Pardubice: Whats going on with the big race organizers?

Content is taken from Paddock Revue magazine, May 2006 edition

DOSTIHOVY SPOLEK AT THE CROSSROADS

When the editor of Paddock Revue invited me to write an analysis of what is going on in Dostihovy spolek in Pardubice, I hesitated. I have been striding through the world of horseracing with Dostihovy spolek almost since it was set up. I consider those involved to be, if not good friends, at least good acquaintances. That is why I hesitated with my response. But then I said to myself that only friends can look each other in the eye and tell the truth, strengthen their friendship by doing so, and continue to hold together. I am therefore presenting an X-ray photograph of the present and future of one of the two biggest organizers of horseracing in the Czech Republic.

We hear it said that Spolek has problems. But who in Czech horseracing would not be in financial difficulties when wanting to maintain good-quality operation throughout the season. There is no abundance of sponsors. The stands are not bursting under a surge of racegoers, and the betting turnover is negligible in comparison with Britain. The people in Pardubice admit to some difficulties. In fact, they were spoken about openly at the general meeting of Spolek in March. In response to my question “In what condition and how great is Spolek’s indebtedness?” chairman of the board ing. arch. Miroslav Petran said:

Dostihovy spolek met its liabilities from last season (in specific terms, payment of the remaining prize money for the Velka Pardubicka) within the deadline set by the Jockey Club of the Czech Republic. The perennial cashflow problems are no different from the time when I was not chairman of the board, only that the situation has been additionally complicated for us by the change in rates of VAT two years ago, because most of our advertising partners are not payers of VAT. Another complication is the introduction of owners’ prizes1, because this money used in fact to help us as organizers, while now it only flows through. However, the biggest problem of all is the absence of income from betting, because this is the money on which racing in other countries lives.

The sparrows on the roof are still twittering about the background to the changes in the leadership of Spolek. Long-term manager Petr Pucandl has been replaced by well-known charioteer and referee of carriage driving events Jiri Kunat, who recently applied for the post of director of the Kladruby Stud, and got through to the final round. Kunat is a skilled horse expert, body and soul, but he is further away from horseracing than he is from eventing and carriage driving. It is too soon for an evaluation of what this change has brought about. This season will show.

We asked Petran what the aim of the change in personnel was, and what the task of the new manager is.
From year to year, Dostihovy spolek takes on more and more activities, related to the effort of Pardubice to be the centre for all kinds of equine activities in the Czech Republic. Petr Pucandl remains as vice-president of the board charged with conceptual and long-term planning (Secondary school with horse riding2, the Euro Equus Project3), and with providing the main contacts with our advertising partners. The aim of this change was to divide up the workload, which was becoming too much for one person. The Dostihovy spolek team will be further strengthened by the arrival of more people for whom equestrian and racing events are a long-term job, for example Jaroslav Grodl.

Spoken like a diplomat. Interpretation: Pucandl was outstandingly successful in getting money out of sponsors and in terms of his special charisma in dealing with them. Were he to leave Spolek, which at one time he himself was close to doing, it could mean a serious breach in the flow of money into the budget, and this is something that the organizers at Pardubice cannot allow to happen. Meanwhile, at the present time, the personal relations inside the leadership of Spolek, and relations with town hall, are quite far removed from the cordial friendship of past years.

To the question how well it is turning out to have as main shareholder, together with the Town, a foreigner who is, in addition, from outside racing, Petran offered no answer:
It is not for me, as the representative of one strong shareholder - the Town – to assess some other shareholder.

The entry of a foreign shareholder (Swiss gynaecologist of Czech origin Martin Vokal) into Spolek has turned out and emerged quite differently than had been anticipated. The doctor was brought in by his acquaintance Petr Pucandl, who also invested in buying out the shares of the Drahos – Kovar duo. However, the relations inside the “Swiss” grouping are not clear from the outside. Unfortunately, though, they are no longer chums. Indeed, it is said that Vokal, represented on the board by Ladislav Nermut, would like to sell his shares, but at a price that would seem unrealistic even to a great supporter of horseracing.

What is the way out of this problem? There seems to be no medicine for personal animosity, and it will be up to each of the “players” to what extent tolerance towards others will provide communication.

