07 JUN 2011 - Statement by the Chairman
Tuesday, 7 June 2011 - Chairman’s Statement
Ladies and Gentleman
As we near the end of the financial year and the end of the season a number of important matters must be raised.
Before that however, let me thank everyone of you for the support you have shown to me, to the Management Sub Board, the staff at the Dragway, your sponsors and to each other. The season ended with a cracking event on the last weekend of May. I have no doubt you have read the report elsewhere on the website – and viewed the great photos from cackling pipes – well done to everyone.
But back to matters before the Management Sub Board: Challenges have been raised - some have been met – but we are a long way from settling all the issues at your track.
When the Management Sub Board was instituted in January the financial position of the track was very poor – many factors including poor weather had contributed. What was required was significant action – and this was taken. Many of you are aware that the costs are placing a huge imposition on the track’s finances. There are amounts owed to suppliers for work undertaken dating back to 2004 – some of these have only surfaced in recent days and weeks. You will appreciate and as we have advised previously any invoice presented for work apparently carried out prior to January 6th2011 will be challenged and closely scrutinised.
Many of you have also commented that spectators cannot be expected if there is no advertising. True. But I will add that advertising spending needs to be considered against the risk of an event not going ahead due to poor weather, or losing spectator numbers due to poor weather. Previous events have been lost with large expenditure on advertising leading to losses in the tracks financial position. It is imperative we consolidate the tracks position. The money needs to be there.
The track has a considerable amount that is owed to ANDRA which has been the subject of negotiation and a resolution towards the payment plan has been reached. I want to publicly acknowledge the support of ANDRA’s CEO Tony Thornton in assisting the track on this matter.
Additionally the track has received notification of the threat of legal action allegedly relating to employment issues. This has already generated some costs and considerable uncertainty about the extent of future costs likely to be incurred in defending the allegations. I must act to protect the tracks interests and finances.
Costs have been contained - I have already mentioned advertising. Additionally staff costs have been curtailed, and here I must mention the fantastic work of Tony, Ray, John, Mary, Christine and Mark under difficult circumstances. A full expenditure review is being undertaken. I am still awaiting the completed audit for the 2009–2010 Financial Year and obviously the final figures of 2010–2011. I have asked Tony and Sandra Garland to complete these as quickly as possible. At the same time Tony, Pieter and I are working on the 2011-2012 Budget and Cash flow projections for the next three years. It is unlikely the track will attract any significant Government funding at least for the next year or two. The work currently being undertaken at the track – the batter wall on the access road, the toilets, and the track grinding and resurfacing are part of the $1.2M Public Work Government grant resulting from the work of Tony Beuk and the Management Sub Board. The reliance on the Government grants over the past three years has been the subject of both audit and Government comment. Essentially we must stand on our own two feet.
And that brings me to prize money. This is a difficult and emotive issue. The sport of drag racing is undergoing significant change: the restructure of ANDRA will bring change to governance and organisation; the changes within Drag Ltd and the Pro Series will bring change in sponsorships, television rights, calendar of events and racing format; and there are changes at the track in Perth, Willowbank and in Sydney; and lastly but I suggest most significantly the change in attitude of spectators to a 2, 3 or 4 day event where racing goes for 10-12 hours per day. We must change. We must improve the show.
In terms of prize money this can only come from one of three sources: sponsorships, entry fees or spectators – and if any of these are impacted by the changes then the whole matter of prize money requires revision. And that is clearly the case.
Additionally, and in Sydney’s case, we not only have the legacy of financial difficulties, some of which emanate from 2004, we have the imminent threat of expensive legal action. Accordingly the Management Sub Board has determined that it will not support the payment of any prize money at this time. I have already written to those competitors from the Nitro’s where prize money is an issue and sought their views.
In my report to the AGM of members on July 29thI will cover this aspect in more detail and include recommendations about the future of prize money. Any payments of all or part of any prize money due will then clearly be a matter for the Board after that time. At this stage you will appreciate I cannot commit that Board to future payments.
I know this decision will not sit comfortably with some of you however as Chairman I have clear responsibility to protect the interest of the track first and foremost – I must (and I will) ensure the track remains a viable venue where you will be able to race.
I ask for your support and look forward to your comments.