Caymanas Track Limited ... is it bankrupt?
Racing jurisdictions throughout the world recognise the value and importance of ensuring that quality racing stock is available to fill their programmes. Here in Jamaica, the annual yearling sale provides the feed stock for replenishment and providing additional racing stock.
The critical role that this sale plays in determining the fortunes of a promoting company has long been established. As far back as 1978, the promoting company recognised that some programme had to be put in place to ensure the constant restocking of horses for racing. In recognising the importance of this to their survival the promoting company (Racing Promotions Ltd) established a Revolving Loan Fund (RLF) to assist in the purchasing of horses for their promotion.
All stakeholders were asked to participate and the breeders association was given the responsibility to manage the scheme. Since then, the RLF has become an essential facilitator for purchasing horses to satisfy the demands of the promoting company. The fund has been efficiently managed over the years and has a record of repayment which would be enviable in any other lending institution.
Excellent working relationship
The Thoroughbred and Owners Association (TOBA) has always maintained an excellent working relationship with the various promoting companies over the years, as they look to us and our members to produce the horses which they need to be fulfil their mandate. Back in 2007 TOBA wished to establish some formal permanence to our arrangement for the establishment of the facilitator RLF and negotiated a five-year agreement for the input of $10 million into the fund. This was subsequently increased to $20 million in 2008 and I quote from the letter from CTL to TOBA: " ... the provision of these funds and how critical they are for increasing ownership and the number of horses in training something that CTL is very keen to achieve. I think there are other issues, including steps to be taken to improve and increase the number of horses being bred in Jamaica, that could usefully be discussed between us. I am sure that the CTL board, after examining the terms on which the previous loan was made and provided the conditions have been met, will have no problem in making available a further sum of $10 million. It is my objective, once we can meet and discuss the management of the fund, to ask for $20 million instead of the amount requested by you. I would like to develop a joint approach on loan funds and other incentives that are critical for the growth of the breeding industry and as a consequence, the number of horses in training for presentation to the Ministry of Finance."
This was a clear indication that there was a commitment which would be irrevocable, and on that basis TOBA made their plans and have held interviews to determine who were qualified for loans in the current sale scheduled for November 14. My understanding is that there will be no replenishment of the fund and the current board has refused to abide by the binding decisions of previous boards. There are, of course, legal issues involved and no doubt TOBA will pursue those.
The broader issue is the performance of this board whose mandate was to divest the company from government control. They have done nothing in this regard and their overall performance should indicate a need for urgent review by the Ministry of Finance. Sales have reached a new low never experienced in the history of any previous promoting company. This is due primarily to the increase in takeout to 32 per cent - unprecedented anywhere else in the world.
I have the deepest respect for accountants; their analysis of figures is an important management tool. The problem that I have is that their training provides the ability for analysis but neglects the most important: how do you arrive at that bottom line, what are the inputs that are critical to success?
The CTL board seems to be a one-man band where the chairman, having realised the futility of his mission, has handed over to the deputy chairman, who is guided by his accounting training. The time has come for this board to be replaced.
We need horsemen with vested interest in the success of the industry who are willing and able to guide and direct the racing industry. There must be some urgency to the immediate divestment of government influence. To have board members talking about IMF programmes as they relate to this industry is the height of nonsense and an indication of the level of ignorance of the business of racing. The stake holders need to look at the broader issues and resolve to work together to move this industry forward.
Howard Hamilton is the former chairman of Caymanas Track Limited and is currently the president of the Jamaica Thoroughbred Owners and Breeders Association. He may be contacted at email: firstname.lastname@example.org.