On the financial level, the town hall has come up with a proposal. Spokesman Michal Zitko gave an open answer to questions posed to him:
The Town of Pardubice wants to raise the capital stock of Dostihovy spolek by a sum of 3 million crowns, provided that the following conditions are met: at its meeting on March 28th, Pardubice Town Council should approve the participation of the Town in raising the capital stock (this was done). The other shareholders will not raise the capital stock, and in this way the Town will be able to gain 51.54% of the shares of the company. Gaining this above-mentioned majority holding will signal a greater will of the Town to support Dostihovy spolek (and horseracing in general), and, specifically in 2006, and that 4.5 million crowns from the Town budget will cover the prize money for the owners of the winning and placed horses in race meetings organized in 2005. The proposed measure to raise the capital stock thus means that the other major shareholders, including the shareholder from Switzerland, must approve such a measure at a general meeting.

To put it simply, the Town wants to capitalize the loan it has made to Spolek in such a way that it will become the majority shareholder. This is the kind of revitalization project that the extraordinary general meeting of Spolek is asked to approve in June of this year.

In conclusion, just a few more calming words from Miroslav Petran:
This season has been prepared just as well as last season. We think we will be able to make effective use of the fact that the Town has significantly, in the order of millions, raised its contribution to the maintenance of the course, and this should in the long term relieve Spolek in the area of operational expenditure.

Will there be any changes in operations, in the programme of events at the racecourse, and what, if any, will these be, I asked.
We have given up two-day meetings in May and June, and we wanted to try extending the season from mid-April until mid-November. The reason for this was the weaker attendance figures than in the past at the two-day meetings, and greater interest in the weekends when there is only one racing day. We think this is conceptually the right decision, but as Sodd’s law would have it, this year’s winter did not agree.

How significant in the life of Dostihovy Spolek are the political skirmishes in this year’s pre-election struggle? Miroslav Petran answered:
I don’t think that the pre-election dance rituals have such a great influence on the company, but we will see what the situation will be like after the elections. From my present dealings with individual representatives of the parties, the council and the finance committee I see a great effort of all interested parties to resolve the development of the racecourse. It should be taken into account that raising the turnover of the company will bring us up against a certain limit of what is possible. In the long term it is unjustifiable that, for example, the state and the regional authorities should take the stand on horses that they have until now. For example, the Irish Republic supports horse racing to the tune of 116 million Euros per year. Of course, this is not a realistic sum for our conditions, taking into consideration the present-day position of horseracing and equestrianism in our society, but in view of the rising interest in horses and riding, and also the rapidly increasing number of horses, the state should rapidly set about reassessing its conception in this field. I think this is being helped along by the initiative of Karel Kratochvil, MP, on the basis of which an interdepartmental commission is emerging which will deal with equine matters.

I cannot agree with the first part of chairman Petran’s answer. In recent years it is precisely Spolek and above all the racecourse in Pardubice itself that have become to an unhealthy extent not just a parade ground but even a jousting ground for communal and regional politicians. For a Pardubice politician not to go there is practically the same as not existing. Nevertheless, support for the racecourse has not reached the same level as, for example, support for ice-hockey, where exhibitions of politicians are even more frequent. A simple equation holds: the more politicians there are at a gathering, the more intrigues and behind-the-scenes intriguers there will be, who will statutorily project themselves on to a partly municipal firm, such as Spolek is4.

Can we expect that after the elections the chairman of the board, or at least one of its members, will be Miroslav Petran?
I do not know what I can expect from the elections, but in any case I will be a candidate for one of the leading places on the list of candidates, and if I am elected I will certainly push to continue my work in Spolek. After all, to be frank, I have often wanted to chuck in politics, and the only thing that has kept me in it has been the racecourse.

written by Vlastimil Weiner

Translators notices:

1 Since the beginning of the 2005 season, a formula has offered owner’s prizes to the owners of the best placed Czech-bred horses in certain categories of races. This money, provided I think by the Ministry of Agriculture, had previously been allocated to the organizers of horseracing.
2 There is a lot of space between the grandstand and the airport, with buildings which I think formerly belonged to the military authorities. The idea is to set up a private school there, which will offer horse riding in addition to the ordinary school curriculum.
3 I do not know exactly what the Euro Equus project is, but the racecourse and the Pardubice region, as a fairly undeveloped and rural part of the EU, could apply for projects under EU rural policy and regional funds.
4 Vlastimil is right. There has been a lot of municipal (and regional) politicking at Pardubice racecourse, intriguing and also lobbying. On the other hand, Czech racing has not yet had much success in lobbying national politicians.