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Phumelela & Racing – A Happy Divorce?

Let's take our sport back!

Phumelela’s unhappy, and at times tumultuous, marriage to the sport of horseracing could seemingly well end up in the corporate divorce court after all. And there won’t be many tears shed by the family.

Phumelela

A cautionary announcement published this week by the Board Of Directors  of Phumelela Gaming & Leisure alludes to moves to offload horseracing – that being the consensus of opinion of a variety of people canvassed by the Sporting Post to unravel the corporate  semantics.

Read the notice here     

Phumelela currently runs horseracing in South Africa – merrily into the ground, some will say – in Gauteng, the Eastern Cape, Northern Cape and Western Cape.

Three of those four centres run at a painful loss. We can blame that on a host of semi legitimate excuses: the dire economic straits that the country is in, the growth of sports betting – but probably most of all on poor management and a lack of foresight and empathy with stakeholders, coupled with a gross absence of comprehension of the traditions and ethos of the sport of kings.

In 1997 the Gauteng Government signed a memorandum of understanding with the racing industry, stipulating that racing and betting in the province would in future be managed by one corporation, Phumelela Gaming and Leisure Ltd.

Our much loved bastion of owner rights and world-class communication, the Racing Association (RA) was established soon after.

Far from being the voice of the owner, that organisation has developed over the years into a one-man show and a bedfellow of the operator. In this happy divorce, the RA could be subpoenaed as a third party – the philandering mistress.

At the establishment of corporatisation, Phumelela said the industry was in dire straits – a fact hotly disputed by industry insiders at the time. The company observed that most major centres were failing to make a profit and public interest was in decline.

But, despite their undertakings to add value, what has followed?

The rape of assets and sale of Gosforth Park in Germiston, Newmarket in Alberton and the Bloemfontein Race Course.

1995 Gr3 Gosforth Park Fillies & Mares Stakes

National Dance wins the 1995 Gr3 Gosforth Park Fillies & Mares Stakes

Stakes have not kept pace.

Meetings have been cut and sponsors have been treated with contempt.

The stakes agreement – signed between Phumelela and the RA – is a secret document kept under lock and key for viewing by the privileged few.  Stakes are the cornerstone of investment in bloodstock for owners.

If they don’t buy, breeders won’t breed. If there are no horses, punters won’t gamble. It’s a vicious economic circle that requires balancing and steering.

2016 Guineas crowd

While needs change and sponsor adspend focus can shift, consider that in the Cape, we have lost all of Varsfontein, Maine Chance Farms, Avontuur, Khaya Stables, Kuda, Choice Carriers and Grand Parade Investments as feature sponsors in recent times.

Has anybody bothered to ask them – or even management – why?

Under Phumelela’s management, the Cape Summer Season has shrunk, with the Cape Guineas and Cape Fillies Guineas now being run on the same day.

How does one attract sponsors when they don’t own the day and they get handled like unwelcome visitors to a circus?

Dancewiththedevil wins the Sansui Summer Cup

Up North, the Summer Cup has also lost its long time brand sponsor, Sansui.

In an industry where  communication and transparency are dirty words, nepotism prevails, unholy alliances rule the day and where little intellectual or monetary investment is made in infrastructure or future planning, the writing has long been on the wall.

We need to get the right people involved.

Let’s take back our passion. Take back the Tote. And putting the right people in the right jobs will be a flying start.

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9 comments on “Phumelela & Racing – A Happy Divorce?

  1. Philip Goldberg says:

    There is no such a thing as a Happy Divorce.
    If this means that Cape racing may function on its own,it might as well close its doors now.
    Perhaps we forgetting why Phumelela got involved with the Cape in the first place.
    Despite ego’s and jealousy and whatever goes on behind the scenes, Cape racing can not afford to lose any support, and survive stand alone.

  2. Tony Mincione says:

    This is just my opinion. I say this because I’m flying without facts, but I’m worried nonetheless.

    Mostly divorces are not happy. The causes are normally related to failures, and often more than one.

    An interesting talk on plane crashes explained that it is hardly ever a single thing that causes a crash. In fact, on average 7 things need to go wrong, none of which on their own would bring down a plane.

    I don’t know where we are in the 7, but I think we are watching a plane crash.

    It’s one thing to list grievances and woulda-coulda-shoulda’s, but it’s another thing to have no plan to rectify these issues. I have never thought that racing was dying, despite the never ending litany of complaints. But at some point, and maybe that’s now, we have to consider that all the little things can, and will, bring it down.

  3. Ian Jayes says:

    It would be a blessing if Phumelela were to offload horseracing, but they must give back all the current assets: totes, racecourses and training centres and compensate for selling Gosforth Park, Newmarket and Bloemfontein at their true value. Does anyone know how much longer the Vaal racecourse can keep going when they are strip mining all around it. The shortsightedness of selling the racecourses is unforgivable. How utterly stupid the members were to vote for corporatisation and it gives me no pleasure to say: I told you so.

  4. Pops says:

    Aurora Mine the sequel?

  5. Loraine Karam says:

    Tony you are so right my beautiful intelligent daughter Sylvie Carmen Karam always used to say woulda-coulda-shoulda, and now it is too late, we have tragically lost her. Let’s all stand together, and not let this happen to race horsing. Please people i know most of us has the guts to stand up for what is right, let us not be like a flock of sheep, and follow the herd. Loraine Karam

  6. James George says:

    The lights were blinking when the CEO of Racing Association got discount shares in Phumelela for his members. Phumelela needed the money to buy a 50% share in a mainly sport betting company
    The RA vision/mission –.. To liaise closely with the Racing Trust in respect of:
    a) Ensuring that the objectives of the Deed of Trust are met – primarily the training, education, development and transformation of the industry with a view to ensuring the long-term viability and success of the sport of horseracing.
    b) Ensuring the main business, and thus focus, of Phumelela remains horseracing.
    So if Phumelela does drop horse racing after selling off and pocketing assets,can the RA be blamed?

  7. Chris Swart says:

    The grey areas between the different arms merged and it transformed into an unholy alliance with no accountability.
    I’ve long called for certain aspects of this alliance to be forensically investigated by auditors and the announcement of the results in the near future will tell us all what the real story is.

    I think it’s a short and the drop in price allowing a single person with little credentials to deal in investments will cost owners and investors dearly.

  8. Roderick Mattheyse says:

    As Tony Mincione says … careful what you wish for

  9. Jess K says:

    As the heading says, “let’s take our sport back”, but for that to happen, Phumelela must give back our (racing”s) assets, and that includes the tote, racetracks, training centres, intellectual (screening) rights and make compensation for the sale of our racetracks. .
    Word going around is that Phumelela’s plan is to dispose of its racing business to the Racing Association (RA), (some would say “from the frying pan into the fire”).
    I am no expert, but i would suggest that those stakeholders who care and have an interest in horseracing, get together and formulate a strategy and make representations to the Gambling Board and Government to ensure that Phumelela is held accountable in terms of its license agreement and conditions of license and to institute a forensic audit to unravel issues like jurisdiction, stakes agreement, Racing Trust shares, screening rights etc. Once the amount Phumelela owes racing (before it offloads) is determined, a Racing body must be set up with proper people in place, which will administer, regulate and market racing in an inclusive, transparent fashion.

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