EA Response to Equestrian Life's 'Ryan's Rave'

  As Chairman of EA, I would like the opportunity to correct a number of matters as well as provide further details to your readers and online followers.  I have taken the liberty of outlining the misleading statements made by Mr Ryan and providing the facts on the matters.

1. Supposed sponsorship deals were shrouded in secrecy and details even withheld from some members of the Board on grounds of commercial sensitivity.

Whilst I can only make comment on this topic since the current EA administration has been in place (April 2010), I can confirm that at no stage has any national sponsorship deal been entered into without the full knowledge and sign off from the sitting EA Board.  The minutes of Board meetings and Board correspondence would reflect this.

2. The ICT project has to date costs the membership over $1.2 million and continues to cost $10,000 per month in hosting and licencing fees.

As reported in the EA annual reports, the total capital expense on the ICT project was $809,000 which has been funded by various funding sources including Government and sponsorship funding. Operating costs of the ICT project have pushed total expenditure toward $1.2 million.  However, direct membership contribution to EA finances averages only 9% of Equestrian Australia’s annual turnover. To state that all this money was used to fund the ICT project is misleading and wrong. The ICT project has not delivered on its significant investment. Fixing this is a high priority of the Board and Grant Baldock as CEO.

3. In 2011 the EA membership was 18,750 and in 2012 the membership is at 13,500

This statistic is wrong - membership figures of EA as published in the 2011-2012 annual report shows a membership of 18,294.  While EA recognises there has been a slight decrease, we are working hard to attract new members through the introduction of the new membership structure, programs like Ready Set Trot and our partnership with Pony Club Australia. The membership decrease that Mr Ryan outlines is not true and EA’s membership remains healthy.

4. In 2012 the EA lost $450,000 and had a $500,000 negative cash flow

This statement is misleading. An examination of EA’s “statement of cash flows” in the 2012 accounts, demonstrates there is clearly a $459,377 outflow of cash for payments on the ICT project. There was also reported a net cash negative movement of $515,251. If you analyse the financial statements from 2011, there was a net cash decrease of $26,271 overall. In 2012, EA had sufficient cash reserves that mitigated any cash flow issue. Further to this, EA does own the EA National Office building outright and is valued conservatively at $625,000. The equnect project did require significant investment from EA, however EA is on track to record a strong financial position for financial year 2012-2013.

5. Membership benefits are critical and it is important our membership again grows.

In this regard, I can agree wholeheartedly. The new national membership structure has been released and is designed to make it simpler for new members to become involved in the sport as well as provide value for members competing at all levels of EA.  In addition, EA has partnered with Pony Club Australia to offer cash incentives to members who are dual PCA and EA members, as well as offerings through our online store, additional insurances packages, member only offers during the Olympics and much more. As outlined in EA’s seven (7) strategic priorities ‘Creating our future – 2011-2016’, EA has a firm commitment to our members.

6. National wages were under three different headings in the financials primarily to disguise the fact that the wages had increased by $500,000. For the last 10 years preceding last year’s wages had increased by $90,000 per year.

Firstly, the financials do not try to “disguise” the wages.  In the financial accounts, the salaries fall within their respective departments, giving a more accurate picture of that department’s income and expenditure.  EA administration follows best practice financial reporting policy as dictated by the EA Board.  Salaries are now contained within the EA department budgets where historically they were put in other areas such as ‘contractors’.

If you consider the example of our High Performance staff - some of these positions were previously regarded as “contractors”, but they are now counted as EA staff. In EA National, the salary overall increase has been approximately $320,000. Why the increase? EA has received an additional $1.1 million of non-membership based revenue to be able to deliver specific member programs as well as to assist in diversifying the current income streams. EA needs staff to deliver these programs and bring on our new sponsors and investors. It is also important to note that of the 19 staff employed by EA (not all of whom are full time), 9 positions are funded through ASC funding.

7. At present the horse industry is not recognised by EA.

I assume this statement is implying that EA is not recognised by the horse industry. EA is the recognised industry leader in the non-racing performance sector. This successful advocacy and industry positioning has been delivered and maintained by the efforts of EA CEO, Grant Baldock.   Success in this area is significantly confirmed through EA’s involvement and signatory (as an individual) of EADRA which is the Federal Government deed that provides protection and funding if there is a national outbreak of exotic disease. EA is an active participant in Animal Health Australia (AHA) including being the only horse industry representative to assist the board of the AHA to develop their strategic plan in 2011.

