By Keyser Soze in Australia
RACING’S TEMPORARY REPRIEVE…
“The King is dead, long live the king”. It’s a phrase that has been around for centuries, and had more relevance and cache in an age when monarchies were relevant and reigned supreme. Just like racing did, when it was the sport of kings and the only game in town.
Racing’s resilience has been remarkable. And just like the monarchy’s mortality does not end with that of the king, racing has survived its own series of threats of extinction, its battles and wars from within and without. Battle scarred it is, but rumours of its death have largely been exaggerated.
But racing, as we approach the end of the second decade in the new millennium, is not in good shape. It’s hanging in there, precariously, but for how long?
Sure, life is evolutionary, and that goes for everything associated with it, and racing is no different. But with the technological revolution, and its continuing and exciting evolution- twittering furiously by one-dimensional bottom feeders with their colourful vocabulary and petty politics aside- racing is being left behind and shows no sign of being part of- and adapting to- an exciting era. It is being passed by, every day of every year, by many of those in charge of pulling horse racing up by its bootstraps and breathing life into a sport on its last legs- all those vapid overpaid racing executives gazing at their navels and wondering where the hot air is coming from, and an old school racing media trying desperately hard to be new and relevant. Please.
The question that increasingly comes to mind is what does racing stand for, and what, if any, are its priorities? And does it have those priorities in the right order?
It is difficult not to recognize the fundamental economic arguments faced by every business and sport. Racing, like any other business must have its balance sheet in the black. Businesses and entire nations, who continue to operate with red ink awash in their balance sheets, are living on borrowed time and, inevitably, with a world of pain just a heartbeat away. The fallout from the cocaine-induced decision making by the corporate cowboys of Wall Street and their counterparts in Europe, reverberated the world over. And to take it further, is there a better example for trading insolvent than Greece?
While racing in many countries is literally walking a tightrope on a very shaky and shifting financial precipice, in some countries, particularly in Asia and in the Australian States that matter – NSW and Victoria- black figures are a welcome result in the bottom line of balance sheets. But like most statistics and account numbers, they don’t always tell the REAL story.
In NSW and Victoria, revenue for racing is generated primarily through their traditional pari-mutuel wagering partner – Tabcorp. Since product fees were introduced on the turnover of corporate bookmakers and wagering operators, the racing industry has enjoyed a much-needed boost to their revenue flows and which have contributed to the healthy bottom line of both Racing NSW and Racing Victoria. Add to this the growing popularity of fixed odds betting and one could be forgiven for believing that Australian racing’s cash flow and wagering revenue growth problems were consigned to the past.
The sting in the tail is the very uncomfortable reality, and the daunting challenge for racing, and its administrators, that the continuing popularity and double digit growth of the corporate bookmaker sector, whilst undoubtedly expanding the wagering market, and attracting “new” punters, is cannibalizing the revenue streams of the “old world” that is the pari-mutuel or totalizator wagering sector. This has been and still is the financial lifeblood of racing.The corporate bookmaking operations are based on a low cost telecommunications and online model with no retail presence, and an almost unlimited marketing budget using brash, but hugely successful “in your face” advertising and promotion campaigns.
Astutely, and unlike their pari-mutuel totalisator competitors, they have developed a savvy and simple suite of wagering products which appeal not just to existing punters, but importantly to “newbies” who don’t understand and are confused by exotic bet products and the almost unintelligible racing lingo that the “old world” thrusts on them.
The clear and present danger for the racing industry is that continuing migration to fixed odds and corporate bookmakers products, at the expense of the totalisator, will ultimately create a confronting financial problem for racing. And that time may be just a few very short years away. As the Stones sang on Gimme Shelter, “It’s just a shot away.”
The far bigger problem for racing is whether their administrators and counterparts at Tabcorp have the vision, strategies, management skills, capabilities and courage to challenge themselves and their boards to think outside the square and develop new initiatives, innovate and be opportunistic in the present brief honeymoon period, which the wagering environment finds itself in, to compete on product price and promotion with the corporates and reverse a trend which, if not checked, will become irreversible.
Racing must approach the challenge holistically. To do so, it must define what it stands for. It must challenge its conservative, stagnant, outdated thinking, and culture. It must embrace innovation and commit to change and reinvent itself on an on-going and regular basis.
Cricket is a stunning example of how a sport has been brave enough to challenge the naysayers who predicted the demise of the game and prematurely wrote its epitaph. Instead of suffering from Soft Cock Syndrome and shrivelling up, it bravely conceived the 20-20 format and its incarnation in Australia as the Big Bash league (BBL), which, this season, is playing to packed houses with attendances nearing 52,000. The critics were right: The game will never be the same as it was a century and a half ago. But this is because someone reminded cricket administrators that this was indeed the 21st century, and technology had changed the rules of engagement forever.
Not only are the 20-20 games being played to packed houses each night, despite live television and online coverage, but 20-20 cricket is co-existing peacefully, and has even expanded its footprint in the media space with its longer traditional test cricket format. Day/Night test cricket, pink balls, big balls, miced up players, NEW broadcasting formats using NEW technology, and everything coming together to create a party atmosphere, has the turnstiles clicking, and revived interest in a sport, which is as old as horse racing, and, to a great degree, was as boring as racing is today.
These challenges are not confined to Australia alone. The buoyant racing economies in Asia will need to be ultra vigilant to stay ahead of the game, and the inevitable challenges, which they will face, financially and from their competitors as the world becomes an even smaller place- a more selective place. Lose that customer, and the odds of getting them back are very slim. Why? They have better things to do with their time than to sit around being bored with people who they have nothing in common. They have better things to do than being force-fed facts and figures. They’re looking for a few hours of escapism from their daily routines- not an obstacle course in maths. If horse racing can’t offer this to them- and simply- they’ll leave the building with Fat Elvis.
For Australian racing the lessons are simple. It needs to refresh its leadership. Desperately. Its leadership needs by-pass surgery – literally. Racing is devoid of flair and intuition. Is there a better time to exploit its financial honeymoon and be opportunistic in having one big crack at reinventing itself? Or will racing die wondering of what might have been?
THE KENSO DEBACLE
The decision to start all over again with the cursed Kensington inner track at Randwick is yet another example of Australian racing’s continuing inability to get things right with its racing surfaces.
The curse of the “Kenso” track dates back to when its was first laid with a strath ayr surface and problems arose almost from day one when anything from drainage to grass. and an inability to cope with even the most lightest of racing schedules, prompted the ATC to pull up stumps and undertake an expensive renovation which was a spectacular failure. But the problems did not end there. Yet another renovation program was undertaken only to end disastrously with both the ATC and Racing NSW announcing this week that the Kenso track would be dug up and a completely new surface installed. The culprit this time being the grass. If at first you don’t succeed, then fail and fail again.
It seems obvious that somewhere along the decision making chain, both the ATC and Racing NSW are getting things horribly wrong. If they are not accessing the best available expertise then it is an indictment on management. NSW racing has got a mindset and culture of extreme “penny pinching” and confusing its priorities, which continues to impact adversely on all aspects of the industry, and ultimately imposes a heavy financial drain on industry finances – like the $2.5 million white elephant which the Kenso track has become.
If Racing Minister Troy Grant does not ask questions about the decision making process, and this sorry debacle, then he must. After all, tax parity monies should not be spent fixing up errors to do with racing surfaces. But how many times must we keep saying that questions must be asked?