Industry unrest increases

High-profile racing personalities Graeme Rogerson and David Ellis are calling on industry leaders to come under closer scrutiny as confidence in the sport nears rock bottom.

Several influential industry stakeholders have been involved in informal discussions as they seek to combat falling stakes and growing hardship at the grassroots.

Ellis said the New Zealand Racing Board needed to reveal its plans for growth to provide the industry with confidence for the future, while Rogerson claimed excessive administrative costs were crippling the industry and making it hard for some participants to survive in the sport.

Waikato Stud boss and former Racing Industry Board chairman Garry Chittick this month met with New Zealand Racing Board chairman Michael Stiassny and chief executive Andrew Brown after a concerned group of stakeholders, led by Rob McAnulty and Graeme Rogerson, stopped a trials meeting at Cambridge last month to discuss their concerns and strategies to spark change.

Others at the Racing Board meeting included New Zealand Thoroughbred Racing chairman Guy Sargent and dual board member Alistair Sutherland.

Chittick said he was frustrated with the board's lack of empathy for the plight facing thoroughbred racing and its unwillingness to break down annual costs, which have increased by $32 million in the past five years.

''The issue really is the industry is concerned about the current reduction in [Racing Board] payout when the board's expenses have grown from $112 million to $144 million in a four to five-year period,'' Chittick said.

''The average increase of costs to the Racing Board was 7.2 per cent per annum which is quite significant.

''In the halcyon days it probably wouldn't have mattered much but it's probably more than most businesses in the current economic climate would contemplate as reasonable.

''Their average wage and salary bill has gone up 9 per cent [a year] which was from $24 million to just on $38 million.

''These questions were asked in the context that people out there who couldn't put up their costs to that level were concerned about the effect these costs would have on them.''

Stiassny this week defended the rising costs as crucial to ensuring long-term gains.

''In light of the global financial crisis and the slowing of the economy, the wagering business has been pretty hard hit, and you only have to look at the SkyCity results [gaming revenue and operational profits down] to see that,'' he said.

''But we think the Racing Board is in pretty good heart. We've done quite a lot of work on costs in the last few years and we believe they are reasonable.

''Other than the year when the melt-down hit us pretty hard, we have always performed pretty close to budget. Costs are within a level the Racing Board has agreed on.

''There is a real debate as to whether we should be running this business for prosperity in future years or whether we should be cracking out what we can for the short-term.

''We have taken a long-term approach and that's what any responsible business does. Costs haven't been cut to the bone but they are at levels justifiable to protecting profit for future years.

''We are just about to announce our profits for the period in the next couple of weeks. The global financial crisis has hit wagering very, very hard but the board is comfortable with the performance. We're hoping for better because it's never good enough but in the current economic climate, it ain't all bad.''

However, Chittick said the issue of climbing Racing Board costs couldn't be ignored.

''I didn't think that was particularly reasonable. For instance [Australian wagering business] Tabcorp's costs have gone up 2.7 per cent and they are very concerned with that.

''If you look at the wage and salary structure in New Zealand [outside the industry], you'd know how much it's gone up in the last few years - very little.

''Their answer was they required the right people to grow the industry but we haven't seen any result as a result of those increased costs.

''The return to the industry really hasn't kept pace with the amount of money available to the industry since Winston Peters reduced the duty levies and there's only one thing you can put that down to and that is costs.

''Quite clearly the industry doesn't think that's acceptable. To ignore their blow-out in costs is very unreasonable.

''I don't think I've seen the industry more disillusioned than it is at present. In fairness, they [the Racing Board] didn't determine the $5000 maiden races. The thoroughbred code did that and it was probably a very silly decision politically.''

He said Ellis, Rogerson and Peter Vela were leading the push for change.

''There's a lot of people pretty agitated and this isn't dead and buried,'' Chittick said.

Rogerson said he didn't think any businessman could justify the board's increased wages and costs.

''We need an independent to look at it,'' he said.

''The way they are spending, there won't be any money left for prize money and it's unacceptable. It's got to the stage where people in racing are very disillusioned.

''I've spent 40 years plus in the industry and I've never seen the rumblings there are at the moment. People have lost confidence, not just in galloping, in trotting too.

''Winston Peters did great things for the industry but it's gone backwards in the last few years.''

Chittick said he believed the board's plans to increase the returns to the industry from $141 million a year currently to $180 million annually within eight years were pie-in-the-sky.

The board plans to increase the number of races it takes betting on a year from 35,000 to 65,000 in that period but Chittick said at the current yield of 8 per cent to the industry, the budgeted increase would rely on TAB turnover increasing to $2.3 billion annually from $1.5 billion last year.

''I've spoken to a lot of TAB operators and their view is you reach a saturation point of product,'' he said, adding that the additional international races had the potential to dilute interest in New Zealand racing.

Ellis called for Stiassny to front a public meeting of industry participants and share his visions for the future.

''He should call a public meeting and tell us what's going on. He's the leader of the three codes and he has to front,'' Ellis said.

''I believe there are 40,000 people who work in the three codes that deserve to be told by the chairman exactly what's happening, where he sees us in 12 months, 24 months and five years because I don't believe people who make their livelihood out of the industry can plan unless he does that.''

Ellis, Rogerson and Chittick expressed disappointment that Alan Jackson was not appointed to the board's executive despite the backing of the three codes.