TURF Praha, a. s. Press release
23.6.2013

  

The Ordinary General Assembly of the shareholders of Turf Praha a.s. was held at Prague Velka Chuchle raccourse on June 20th. The Jockey Club of the Czech Republic has a 24,7% shareholding in this Association [Turf Praha]. The representative of the Jockey Club of the Czech Republic at the general meeting was Jiří Trávníček.

 

At its session, the General Assembly took into account the Report of the Board on the business activities of the Association, the state of its property, the final accounts and the proposal for distributing the surplus for year 2012. It then took into account the Report of the Supervisory Board of the Association on the results of its oversight, its checks on the final accounts for year 2012, its standpoint on the auditor’s report, and its proposal for distributing the surplus.

 

The General Assembly approved the results for the business activities of TURF Praha a.s. for year 2012 and the final accounts, and the proposal for distributing the surplus from the business activities of TURF Praha a.s. for year 2012, in the amount of CzK 67 852. This sum will be transferred to the reserve fund of the Association. In the course of further discussions, the auditor of the Association was also approved for year 2013, and the business plan of the Association was approved for year 2013. The representative of the Board informed the participants in the discussions about the consequences of the flooding and, in outline, about the ongoing remediation and reconstruction works in the racecourse area.

 

An important piece of information was the proposal put forward by the Board on systematically separating the business plan for using the real estate of the Association from the organisation of horseracing. The Board of the Association proposed offering to the Jockey Club of the Czech Republic, or to some other party interested in organising horseracing in the racecourse area, as from January 1st, 2014, one the two following options for possible collaboration. The first option is to provide the necessary technical service for organising horseracing by allowing the interested party to use all the business and marketing rights and duties connecting with financing horseracing. The second option is to sell TMM s.r.o. or to transfer its assets to the interested party, which would become the organiser of horseracing at Prague-Velka Chuchle, and the tenant in relation to Turf Praha a.s.

 

Taking into account the end of the disputes over restitution claims and the proposed consolidation of the ownership of the racecourse area, the Board of the Association went on to declare its intention to draw up a business plan leading to greater commercial use of the racecourse area.

 

Václav Luka (president of the Jockey Club and chairman of the Board of Turf Praha a.s.):

  “Our aim is to set up a system that is transparent both for sponsors of racing and for the Jockey Club of the Czech Republic, and also understandable for shareholdes of the Association. Due to the current representation of influential horse owners in the Council of the Jockey Club and their good reputation in business and in society, I believe that there is a special opportunity to raise the level of Czech horseracing.”

 

Attachment to the press release:

Turf Praha a.s. got involved in operations at Prague - Velka Chuchle at the beginning of year 2002.

Its motivation was a justified fear that, if the area were to be sold in the winding up of Dostihové závodiště Praha a.s., horseracing at Velka Chuchle could come to an end.

 

The situation when Turf Praha a.s. was set up in 2002

 

·         All the land in the [racecourse] area was a subject of restitution disputes

·         The grandstand and the stables were in a tumbledown state

·         The racecourse infrastructure was old-fashioned, there was no functioning irrigation, and the technical equipment was inadequate.

·         There was no realistic business model.

 

The aims of the shareholders in 2002

 

·         Maintain horseracing in the racecourse area

·         Stabilize the ownership of the area

 

Situation in 2012/2013

 

·         The technical infrastructure of the racecourse and the horseracing environment have been developed

·         All restitution disputes have been resolved

·         All major derelict and broken-down states have been dealt with

·         A business model has been introduced

·         Major racehorse owners have entered and are engaged in the Board of the Jockey Club 

 

The existing business model for organising horseracing does not provide sufficient funds for developing and maintaining the racecourse area.

 

The main business plan (in agreement with the main shareholder) is loss-making from the viewpoint of the Association.

 

In the space from Hamburg to Budapest, there is no existing functional model with independent financing of horseracing that can be used as a model.

 

The linkage between ownership of the racecourse and operation of the racecourse is a cause of  mistrust for part of the racing public and for possible sponsors.

 

The Board’s proposal

Separate the business plan for using the Association’s property from the organisation of horseracing. 

