Prize-money protest

C

Cantoris

At the Start
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Jan 7, 2008
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HRI rules state that if there is a division that the two divisions are worth 70% of the original race. So a €10k original pot becomes two €7k pots. I think this is pretty reasonable unless the trainers are advocating we have no divisions at all. not sure where he gets his 47% front. 10% came off all prizemoney this year so the €10k is down to €9k which would mean the divided races are €6,300 or 37% less than previous year. It will be interesting to understand the Trainers Association stance on this.

Tom Hogan fined after prize-money protest

By Tony O'Hehir5.21PM 21 SEP 2009
TRAINER Tom Hogan was fined €200 for withdrawing Regal Obligation from the second division of the 2m maiden hurdle at Ballinrobe on Monday because he and the filly's owners, the Owenmore Syndicate, considered it not worth their while running the filly because of the reduced prize money for the race.
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Tom Hogan: 'excessive reduction'
PICTURE: Caroline Norris
Hogan said: " When we entered Regal Obligation for the race last week it was worth €5,182 to the winner and that was the situation up to the declaration stage on Sunday when we discovered that the value to the winner was reduced to €3, 600 because the race had been divided.
"After discussing the situation with the filly's owners we agreed that we could not afford to run the filly as the net return, if she won, would not cover two months training fees, if you take transport into account.
Hogan added: "In the light of all the meetings that were lost to the weather last month and for which prize money had been allocated, such a reduction in prize money for the race is not acceptable and the owners were not prepared to run the filly.
"We found the reduction excessive and, from our point of view, unworkable. Taking everything into account you are talking about a 47 per cent reduction on what the race was worth last year."
The fine imposed on Hogan was mandatory, but the trainer said: "I have the option of writing to the Turf Club to look for leniency considering the situation."
 
walsworth said:
It's just a token protest isn't it?
If they thought they could have won, they'd have raced.
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Yeah there is a lot of talk going on at the moment. Recently, the chases were abandoned at a track and the maidens divided. As there was a half decent handicap chase, the total prize fund for the day dropped circa €20k. This €20k will just get absorbed by HRI as any replacement fixtures will be for the minimum value. The trainers would like the €20k redistributed, as would the owners.

I do think prizemoney has more to fall and we might as well manage that process the best it can.
 
If the owners can afford to waft aside two months' fees (if their animal won), then they're in a very comfortable position indeed! The original prize money would've paid for just one more month - it's not as if we're talking about losing six months' value here. And if the prize money doesn't cover much in the way of fees - howzabout trainers dropping their costs to help out the owners?? Nah - no-one and nothing concerned with any aspect of racing has cut back anything to help to keep it alive: anyone had a reduction in box fees, in sales entry costs, prep/schooling costs, hay, feed, farrier, jockey? What do you think? The only feckin' thing that's gone down IS the prize money, thus meaning there are poorer returns for owners against a steady rise in overall costs. Both Irish and British breeders have literally been giving away foals and yearlings, where they can find takers, but not one of their suppliers has helped them out by reducing veterinary, feed or other peripheral costs. Come on, Mr Hogan - drop £350 off your monthly bill and help your owners out!
 
I think Irish fees will depend on how much pressure the trainer is under due to expansion or lack of owners/bad debts. Decent staff are still hard to come by and as they are not on much, it's hard to see them being paid much less. Insurance has not dropped. And vets bills have actually gone up. If trainers want to continue to feed and care for their horses the right way, I don't think fees will adjust for a while. Add to that, their margin is being squeezed due to increased taxes.

Those that are offering decent deals are those that I understand have savage bad debt problems coupled with a dwindling stable. Others overexpanded and have borrowed to build stable and put in gallops. They have a large interest bill hanging over their heads.

What will happen is that a portion of trainers will go bust and those that survive will be able to set their price according to the market.
 
I'm amazed that we haven't been reading about any number of both Irish and British trainers going bust, Cantoris, given their status. Some have a very small owner base and lease their properties, which can't be cheap, and don't seem to have any side businesses, like horse spas/recovery centres, livery, saddlery shops, etc. Even where some have X number of horses, they're often owned by one dominant owner so that if he or she pulls out or scales down, things look grim. Yet, there have been very few so far announcing that they're giving it up because they can't pay their bills.
 
Cantoris said:
I think Irish fees will depend on how much pressure the trainer is under due to expansion or lack of owners/bad debts. Decent staff are still hard to come by and as they are not on much, it's hard to see them being paid much less. Insurance has not dropped. And vets bills have actually gone up. If trainers want to continue to feed and care for their horses the right way, I don't think fees will adjust for a while. Add to that, their margin is being squeezed due to increased taxes.

