Friday, 18 June 2010: New Zealand Thoroughbred Racing today unveiled significant changes to the way it will fund thoroughbred racing next season from August 1.
The new funding model simplifies the previous separate funding streams, reducing these from 14 to 6.
This represents a fundamental shift away from funding clubs using off-course wagering turnover and a range of other payments, to one that simply provides racing clubs with all prizemoney 'minimums' for each race category at each race meeting.
As part of this simplification, the traditional mechanism of NZTR charging clubs an annual levy for the cost of providing raceday officials, including integrity and health and safety, will be discarded.
These costs will now be directly funded from the total distributed amount, of approximately $63m for next season, paid by the New Zealand Racing Board (NZRB) to thoroughbred racing.
This new model will see 18% of actual on-course wagering turnover paid to racing clubs, an increase of 2% on this season, and a new race meeting fee paid to racing clubs based on the meeting type [Premier, Feature or Industry day], in recognition of the direct costs clubs incur in staging racing.
NZTR will continue its policy of paying Jockeys' riding fees on behalf of Owners for Rating 80 races and lower, representing savings to Owners of approximately $3m per year.
Nominations and acceptance fees will be paid for all races below Rating 80. While this is a reduction of the current 'free racing' cover it still ensures Owners of more than 80% of horses have the opportunity to run their horses for free.
At the core of the proposed new funding model is a new approach whereby NZTR sets and directly funds all prizemoney minimums for each race category at each race meeting.
This will make it easier for racing clubs to plan their race programmes, ensure they are fully funded irrespective of the day on which they race, and provide a consistent prizemoney structure for each individual race class and meeting category for Owners, Trainers and Jockeys.
The model is based on receipt of $110m net industry funding from the NZRB for the Thoroughbred, Harness and Greyhound codes.
This amount represents an increase in funding to the Thoroughbred code of approximately $5m.
However, as a result of a decrease in this season's funding from the NZRB, NZTR has been utilising its reserves to maintain its funding commitments. These reserves are now exhausted resulting in funding to clubs not increasing for the 2010/2011 season.
Guy Sargent, Chairman of the NZTR Board, stated: “This new model provides a real opportunity for our industry.
"By directly funding 100% of prizemoney minimums, we are encouraging racing clubs to focus on their critical role of maximising 'on course' entertainment, leaving NZTR to manage issues surrounding prizemoney.
“At the same time it provides aspirational targets for Owners, Trainers and Jockeys on our Feature and Premier days, with our top [black type] races being maintained at 2009/2010 levels.
“NZTR has also introduced a two-pronged solution to the additional financial pressure being felt by racing clubs.
"In developing this model, we are very, very conscious of a decline in race sponsorship, on-course and hospitality revenue and gaming grants for clubs. This was affecting Industry days in particular, making them difficult to operate on a break-even basis.
"To help counter this, we will increase funding for industry days [predominantly weekday meetings] and, in consultation with clubs, reduce some stake minimums at lower levels to fund, in part, increases at the top.
"The consistent pattern of industry days during the week is a vital plank for the international TAB agreement, the progression of horses through the grades and, ultimately, our market share.”
