THE PROBLEMS WITH THE BUSINESS OF HORSE RACING

By Hans Ebert

“This is another fine mess you’ve got us into”. It was a running gag in nearly every Stan Laurel and Oliver Hardy movie. But the genius of comedy and the crux of much of its appeal is that beneath the laughter and lightness lies a message, a reality check that can instantly bring us back to earth.

opening

And so it is with the Australian racing industry which has been in free fall for some time. What has sped things up at an alarming rate have been the number of Laurels and Hardys in racing in Victoria, who have contributed to a laundry list of integrity issues mixed with embarrassing bumbling, face-saving U-turns, accusations of bullying, politics, pettiness, extreme vindictiveness right across the spectrum of every group that makes up racing. The flagrant disrespect for rules coupled with a directionless executive and rabid self-serving agendas by those at the very top of the tree, has fuelled an almost weekly outbreak of lawlessness in Victorian racing. The mess doesn’t need more airing here. This is for those being paid the big bucks to put their house in order. Or, as has been reported, for Victoria’s Minister of Racing Martin Pakula, below, to step in, bring all the warring factions together, and read these highly paid executives the riot act. But how will this change anything? Really.

opening 2

We’re not talking here about a headmaster lecturing the Dead Poets Society or The Young Rascals. These are supposedly shrewd, mature businessmen in their fifties and sixties, who have either been recruited into the racing industry, or have pursued a career in it for, perhaps, equal parts passion for the sport, and the financial opportunities to be had. How well are they at doing their job? Is it almost a part-time gig before retirement? Or even a hobby? Who knows. But when questions and doubts like these are raised, especially in today’s nanu-second social media world, the problem doesn’t go away. It multiplies. One thing’s for certain: their actions speak loudly demonstrating an ineptitude that keeps racing in the bottom end of sports and entertainment from which position it will struggle to create it’s own raison d’etre.

opening 3

For Martin Pakula, the decision was simple. The schoolyard had broken out into open warfare and it was time to read the riot act. But reading the riot act must be backed up by decisive leadership from those in the highly paid executive roles in Racing Victoria, and not the usual serving of waffles. That’s become boring. It must be made very clear that the sport does not tolerate lawless behaviour. Action speaks decibels louder than words and the unruly mob needs the book thrown at them. It’s the only way to bring order into the schoolyard. Unless this is made very clear, you might as well save yourself the angst and let civil war inflict its inevitable damage on racing. The arsonists, especially the two-faced ones, setting fire to racing must be apprehended. And thrown out.

opening 3b

Let’s say, Pakula gets rid of all the misfits who have allowed Victorian racing to freefall out of control. Or at least the well-known plodders who usually get paid off to leave, but, like a boomerang return through the back door with a new title, something not exactly lost on people. It’s hardly the type of management strategy that the sport needs. It shows the Old Boys Club at work and being a law unto itself incapable of maintaining discipline in the asylum. Plus, let’s get to the crux of the problem: Where ARE the new generation of racing executives- and the racing media- the new blood and young turks with the creativity and business chutzpah needed to make a difference? To bring about Change? Or is Change- real Change- even on the agenda? Or is it all about chump change and keeping the natives in check and ensuring they don’t get so restless that they storm Le Bastille screaming, “Off with their heads”?

opening 3c

It is hard to identify one industry sector, or more relevantly, a sport, which is in as dire straits as racing in its desperate search for a “new breed” to lead it out of the wilderness in which it has been living in for so long. Racing faces a Darwinian dilemma. It’s a survival of the fittest, and right now Racing is in intensive care.

opening 3d

What’s not happening down there- and how and why it’s reached this tipping point that’s tipped over- is something that perhaps the entire racing industry should study. And make it a case study on how not to do things if horse racing is to move forward by reinventing itself.

opening 3d2

There are, of course, some good, decent people involved in racing in Victoria, just like in most other racing jurisdictions. But even the most loyal and patient of these have been hopelessly let down by those above them. Add to this the open warfare between those administrating the sport and those keeping the sport alive- the participants- and what you have is an industry under siege, but with seemingly nowhere to go as it’s reached the point of no return. It’s been saddled with historical problems going back decades that were allowed to happen. It’s created its own version of the mafia and the various Dons are still in charge- still making offers “they” can’t refuse.

