Cover image courtesy of Bell View Park
Henry Field is absolutely spot on with regard to the increasingly challenging outlook for Australian thoroughbred racing and the risks associated with the revenue pool underwriting the horse breeding and racing industry.
I also agree with his conclusion that the industry must find wider/deeper sources of revenue other than wagering.
The Australian racing and investment markets are somewhat differentiated by historically having large and diverse support from small/retail players.
It therefore suggests that the solutions might be best found in tapping into these market structures , rather than passively shrinking and relying on a few large institutional players.
My suggestion is for a sub-committee of experienced racing industry and investor players to evaluate the entire value chain of the thoroughbred industry and to identify the various asset pools in each activity, their ownership structures, their revenue generation and in particular to evaluate their potential for growing new forms of revenue.
Garry Mackrell | Image courtesy of Commonwealth Bank
The logic for this is as Henry intimates is to evaluate the potential for creation of sovereign/pooled/ETF investment vehicles which would appeal to the broader investor market.
While I profess not to know the intricacies of some of the asset groupings involved, the question is, can asset pools be created which have alternative revenue growth potential to sustain sound overall revenue growth?
Asset groups range from farms and farming activities which underpin the industry, horse stock, race tracks (metropolitan, regional and country), race pavillions, including in particular entertainment facilities.
Can these be utilised in more efficient and effective ways for other things eg most large grandstands lay idle for most of the time as do country race tracks.Who owns them and can they be pooled/utilised more effectively?
In addition to an increasingly self-virtuous social class which sees its mission as curbing/banning other peoples’ enjoyment of horse racing and gambling, there is also the challenge for the industry to attract younger attendees. The latter seem to be more interested in having a good time/social day out than betting.
So, rather than hang on to a slower growing revenue pool from betting, do we fully embrace the fact that we are in the entertainment industry and/or can we use exisiting physical assets for different objectives? Canterbury and Rosehill have been obvious but have lacked a Plan B for industry participants.
Regards Garry Mackrell
Owner Bell View Park Stud
