Victorian Cash Won't Go Round

In the following article in today's Australian, Brendan Cormick writes candidly about the prizemoney crisis facing Victorian Racing:-

THE thoroughbred racing industry in Victoria is at risk of being unable to provide a sufficient return to owners, trainers, jockeys and other industry participants and maintain the state-wide infrastructure base.

Racing Victoria chief executive Stephen Allanson yesterday responded to claims by the Victoria Racing Club on Monday that the industry was in great shape, following the release of his body's review.

Allanson challenged the VRC assertion, notwithstanding Victoria's pre-eminent position in the Australian racing industry, saying the risk was highlighted by four key factors:

* A decline in nett returns to owners over the past decade;
* A significant increase in costs associated with the purchase, training and racing of horses;
* Shortfalls in the funding of the true capital needs of the industry;
* And reductions in club profitability, especially in the country where 25 clubs made combined losses in 2005-06 totalling $1.2million.

"The past five years has been highlighted by considerably slower returns to owners' growth than that experienced over the previous five years, whilst costs continue to rise at a a rate faster than inflation and revenue," Allanson said.

"This is a financially precarious position for the entire industry, particularly in the face of increasing competition."

Total revenue to the Victorian thoroughbred industry (clubs and Racing Victoria) is in the order of $300m per annum, of which only $144m (48 per cent) is paid in returns to owners/participants.

Over the past five years, gross returns to owners have grown at the rate of 3.4 per cent per annum while, over the same period, the cost to train and race horses has increased 3 per cent.
"The industry review does not propose revolutionary, but rather an evolutionary change to transform and grow the industry for the next phase. It is a natural progression of the evolution of racing in Victoria that we need a truly independent governance model," Allanson said.