opening 6

It’s about power and control and lip service. The more things change, the more they stay the same. And stagnate. And when the Dons have their own personal agendas, and things as obvious to their business as improving so-called “content” by looking beyond the obvious, and having their one real product- the horse racing- presented to racing fans in the 21st century just as it has been churned out since the Eighties or even earlier, how is the customer base to be expanded? How will it attract all those, including business partners like technology companies and sponsors to whom the sport is not exactly top of mind awareness, when available to them is a veritable buffet of far more exciting choices? Just like Stella got her groove back, horse racing needs to find its new mojo. But how?

opening 6b

What many seem to have either forgotten, or else fail to comprehend, is where these visionaries needed to lead horse racing back to some new fangled version of The Garden of Eden, while walking on water and side-stepping the serpents are going to appear from. Chauncey Gardner disappeared. He quickly tired of the bullshit the world was laying on him. He didn’t need to deal with his disappointment of people. The users, abusers, fakers, fakirs and losers. He just liked to watch.

30jul 1

What exactly is the hiring process before tackling leadership gone walkies? How many of us have rolled our eyes at many of the new hires, and wondered, Why, How? And, of course, we continue to be baffled by those who are kept on- and on and on- despite their serial blundering, despite their total incompetence, and seeing mediocre executive material lucky enough to hitch a ride on the gravy train in what is a largely insignificant industry? Is it because mediocrity has this magnetic attraction of attracting mediocrity?

opening 6b2

Apart from Hong Kong, is there any other financially successful racing jurisdiction? Japan? Hmmmmm. The JRA is successful, but not without its problems, which is not to say that 1 Sports Road, despite being the benchmark for racing clubs, has not made its own baffling hires over the years. But the HKJC is no one trick pony. It’s much more than a racing club plus has created and manages its products extremely well. Put this down to excellent leadership and probably the most knowledgeable and effective Security and Integrity Unit in world racing. And Racing without Integrity is an Emperor minus his robes.

opening 6b3

What we’re trying to come to grips with here are the hires- why racing clubs keep going to the same old well and dragging up the dregs? Is this the problem of the Human Resources people who try to second guess who will be “approved” as opposed to having the courage of their convictions to say, “We need a complete change, a reorganization and a new organisation chart and here’s the team recommended”? Sound familiar?

30jul 5

But as we know, Human Resources in any industry doesn’t work this way. They’re usually weak, they’re shallow, they’re creatures of habit, and go about their jobs with the shadow of fear hanging over them. Their modus operandi is finding ways to simply keep their jobs. It’s not about hiring anyone good as these people might quickly see that those who’ve hired them are the problem and not the solution.

We’ve asked these questions before and we’ll keep asking them: Who hires these human resources people? Isn’t senior management or the Executive Team and ultimately the Board of management responsible? Doesn’t the buck stop with these people who hire and fire? Do they know what makes someone a good Human Resources person? And why does Human Resources have such a huge say in the hiring process? What’s their relevance in 2016? Or, like everything else, despite all this talk about customer demographics, customer engagement, social media, hashtags etc, has anything actually changed? Like the role of the Human Resources person or for that matter the grossly overrated Executive Recruitment agencies? Have these obscenely overpaid Head Hunters ever hunted down the right Executive for racing?

part 2 6b

Isn’t it all about the Big Poohbah making all the decisions, and his sedated executives making meowing sounds around him? We’ve seen it, and it’s uncomfortable looking at these people made to look like the amateurs they are and incapable of sticking up for their ideas because they have none. Worse is when they flip flop, give up, give in, and do only as they’re told. Again, it’s about survival and thinking this is the safe way out. Or in. It’s because they’re not good enough. They’re the duplicitous Yes People.

part 2 6c

While everything changes when it comes to consumer trends, too many in industries- horse racing included- stick to those time-honoured strategies of furiously sucking up, paying lip service, not knowing when they’re being bamboozled by bollocks, depending on selective memory recall and finding all the usual ways to avoid accountability. But as we keep hearing how a fish stinks from the head down, where the buck must stop with the Big Guy, and all the Neros who continue to fiddle while their respective Romes burn, it’s allowed to happen. Time and time again. Why? Because it’s the way it’s always been. Because racing is Risk Averse. Despite its vague and posturing efforts at planning for the future with voyeuristic five or ten year Strategic Plans, the truth is that Racing fears the future and the dynamism that a new breed of management would bring in the exciting digital age, which all, except racing, seems to have embraced. Racing is out of sync with the consumer/customer who is spoiled for choice and more demanding than ever in making that choice.

part 2 6d

Racing clubs and the racing media are yet to even come close to smelling the teen spirit. Even those considered young still daub themselves with Old Spice and become more decrepit versions of the original models. So, how can there be change when those waffling about change either don’t know what change is, or are dweebs incapable of change? What’s their strength? Guess.

