 months or two years down the track.
"Like any industry out there we need to look at how we can best operate our business to survive."
Pike said racing in New Zealand was not a dying industry but it has definitely been in a state of decline for a long time.
He believes it will survive but without some desperately needed positive and strong leadership and management to get back on its feet could become a "cottage industry" with its best people and horse stock-based overseas.
He was quick to point out the current RITA board, who inherited "a hospital pass" after almost a decade of mismanagement, weren't to blame for the current sad state of affairs but did question its lack of transparency and speed of putting new measures into place.
Pike said John Messara's report - an independent review of the New Zealand Racing Industry commissioned by the New Zealand Government - gave confidence the industry could flourish but unfortunately the decisions haven't been made quick enough by the current RITA board.
According to Pike, the RITA board has veered off the path of Messara's blueprint and needed to take control of its hugely inflated costs.
Pike said there was often a public misconception that racing was just a gambling industry but the $1.6 billion industry is a major employer full of horse-loving people and is a huge export earner for the country.
"There's huge opportunities out there for us but unfortunately nothing has really changed in the last 10 years."
Pike will join a phone hook up with racing club chief executives post the April 29 RITA board meeting to "hopefully glean some answers to what the state of our industry is going forward" but said many within it are frustrated by a lack of communication from RITA and its inflated costs.
"If they are in financial difficulties what sort of procedures and processes are taking place to reduce costs within the business?"
Stuff's questions of possible pay cuts for RITA executives and staff went unanswered but McKenzie's statement said: "The board and management are actively working on all levers to reduce costs and drive efficiencies wherever possible."
"While significant steps continue to be taken to reduce expenditure, we know the TAB will continue to be challenged by a significant reduction in available content for some time and the board are determined to maintain significant focus to ensure the sustainability of the business.
"At this time, RITA is unable to confirm the full financial impact of COVID-19 on its business - either looking back over the past few months or projecting ahead as the racing and sporting world gets back on its feet. Equally, while the organisation has undertaken various cost reduction initiatives, we don't yet know the accumulated value of these efforts."