Those that are offering decent deals are those that I understand have savage bad debt problems coupled with a dwindling stable. Others overexpanded and have borrowed to build stable and put in gallops. They have a large interest bill hanging over their heads.

What will happen is that a portion of trainers will go bust and those that survive will be able to set their price according to the market.
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Cantoris, the price of everything has dropped. Everything is negotiable now and if Vet Bills have gone up It's time to get a new Vet. The quality of care a Trainer gives should not have to suffer as a result re-negotiating prices. There isn't a business in the Country that's not re-negotiating.

Those that are offering decent deals are being pro-active. Those that are not, have owners that are not that affected by the downturn or are burrying their heads in the sand. You are correct in saying that a portion of trainers will go bust. Those that re-visit their cost base may survive and will be in a position to take advantage when the upturn comes.
 
Actually Cantoris makes a very good point. The costs involved with keeping horses are going up - you can't give staff pay cuts, you really have to give them rises every now and then to keep in line with inflation, for starters. Vets never, ever get cheaper, only more expensive. Drugs get more expensive. Feed, hay and bedding prices do nothing but go up all the time. Farriers don't come cheap either, nor are they putting prices down. Rents aren't going down either!

Most trainers won't be in a position to lower fees, unless they are lucky and have virtually no overheads or they are drawing on a completely different income at the same time. It's certainly not getting cheaper to keep horses, in fact it gets more expensive all the time.
 
Practically everyone in Ireland has taken a pay cut. Inflation is dropping.More people are looking for work now than for the last 17 years.Trainers,Vets, Farriers etc need to get with the program or go out of business.(and largely they are)

I appreciate it is hard to grasp the severity of the economic situation over here from there but sufficeth to say anyone who refuses to negotiate now will be shown the door.
 
Sheikh said:
Inflation is dropping
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Inflation is an indicator of what a basket of goods are doing. The basket is quite large. So if your only cost at the moment is diesel (maybe you're a taxi driver), then the general inflation rate has very little to do with the cost of operating your taxi which is the cost of diesel, which makes up a small portion of that basket.
 
Cantoris said:
Inflation is an indicator of what a basket of goods are doing. The basket is quite large. So if your only cost at the moment is diesel (maybe you're a taxi driver), then the general inflation rate has very little to do with the cost of operating your taxi which is the cost of diesel, which makes up a small portion of that basket.
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Hmmm.... thanks for that :blink:
 
Been told Heather Dalton is packing up as she can't make it pay. Peter Beaumont has also put his yard up for sale.
 
It seem's to me that you can't have your cake and eat it' Why are so many horses entered in Irish Races and yet at the same time over here only 4 horses contested the Race at Ascot
You have to be in to win it,
In the real world times are hard,
Things will get a lot worse before they get better IMO.
 
Andy, We're discussing the day to day expenses trainers face and the difficulty they face in trying to make a living training whilst still providing a high quality service. I think your talking about racing opportunities.
 
Sheikh said:
Hmmm.... thanks for that :blink:
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You used "inflation dropping" as a reason why training fees should drop. It is the basket of goods and services which a trainer buys that will determine if their costs are inflating or deflating....not the general inflation rate.

In fact, the reasons a trainer will drop their fees are due to competition or to drive volume to cover debt servicing costs or bad debts. No trainer will drop their fees if they can maintain their numbers without dropping the fees. This is the fundamental difference in Ireland. Those trainers like Griffin and Sheehy are nursing bad debts and drops in volume while young McAuley is doing his free/reduced training to stimulate volume. Enough trianers will go out of business to allow those that survive to maintain their rates unless they lose volume. Then it comes down to whether you want to move to another trainer and whether the reduced fees mean a reduced quality and standard for your horse. It's all interlinked.
 
Cantoris said:
You used "inflation dropping" as a reason why training fees should drop. It is the basket of goods and services which a trainer buys that will determine if their costs are inflating or deflating....not the general inflation rate.

In fact, the reasons a trainer will drop their fees are due to competition or to drive volume to cover debt servicing costs or bad debts. No trainer will drop their fees if they can maintain their numbers without dropping the fees. This is the fundamental difference in Ireland. Those trainers like Griffin and Sheehy are nursing bad debts and drops in volume while young McAuley is doing his free/reduced training to stimulate volume. Enough trianers will go out of business to allow those that survive to maintain their rates unless they lose volume. Then it comes down to whether you want to move to another trainer and whether the reduced fees mean a reduced quality and standard for your horse. It's all interlinked.
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For all the talk of trainers going out of business, it has been minimal so far in Ireland.
 