The EA CEO is invited by other industry groups to sit on the board of the Australian Horse Industry Council (AHIC), providing Equestrian Australia a voice within the broader horse industry. The Board, through the EA CEO, is also an active participant on the government Horse Industry Consultative Committee.  During the last three years EA has also signed cooperative agreements with Pony Club Australia and the Australian Stock Horse Society – a direct result of our strong stakeholder relationship, built between the current CEO and the respective administrators of these groups.

8. The EA does need to come to terms with an approach that will entice corporate sponsorship. AND We are sponsorship disasters

EA has seen an increase in sponsorship revenue of 480% since 2011 including the signing of 6 new sponsors – Australian National Preventative Health Agency (ANPHA), IRT, Gow Gates, Inglis, Eurosport and Equiline.  Not only have these sponsors served to provide additional support to EA national programs, but there has been more than $150,000 per year going directly to support event organisers around the country, including supporting our major grassroots program being the State and National Interschools Championships.  This clearly demonstrates that EA is not a “sponsorship disaster”. EA has the proven ability to bring on national partners, and has delivered sponsorship funding back to our events and grassroots programs.

I want to unreservedly confirm the EA Board’s support for the EA CEO, Grant Baldock.  The serious allegations of bad performance are unproven and it should be made clear that Grant’s responsibility as CEO is to implement Board policy.  The CEO does not make decisions in relation to policy, that is the Board’s role, and the areas that Mr Ryan has highlighted in his Rave directly relate to Board policies.

While the current Board has recognised areas for improvement, we have continued to demonstrate open, honest and frank communication. It is important for me as Chair to not only highlight these specific incorrect criticisms of Grant and EA’s management, but to also show support for the leadership team we have in place at EA, including our CEO.

What is most disappointing to me as Chairman of EA, is Mr Ryan’s failure to recognise the significant achievements of Equestrian Australia during Grant’s time as EA CEO which include:

• Securing an additional $1million per annum for High Performance and Participation funding from the Australian Sports Commission (ASC) in addition to this $150,000 of one off funding.
• Development and implementation of the EA strategic plan providing one vision, one purpose for all levels of the sport, from the national office through to states, disciplines and committees.
• Increase of sponsorship revenue by 480% (from $60,000/pa to $352,500/pa) since 2011 including the signing of six (6) new sponsors.
• Launch of the Be the Influence Equestrian Grand Final that has now been delivered for two consecutive years in different markets.  This has attracted 1.5 hour free-to-air (FTA) broadcast, 7.5 hours of pay TV coverage and international broadcast opportunities.  More than 12,000  spectators annually.
• Launch of the Patrons Club program through the Australian Sports Foundation that funded the new European Training Base scholarship program for young riders.
• Implementation of Operation Greenwich Gold that assisted in securing increased national media exposure, boosted EA’s social media (increase 375% in 9months) /website traffic (increase 146% in 12months).
• Gold medal at the 2012 Paralympic Games – Joann Formosa, with all Olympic/Paralympic disciplines qualifying teams for the 2012 Olympic/Paralympic Games – for only the second time (Sydney 2000 we gained automatic qualification).
• Signing of the Pony Club Australia MOU (long standing agenda item for EA since 1956). Has resulted in better relationship and increased joint initiatives.
• Launch of ‘Ready Set Trot’ a junior participation program that is a joint initiative between EA and Pony Club Australia - this program is EA’s answer to AFL’s Auskick or Tennis Hot Shots program.  In fact, the Federal Minister for Sport recently recognised Ready Set Trot at a national Australian Sports Commission Conference, stating the program alongside others as being “innovative”.
• Implementation of a national membership structure that focuses on attracting grassroots members and resulted in the membership categories of equestrian being reduced from 56 categories to 6.
• Ensured that Equestrian became a driving force in the equine industry within Australia through increased cooperation with the recreational horse sports sector and racing sector within Australia.

The above are just some of the many achievements that have occurred since 2010.

As Chairman, I’m not here to declare that everything is perfect and that our sport and its historical management are without its faults, because it’s not.  EA still needs to find a long term viable IT solution for the whole sport, EA wants to attract more sponsors and create additional revenue streams. We need to grow our membership and look at what incentives we can offer to new members as well as build participation through programs like Ready Set Trot.  In addition to all of this, EA has the World Equestrian Games fast approaching and the new high performance programs are now being finalised to help put Australia back at the top of the world equestrian sporting stage.

The EA Board is working with the state EA branches, EA sport committees and the broader membership to bring about positive changes.  This sport needs unity and members and groups to work together to bring about desired improvements.

I encourage our members to get in touch with me with their feedback and suggestions – email [email protected]. If members have ideas, I want to hear from them. Unfair, unfounded and incorrect criticism of EA and its CEO, doesn’t serve anyone or our sport any good.

Regards,

Dr Warwick Vale

Chairman, Equestrian Australia