Gold Circle has plan to turn racing’s fortunes around
Company offers to take over management of Tellytrack and Phumelela’s international racing division
Give praise where it is due. Gold Circle, which runs racing in KwaZulu-Natal, appears to have taken a leaf out of Mahatma Gandhi’s book. He said: “It’s easy to stand in the crowd, but it takes courage to stand alone.”
In turbulent times for horse racing, Gold Circle’s directors have not sat on their hands. They have put forward propositions to get the sport out of the mire.
1. They offered to take over the management of Tellytrack and Phumelela’s international racing division when the company went into business rescue.
Business Day asked for an update on this on Wednesday from Gold Circle CEO Michel Nairac. He said: “The decision to outsource management of Tellytrack and the international racing division rests with the business-rescue practitioner. He has requested more time to consider the offer.”
Tellytrack is racing’s shop window. Nairac said a few weeks ago that “without the feed of our picture and our international revenue, we won’t survive”.
2. Gold Circle wants to save costs and settle the war between Phumelela and bookmakers. Nairac said at the time: “Our aim is to sign up more bookmakers and subscribers to the Tellytrack feed and as advertisers on the channel.
“Considering our own relationship with bookmakers, Gold Circle is in a better position to negotiate this.”
The latest update from Nairac says: “The business-rescue process has effectively put a stop to the reconciliation process.”
3. With many racing sponsors in Europe deserting the ship or cutting their contributions, we asked Nairac about the current state of play with Gold Circle’s backers, notably Hollywoodbets.
“Hollywoodbets are great partners,” he said. “Their commitment to the sport of racing has not stopped growing even during these turbulent times.
“Vodacom has also been fantastic supporters and partners. They have extended their sponsorship to make up for 2020 when the Durban July will be run behind closed doors.”
Gold Circle will hold a special general meeting on June 20 and chair Neil Butcher has urged members to remove the restrictions in the memorandum of incorporation “and allow the board freedom to manage the business through these turbulent times and the uncharted waters that lie ahead for the ultimate benefit of the company and horse racing in KZN”.
The alternative was for Gold Circle to collapse and follow Phumelela’s course of action.
Butcher told members in his letter that the company is expected to post a loss of about R70m for the financial year ending July 31 after no revenue streams for two months and negative investment results.
This excludes possible impairment to the company’s investment in Track & Ball and the debt owed by Phumelela for Gold Circle’s share of international revenues.
Butcher said a loss of R35m was expected in financial 2021, but the board expected the company to return to profitability in financial 2022.
He said training centres remained fully operative during lockdown but all other cost centres, including salaries, were reduced dramatically to protect cash flows.