Galileo said:
For all the talk of trainers going out of business, it has been minimal so far in Ireland.
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It will happen though. A good few trainers in Ireland are running the horses for prizemoney i.e. the registered owner is not paying their bills and the winnings go straight to the trainer. this can only go on for so long though. The crunch will come now when the young horses are not given to the pre-trainers and then not onto the main trainers. Most trainers would tell you they have the same number of older horses but no young horses coming through.

I beleive McAuley has caused quite a stir among his fellow trainers.
 
Sheikh said:
Practically everyone in Ireland has taken a pay cut. Inflation is dropping.More people are looking for work now than for the last 17 years.Trainers,Vets, Farriers etc need to get with the program or go out of business.(and largely they are)

I appreciate it is hard to grasp the severity of the economic situation over here from there but sufficeth to say anyone who refuses to negotiate now will be shown the door.
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Life isn't all rosy and wealthy 'over here' either, Sheikh!

I do broadly agree with Cantoris though in that it is generally difficult for trainers to cut their prices. The prices of everything equine (for want of a better phrase) are doing not a lot but rise 'over here', although obviously I couldn't comment on the situation in Ireland. There are indeed trainers going out of business being unable to make it pay, several have cited that reason in the press for giving up this year.

Unless a trainer is already operating on a decent profit margin or has an alternative income, in most cases it simply isn't feasible to cut fees without going under. Horses still need use of the gallops, feed, bedding, hay, wormer, jabs, shoes, rugs, staff to muck them out, staff to ride them, the vet on occasion, transport to the races, a stable to live in, electricity and water supplied to said stable, and so on and so forth and I've seen none of that come down in price lately.
 
Cantoris said:
In fact, the reasons a trainer will drop their fees are due to competition or to drive volume to cover debt servicing costs or bad debts. No trainer will drop their fees if they can maintain their numbers without dropping the fees. This is the fundamental difference in Ireland. Those trainers like Griffin and Sheehy are nursing bad debts and drops in volume while young McAuley is doing his free/reduced training to stimulate volume. Enough trianers will go out of business to allow those that survive to maintain their rates unless they lose volume. Then it comes down to whether you want to move to another trainer and whether the reduced fees mean a reduced quality and standard for your horse. It's all interlinked.
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Basically what you're telling me is that all services and products related to the training of horses are at a price level that will not come down.

That does not stand to reason with people going out of business.
 
Sheikh said:
That does not stand to reason with people going out of business.
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People are going out of business for two reasons - losing numbers (look at how many horses Noel Meade has lost - now project to a smaller trainer dependent on Celtic Tiger construction owners) or bad debts. If you can maintain the first one and haven't been exposed to the second, you are in a strong position. Trainers like Gordon Elliott are doing very well numbers wise, as is Colm. Others have lots of empty boxes and the variable cost of filling that box is say €10 a day (assume no more staff required) so you can charge €12 and put €2 to your fixed cost base. That's why trainers are reducing their prices radically. They have to service their fixed cost base - where it's interest payments or bad debts.

I think for those trainers that survive this, they should do very well as it will be much more difficult in the future for young lads to get on the ladder. It all went a bit mad in the training ranks with new lads popping up everywhere. What you don't see is the number of pre-trainers that have just packed up and are now joining trainers again. THe trainers are now pre-training themselves. I know this from the pre-trainers in Wexford and who works in Colm's yard.

PS Do I think there will be an adjustment for trianers that have held out on price. Possibly, the market will determine that in the long run but it will come directly from that trainer's profit margin as opposed to passing on economies from reduced input costs.
 
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People are going out of business for two reasons - losing numbers (look at how many horses Noel Meade has lost - now project to a smaller trainer dependent on Celtic Tiger construction owners) or bad debts.
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Yes , because they are losing no.s because training fees like everything else need to be adjusted in order to make owning a racehorse or being involved in a syndicate or racing club affordable.

If Noel meade or anyone else went to his service and product providers and advised them that they needed to drop their prices so that the savings could be passed onto his customer or risk losing his custom I think I know what they would choose.

Keeping race horses in training has become too expensive. Fees rocketted. Prize money has dropped and fees should too.
 
Sheikh said:
Yes , because they are losing no.s because training fees like everything else need to be adjusted in order to make owning a racehorse or being involved in a syndicate or racing club affordable.
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No, they are losing horses because they are being taken out of racing completely. They are not going to a cheaper training. They are going to the green pastures of horse heaven. Reality.

It's not a case of syndicates just wanting a better deal, they cannot afford to have a horse in training at any cost whether 10%, 20%, 30% etc lower. I've just completed a cash call for one of our ordinary horses and it was a struggle as they are weighing up should they put money into a horse or their holiday or food for the family. That's how things are in Ireland. It has nothing to do with the cost of training fees. Thankfully 11 out of 12 are still in.
 
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