Stallions’ Graeme Kelly canvassed various opinions on the topic of Club Mergers and if they are desirable.

RACING in Perth, Adelaide and, most recently, Brisbane - but only after more than 10 years of procrastination - are each operating under the auspices of one senior administrative body. Obviously an amalgamation of the two clubs in Sydney and the three in Melbourne would result in significant cost savings on management and duplication of office and other duties. This brings into question whether mergers in Sydney and Melbourne are desirable and whether such action would provide a long-term answer to the problems currently confronting the Australian thoroughbred industry.

Thought-provoking Randwick trainer Anthony Cummings:

“THE racing industry across Australia is in an almost violent state of flux. There have been upheavals in South Australia, Queensland and Tasmania while New South Wales is at war, it seems, with everyone and there does not seem to be any view of the finishing line. It has never been more obvious that racing administration in this country is not coping with the challenges presented by a changing wagering scene and this new invention called the Internet. As a result, the distinct prospect of the old style of administration reaching its use-by date is staring it in the face, if it doesn’t find relevance in this new landscape.
“The various state TABs are cannibalising each other and then feeding the corporates, who get their lunch for nothing. The piecemeal wagering system in place in Australia cannot continue without doing permanent harm to the industry. In my view the solution comes in the shape of a centralised administration with a ‘whole of industry’ view. It comes in the shape of federal legislation to put all the states on a level playing field. There should be one pool and a take-out rate that is attractive to the punter, but still provides for the industry in a fashion that gives owners the incentive to invest. All segments of the industry should make appropriate contributions so as to keep the industry alive and able to give adequate returns to those who work within it.
“The immediate challenge is to keep out the sectional character and put in place a mechanism for those with a ‘whole of industry’ view to be able to take charge and drag the industry into the 21st century.”

Highly respected Contract Racing principal David Moodie:

“THE racing industry is confronting many, many issues as it struggles to cement its position as a mainstream sport and to maintain its relevance in a modern society. Undoubtedly revenue protection and control of income slippage is our paramount concern in the face of a rapidly changing wagering market.
“All users of our product must be required to pay a commercially appropriate fee in order that there is growth in the industry for the future good of all participants. Current large-scale increases in corporate bookmaker turnover are not being converted to worthwhile industry revenue, and the free ride being afforded the corporates must be brought to an end. In Victoria we have an absurd arrangement whereby industry revenue is tied to the nominated gross profit of corporate bookmakers thereby tying the industry’s welfare to the commercial success or otherwise of third party wagering operators and with no underpin whatsoever.
“Similarly we live in an administrative environment of racing established in the 19th century and still acutely recognisable as belonging to that era. Multiple numbers of metropolitan race clubs are an anachronism long past serving the industry appropriately in modern times. This situation is a disconnect to the distant past when there was a racecourse in every suburb, the membership of which was made up of local owners wishing to compete amongst themselves. This is no longer our model and has not been for a long, long time. Race clubs should be seen as event organisers, and their members as event attendees. The participants being owners, trainers, jockeys and the employed workforce, who are the real industry members. They put the show on and they need racecourses to do so.
“The need for racecourses should not be confused with the need for multiple numbers of metropolitan race clubs. Obviously ‘blind Freddy’ can see the duplication of services and costs being generated under our current model. Just read the Ernst and Young report into metropolitan New South Wales. Western Australia, South Australia and now Queensland have moved to a single metropolitan club, and there is both immense political and industry pressure for New South Wales to follow suit. So where would that leave Victoria? Should we in fact continue to squander tens of millions of dollars on many layers of administrations?”

Australian Trainers’ Association chief executive John Alducci:

“IN light of the merger of the two metropolitan race clubs in Brisbane and the inevitability of some form of rationalisation of the two metropolitan clubs in New South Wales, there is a similar inevitability that the three metropolitan race clubs structure in Victoria must and will change. The Australian Trainers’ Association strongly advocates resource sharing, a rationalisation of the administration of racing and the merging of many of the functions to introduce efficiencies, eliminate duplication, and deliver a structure of governance and administration attuned to successful modern commercial and business practices.
“The ATA’s view on this issue has not changed since industry stakeholders and shareholders were called together by Racing Victoria Limited several years ago to discuss, among other things, how the industry could be streamlined to deliver savings that in return could provide extra funding for Victorian racing. It is always a far better option to address these issues from within the industry and achieve an outcome that can be supported by all participants, than have a structured governance and administration forced upon the racing industry by a team of bureaucrats or consultants, who may not fully understand how the racing industry operates, or worse still, are driven by a political agenda.”

