Horse of the Year failings under scrutiny

By Victoria White

4 comments
SMC events manager Dave Mee.
SMC events manager Dave Mee.

The event managers behind the 2016 Horse of the Year will continue to run the show, but may be asked to contribute to the event's $170,000 loss.

These are among the recommendations to be discussed at a Hastings District Council meeting tomorrow, following an independent review of the annual event.

After 18 years with event management Eventpro, last year SMC Events was awarded a five year contract to run Horse of the Year (HOY).

In June it was confirmed the 2016 event resulted in a forecasted loss of $170,000.

Hastings Mayor Lawrence Yule said the review, written by Craig Waterhouse, showed HOY was a good event which provided up to $12m to the economy every year.

"There are certainly some learnings from this year, but it is a transition year from a long-established operator to a new operator and there were bound to be some sort of hiccups along the way," he said.

Despite breaching a delivery agreement with Horse of the Year Hawke's Bay, the first of the council-requested report's recommendations was SMC be retained.

SMC events manager Dave Mee said given what they had delivered, and very high satisfaction levels, he would have been surprised if there was any suggestion from the board that SMC did not continue to manage the event.

The report stated a change would not only increase the show's "significant risk", it could damage the "HOY Brand", and would create the same risks as last year - the change from Eventpro to SMC was thought to be a factor in the loss.

SMC had struggled with the complexity of the event in its first year due to a lack of knowledge, the report stated, and a lack of handover to SMC and short lead time had contributed to a lack of understanding on a number of issues, and financial arrangements.

While he partly agreed with that reasoning, Mr Mee said: "I wouldn't say there was a lack of understanding of issues, rather that it contributed to additional time pressure to understand everything, which impacted certain areas of preparation".

As a result of SMC's inability to deliver budget, the report stated they were in breach of their delivery agreement for the show, and the board could consider asking for a contribution to the loss from future profits.

When asked if the company would, Mr Mee said he thought that view would not be shared by the HOY Board.

HOY Board chairperson and Hastings deputy mayor Cynthia Bowers said SMC had already contributed a portion of the costs - by not making a profit they did not receive a performance based fee.

"They actually have invested more resources in the show than they've been paid for, they're carrying a significant share of the loss in their company books," she said.

While being managed by Eventpro, the event had operated at a loss four times, with the most significant in 2009 at a $225,000 financial loss.

Although it had been a success for Hastings, and participants, the report stated HOY had never built any financial reserves - as the event was "high risk" it needed cash reserves to manage risks appropriately.

The report also noted as HOYHB held very little capital, consisting of $90,000 of shareholder loans, it was difficult for the company to "weather financial losses".

It recommended the council provide funding for HOYHB for increased working capital, and supply additional host city sponsorship - this was increased to $70,000 for the 2016 event from $35,000 previously.

- Hawkes Bay Today

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