Money is the Issue / National / 21 Nov, 2008

Victoria’s Spring Racing carnival is the show piece of the Australian Thoroughbred Racing Industry. It’s a time when the industry comes alive – when the horses, trainers, jockeys, owners, breeders chase their moment in the sun. It’s a time for celebration and reward for the lucky ones for their hard work and planning. For Australian racing it guarantees prime time coverage in the electronic media and headlines in the print media. Nowhere else in the world does the focus of an entire nation turn to racing and its iconic horse race – the Melbourne Cup.

But beneath the euphoria that the Spring Racing carnival generates are a raft of wider, unresolved issues that continue to divide the Racing Industry and stand in the way of progress and prosperity of its participants in every State.

The common denominator in all these issues is MONEY and the way that the racing industry is funded. Funding is one of the biggest, if not THE biggest, and most critical issue, facing the Australian Racing Industry.

Wagering revenue, the lifeblood of thoroughbred racing, is increasingly struggling to deliver the cash flows required to keep racing self-sufficient and deliver both the growth in returns to owners that is necessary to counteract the rising costs of racing, and fund the operation and functioning of the industry in each State. And it’s not going to get any easier, with the dark clouds hovering over the Australian and global economies.

To make matters worse, the wagering license renewal process in many States is about to be put out to tender in the open market – a market that is under so much pressure that it may well struggle to deliver a competitive tendering process. The implications for the Racing Industry are far reaching.

Racing’s infrastructure – the racing and training tracks in most States in both the metropolitan and country areas, are in dire need of major capital investment to bring them up to speed to cope with the needs of a cramped racing calendar and irreversible climate change. Australian racing, regrettably, does not have the luxury of a Chantilly or Newmarket where trainers and their horses enjoy the benefits of a unique natural environment and training complex.

Training facilities and racetracks are of great concern to the ATA. There is little doubt that under the present funding model for racing, some hard decisions will be made on the future of many racing and training tracks. The reality is that some of the smaller tracks will struggle to survive. The sheer volume of funding that will be needed for many of these tracks to comply with Government imposed safety and OH&S requirements is in itself massive and in most instances will be too great a funding challenge for race clubs and state governing bodies.

Prizemoney is and has been unacceptably low in recent years - failing abysmally to keep pace with the spiralling costs of racing. While racing’s governing bodies keep making the right noises about prizemoney, the reality is that so far it is no more than just rhetoric. They need to do more – a lot more, not just to find the magical new revenue streams.

They also need to get their collective houses in order. Racing can no longer afford its outdated governance structure dominated by dysfunctional decision making processes and massive duplication of functions. Time is running out for the clubs and governing bodies to get it right. It is stating the bleeding obvious that there are too many race clubs, too many inefficiencies and not enough prudent resource sharing. Can Victoria and New South Wales seriously justify so many race clubs in the metropolitan and country regions each with their own administrative structures basically replicating what each other does? Thoroughbred racing appears to be one of the few industries that still operate in a world of its own where the necessities of operating on a tight budget and making cost savings and efficiencies doesn’t seem to matter or be a priority.

It is no secret that racing is in decline world wide. In the UK, Europe and the US wagering turnover is either stagnant or in decline. In Italy there have been no race meetings for the past three weeks with two Group One races cancelled – the reason, trainers and owners have refused to participate because of major cuts to prizemoney, caused by reduced turnover. Prizemoney in the UK and Ireland is under serious and continuing threat. The planned sale of the “Tote” in the UK has just been abandoned by the UK Government because of the certainty that it would be most unlikely to realise market value in the current economic conditions. Yet, when the UK racing industry put in a bid to buy the “Tote” last year, it was knocked back because the bid was considered to be under market value. Surely the alarm bells should be ringing for our own State Governments with the wagering license renewal process imminent in many States.

What is of real concern is that what so many of our own Governing Bodies and their hierarchies promised in the way of the “rivers of gold” that would flow from intellectual property, vision, new media, sponsorship and other so called new revenue streams are yet to eventuate. The real question is will they ever deliver the returns that we were conditioned to expect, particularly now that both the world economy and our own backyard are tetering on the brink of recession.

These are tough times for the Australian Racing Industry. These are also times when the governing bodies and racing administrations must demonstrate the leadership that they were empowered to provide. It is simply not good enough to expect the participants or stakeholders alone to again shoulder the burden of cost cutting, stagnant or reduced prizemoney, outdated training and racing facilities and the like. Trainers Australia wide have been putting up with inaction for too long. Their patience is fast running out.

Federal President: Colin Alderson