Former long-serving National Racehorse Owners’ Association of Australia chairman Nick Columb:

“THE recent history of Australian horse racing has been forged against a backdrop of self-interested amateur administrators. Concurrently, the experience of successful and responsible sports in the modern era, is that a single national (and sometimes international) administrative body is required to co-ordinate and optimise key aspects such as rule making, marketing, media rights and so on.
“Examples of these sports are cricket, tennis, soccer, the Australian Football League and Australian Rugby League. The fractured and ‘social club’ nature of the thoroughbred industry has definitely inhibited its growth. Consequently, it has lost its traditional share of the gambling dollar and is suffering through lower attendances - apart from major events. The consolidation of race clubs, where relevant, will eliminate duplication and improve the utilisation of assets, in the interest of all participants, so that racing can survive and thrive within a very competitive leisure market.
“Ernst and Young postulated that the annual dividend generated through a merger of the Australian Jockey Club and Sydney Turf Club could reach $40m. A great part of this could be channelled into prizemoney, which is the life-blood of the thoroughbred industry. There would also be considerable strategic benefits from the union of these two cash-strapped and stagnant clubs. This is not a new hypothesis with New Zealand and Queensland already choosing to follow this path. Their experiences can be examined and, if proved progressive, should be replicated in Sydney and Melbourne as a first positive step taken by those racing jurisdictions seeking a more united and national approach.”

Highly respected Lomar Park Stud principal Fred Peisah:

“I CANNOT see an amalgamation of clubs being anything more than scraping the bottom of the barrel as far as providing an answer to the problems confronting the racing industry at the present time. I haven’t seen the balance sheets, but I would think that the savings from an amalgamation of clubs would not provide much more than one per cent of the money needed to ensure the viable future of the industry.
“In my opinion the major worry, when people begin talking about merging clubs, is that it might be a type of subterfuge that will eventually lead to the government taking over racing. As far as I am concerned I would not want to have the government, or any government for that matter, running racing. I have spoken to people about this concern of mine and they say having government running racing would mean having access to a wider range of people who could head-up the industry. My answer to that is, if people are not sufficiently interested in racing to join a club they not be the right type of person to be running racing.”

Patinack Farm chairman Nathan Tinkler:

“WHILE the synergies of a merger (between the AJC and the STC) are now apparent, hard decisions must now be made. I call on the Minister (The Honourable Kevin Greene) to capitalise on the much needed work he has undertaken to date, and take decisive steps to implement a strategy immediately which will deliver a stronger and sustainable platform for the growth of racing in New South Wales for participants new and old.
“We are fortunate in this industry to have people with a vested interest who are also extremely successful in their commercial endeavours. At this time our industry needs these people to play a major role in building a sustainable future for racing’s participants in New South Wales. These people need to be engaged in setting the agenda for the future, and bringing racing in Sydney into 2010 and beyond.
“As racing club members and participants we all need to dispense with the emotion of club membership and unite to support a stronger and more sustainable product, which will deliver entertainment to the racing industry for many years to come. The core of the racing industry is pure entertainment, and I call on all racing enthusiasts to address racing as such.
“Enough with the impassioned testimony from committees and members holding on to emotional debates. Our much loved industry is dying and we all now have the chance to support a new commercial model, which can secure its future. Business today is very different from what it was even a year ago, given the impact of the financial crisis, yet our current racing club governance has not changed in a lifetime.”

Leading owner, breeder and businessman George Altomonte:

“I REALLY don’t know enough about the internal workings of the clubs to make a constructive comment, but what I believe must not happen is the selling off of Canterbury racetrack. I have always been opposed to this suggestion and I say that mainly because racing in Sydney, if the clubs get their act together, should expand.
“If this expansion occurs then I think Canterbury would have a fairly significant part in the future of racing in Sydney. Also, one must bear in mind that due to the different controls and rules in development since these clubs were established years ago it would be impossible to get a similar operation approved today . . . and where would you find the sort of land that would be needed?”

Permalink| Nov 13, 2009

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