Prizemoney heading in the right direction

The Club Menangle Board has taken the first step in addressing the prizemoney reductions resulting from the COVID-19 pandemic.

From 21 July 2020, the principal club’s Tuesday prizemoney will increase to $8,000 per race.

The Club has been heavily impacted by the projected decline in TAB revenue. Whilst recent forecasts are more optimistic, the budgeted revenue for the principal club has gone from $14.1M for the 2020 financial year to only $11.5M for the 2021 financial year, a fall of $2.6M.

The Club will carefully monitor activity over the next two months however given the enormity of the funding shortfall will need to see improved results and not just rely upon more favourable conditions. The economic position is still very volatile, which has been exacerbated by the rapidly declining situation in Victoria. There is a significant risk of a negative impact on NSW as evidenced by the outbreaks in south west Sydney reported over the weekend. The Club must therefore proceed with caution.

The Club is in the difficult position of setting prizemoney levels based upon a funding projection issued by HRNSW at the beginning of each year. The actual funding received each year is based on the performance of the wagering operators. This is normally within 1-2% of the projection however the COVID-19 crisis has dramatically impacted actual results for FY2020 and projected results for FY2021. For example, as recently reported in the Financial Review, the TAB have projected a 16% decline in earnings for FY2020, which will flow through to the racing industry.

The reality is the Club’s revenue for FY2020 will be impacted by as much as $6M. This includes the impact on wagering revenue and the investment portfolio. The Club’s business plan is to use investment earnings to supplement prizemoney. The downturn in financial markets will result in no contribution from the investment fund for the current year. The Club’s investment policy is underpinned by the economic principle of protecting the investment capital to ensure the long term viability of the Club however in times like this the Club is fortunate to be able to draw upon these funds to protect the short term viability of the business.

The Club will continue to monitor the performance of our wagering partners and the investment portfolio and as revenue improves the priority will remain the restoration of bread and butter prizemoney on both midweek and metropolitan programs.

For further information relating to this media release please contact Club Menangle Chief Executive, Bruce Christison, on (02) 46 45 2200.

Club Menangle