Arrowfield Group chairman John Messara has addressed the uncertainty that currently lies below the surface of the thoroughbred industry in an article titled “Time to put our Sport first”
Excerpts appear below. The full version can be viewed at: www.arrowfield.com.au
I have visited several racing nations in the last month, including the UK, Ireland, France and Singapore, and it seems that the bookmaker issue is one of the major contributors to the worldwide decline of our sport. Racing’s major source of revenue is being diluted through the unwillingness of bookmakers legal or illegal, on-shore or off-shore, corporate or otherwise, to pay the asking price for their utilisation of the racing product.
This is not the only problem, but it is certainly a significant one. Yes, the industry’s own failures of leadership, management and governance are obstacles to success. But, you can do little without adequate funding.
Australia’s wall to wall racing program means that the prizemoney currently generated through wagering is distributed far too thinly on a per capita basis. In fact, prizemoney in Australia covers less than 40% of training expenses; and that is without taking into account the capital outlaid by owners to purchase racehorses. That’s a fundamental reason our sport is in decline at this time, when there are so many alternative leisure and gambling pursuits.
All around the world, owners are subsidising the sport to various degrees. Their support is now close to a level that I believe is unsustainable and racing is in danger of once again becoming the exclusive domain of a wealthy minority.
Meetings like Royal Ascot and the Melbourne Spring carnival should be the highlights of a much smaller program of racing than we currently offer in our country. Whatever agreement racing has with the TAB to supply “racing product” mindlessly, seven days a week, needs revision, if racing is to remain – or rather, become – a mainstream sport.
Bookmakers are entrepreneurs and seek to gain the best outcome for themselves – that’s understandable. But they are helping to kill the industry from which they profit. Perhaps they don’t care, because they can apply their trade to other sports.
The lack of overall funding has resulted in the inability of racing to offer newcomers to the sport a worthwhile racing experience. It has been left to breeders in Australia to have part-ownership of over 80% of the horses in training.
In those circumstances, is it not time for all who have an interest in, or a love of racing to work towards a voluntary agreement aimed at reviving our sport? Here are some of the obvious concessions the major stakeholders might have to make under such a compact:
Agree to pay a product fee based on gross turnover and adjust their business model to deal with that. This would help to fund prizemoney, and capital development by Clubs – both essential for a more engaging, attractive presentation of racing to punters and fans.
1. Consolidate this sector of the industry, where possible, to minimise duplication and benefit from strategic opportunities. Clubs could then provide first-class facilities and events through sounder financial structures – again, to bring new players into the game.
2. Introduce corporate governance measures to significantly improve the quality and performance of Club boards.
Establish an Australian “Breeders’ Cup” as the Australasian championship of Racing to be run in the Sydney Autumn. This can make the Sydney Carnival, over time, a significant high profile event, as important as the Spring Carnival in Victoria.
1. Accept the importance of national direction for racing by beefing up the ARB or establishing a new national body resourced with the best industry brains, giving it powers to address a wide variety of racing issues. This will support the consistent presentation and administration of racing and allow racing to compete with the likes of the AFL, NRL etc.
2. Revise the racing program in each state to reduce the supply of racing but significantly lift its quality.
3. Establish a national TOTE pool to provide a viable wagering option for large punters, domestic and international.
1. Provide sensible financial support to the club sector to assist with the provision of infrastructure. This will ultimately increase government revenues from racing, as well as boosting tourism and economic activity for our State.
2. Facilitate the achievement of all the above initiatives through appropriate and timely legislation.
3. Review the wagering taxation required to bring NSW in line with other states.
These actions are all achievable and would normally be initiated, subject to modeling and due diligence, if racing was a private enterprise seeking to become competitive. While they may cause some short term discomfort to the stakeholders, they will make for a bigger, more sustainable industry for all concerned, including bookmakers.
But can participants in our sport place racing before their own ends?