 

Offer to the Jockey Club of the Czech Republic, or to some other party interested in organizing horseracing in the racecourse area, as from January 1st, 2014, one of the two following options:

·         TMM, on the basis of a service agreement, will provide all necessary services for organising horseracing for the interested party

·         The interested party will  obtain use of the business rights and the economics of horseracing

 TMM s.r.o. will be sold to the interested party, or its assets will be transferred to the interested party.

The interested party will become the organiser of horseracing at Prague-Velka Chuchle, and the tenant in relation to Turf Praha a.s.

 

Elaborate an extended business plan taking into account the current consolidated ownership of the racecourse area

 

Riding school – leisure riding, sports horses, further develop the training centre, develop the accommodation and catering capacity, develop recreation and leisure activities

 

Current shareholders

Jan Vedral, Petr Trachta, Zdeněk Boháč, František Hrubý, Václav Luka, Jockey Club České republiky, Unico Pardubice a.s, Petr Drahoš, Viktor Komárek, Luboš Smrčka, Ivan Přikryl, John Mandák, Jiří Charvát, Ladislav Jezdinský, Biserka Vondrušková, Zbyněk Pulec, Jaroslava Matušková, Josef Hovorka, František Janů, Václav Kozel, Wrbna Racing a.s.

**

Comments: 

 

It is true that in 2001 the previous racecourse owner went bankrupt, and there was a threat that the whole area could be bought up by someone not interested in horseracing and used for non-racing purposes. The catastrophic floods in 2002 and the calamitous floods in 2013 have since reminded us that the racecourse is, in fact, periodically part of the adjacent river Vlava and also of the more distant river Berounka, and that its potential alternative uses are limited. In 2001, however, the threat of the course being lost to horseracing was real and serious.

 

At quite short notice, a number of individuals and companies linked with horseracing formed TURF Praha to purchase the racecourse. After the changes in 1989 and the restitution of property that had been confiscated or nationalized in the period of socialism. there was a very unclear and disputed ownership situation at Velka Chuchle racecourse (and in many other locations). We are told that all of the claims have now been resolved, and that TURF Praha’s ownership is now clear and undisputed.

 

An association called TMM, which is subsidiary of TURF Praha, has organised events at Velka Chuchle racecourse since 2002. TMM also manages entries, acceptances and a range of other services on behalf of the Jockey Club of the Czech Republic. In addition, the monopoly bookmaker BETINO is run by TMM, I think on behalf of the Jockey Club.

 

For preventing the purchase of the racecourse by non-racing people, for going through the painful and not cheap process of clarifying the ownership of the course, and for (to some extent) improving and developing the racecourse, TURF Praha deserves the gratitude of racing people in the Czech Republic.

 

However, there are some problems. As TURF Praha has recognised above, the present arrangements are unprofitable. Sponsorship is quite limited, we could add that betting income is limited, support from the city and from the government has been limited. TMM has not managed to create a wealthy Velka Chuchle racecourse, though it has survived two major floods, and has provided much more stable management of the racecourse than in the previous 13 years. Czech racing has suffered lean times, and in particular, trainers, stable staff  and riders make a very meagre living.

 

As is admitted above, the strong but unclear links between ownership of the racecourse and organisation of racing at Velka Chuchle have caused some loss of confidence.

 

As was not mentioned above, this was what led several top owners to get themselves elected to the Association of Breeders and Owners, and from there into the Jockey Club committee.

 

In addition, the problem is not just that TURF Praha and its subsidiary TMM are closely interlinked, with just a few names appearing in all leading positions. These same names are also found at the head of the Jockey Club of the Czech Republic and in TMM’s subsidiary, BETINO.

 

Czech racing is a small community and a small operation. It is difficult to avoid the formation of small groupings who take everything over. It would indeed be a good idea to separate ownership of Velka Chuchle racecourse from the organisation of racing at the course. And to separate both from the Jockey Club, and to separate all three from the monopoly bookmaker, BETINO. And to ensure that there are fewer potential conflicts of interest.

 

The active involvement this year of some leading racehorse owners in the Breeders and Owners Association, in the Jockey Club, and in finding sponsorship for big races – including next Sunday’s new Josef Vana Summer Cup race at Karlovy Vary – is surely to be welcomed, as is Václav Luka’s reaction to them. He seems to welcome this involvement of successful business people and respected personalities in the management of Czech horseracing.