30jul 10

Horse racing is a business. Running a successful racing club is a business. It’s knowing your product and how to enhance it, and seeing it evolve. This cannot happen through navel gazing and waiting for the fairy godmother to come along and turn a pumpkin into a Lamborghini.

fairy godmother

But seeing some of those given the task of running racing clubs – through a lucky draw?- they certainly seem to be singing “Believe” by Cher. They give the impression that everything will fall into place with the minimum of real work. To them, fairy tales do come true. And by passing the buck while having long lunches and being surrounded by their hand-picked Yes People, they will live happily ever after with what their golden goose has given them- their golden handshakes and golden parachutes. That’s all that matters. Of course, it’s a blatant con. But how many wish to see it when everyone is playing variations of the same game?

part 2 11b

These days a leader like a Chairman or Chief Executive cannot be hired just for their business acumen or because they have a Degree in something or another. How about a Vision? People skills? Creativity? A working and business strategy that is not risk averse. And what about an ability to motivate and get everyone that matters on board? Yes, a personality as well helps in capturing the commitment and support of the many hands that get dirty in making things become a reality. But where it goes horribly wrong is when these independently wealthy and self-made men use something like, let’s say, horse racing, to massage their egos and self-importance and feather their nests with self-serving agendas to add to their business portfolios.

part 2 11c

They collect board positions to add to their social cache and those of their partners. It’s about using racing to expand their business and social networks and flaunt their “board room trophies” in dinner party conversations.

part 2 11d

This is when it’s nothing to do with what they can bring to horse racing. It’s about what they can take and get out of horse racing by seeing opportunities for themselves and bringing those who can help these grow. This is when the genie comes out and muddies the waters forever. A new and unwanted business model has taken over and is protected- a business model that completely ignores the wants and needs of today’s consumers, or else overthinks how to reach these different customer segments to such a pedantic point to show off their text book skills that they’ve lost the plot. And the customer. It all becomes more corporate speak.

part 2 11e

Customers loathe corporate speak. Just ask every big customer-driven industry. Better yet, work with these industries and start to understand real customer engagement and not resort to some meaningless parroting heard by one of those social media agencies that some in racing believe have all the answers. Yes, from a decade ago, you lemmings.

part 2 11f

Racing needs reminding, again and again, how the “old” music industry model self-destructed. Back when the Jewish mafia called the shots, where the street smart young “Urban music” upstarts like Jay Z, Kanye West, Puff Diddy and a host of other “indies” challenged the status quo, rocked the casbah, and changed the model under which the music industry was operating. Here was an industry behind the eight ball and ripe for the picking. And pick it they did, piece by piece. And who’s calling the shots today? No prizes for guessing.

part 2 12

It’s a lesson the Racing industry needs to have tattooed on its torso. Racing the world over is riddled with an executive layer of misfits, who would NEVER land an executive job with a consumer-driven industry or sport. NEVER. At the very best, they would be hired to perform relatively ineffective and inconspicuous and menial tasks. The hirers – the Boards  and their management teams, their human resources cardboard cut-outs, and their Executive Search Agency backups have been getting it wrong for decades. Just like the music industry did, and with dire consequences. Their vision gets starry eyed when they read a CV which is littered with degrees. The more letters you have after your name, the more it demonstrates that you MUST be the right person for the job. Right? Sorry, but the times are not only changing, they’ve changed. And they’re changing everyday because nothing stays the same, especially consumer tastes. They refuse to be spoon-fed the past.

For many racing executives, it’s time to stop being one-dimensional. Get out into the real world. Meet your current and potential customers. LISTEN TO THEM. Try and second guess them and you’ve lost them. Explore the online world. Understand what’s happening and those who changed the world forever and are still making things happen. Why? Think about it.

part 2 13

Isn’t it refreshing and exciting to see an era of entrepreneurs with street smarts taking over and making life more interesting? Is racing capable of identifying talent that can take it into the 21st century and beyond? Ask yourself the question and dare to dream.

part 2 14

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