Why aren't owners revolting over $4,500 races in Vic

[Theoldfox]

unfortunately the wrong type of increase....

I think they are on the increase as there are another 3 at Shep tonight

https://www.harness.org.au/racing/fi...s/?mc=SP170822

[aussiebreno]

Between Kilmore and Shep there was 7 $4500 races out of 19 races.

The three lowest turnover races of all 19 races were $4500 races.

5 of the lowest 8 turnover races were $4500 races. A 2yo and a Trot race with $1.55 and $1.35 faves are in those 8. So just one ordinary $7000 race made the bottom 8.

Low sample size but I think it paints a pretty clear picture punters don't want to bet on plodders (for want of a better term).

I think by having plodders race for $4500 HRV have met the middle ground between juggling current turnover/income and trying to keep non-winning participants engaged for longer.

Of course thats not to say $4500 prizemoney is good. Would love bottom tier prizemoney to be say $20000 but we need to be realistic with what goal posts HRV are working with in regards to income and budget.

[Messenger]

I know it is not the start of a new racing season anymore but it is the start of a new weather season so it is as good a time as any to start a count on just how many $4,500 races are being foisted on us
My intention is to keep the count to draw attention to what extent HRV is undermining the industry's standard of living

01/09/22 - 4/9

[aussiebreno]

I know it is not the start of a new racing season anymore but it is the start of a new weather season so it is as good a time as any to start a count on just how many $4,500 races are being foisted on us
My intention is to keep the count to draw attention to what extent HRV is undermining the industry's standard of living

01/09/22 - 4/9

To what extent do these poor turnover races with poor performing horses undermine well performing horses earnings/owners standard of living for those that bring in their fair share of turnover but are taking reduced prizemoney to subsidise non performers? Always two ways to look at things.

Quick look at their 2021 financials. Extra $10M revenue from 2020. $5M went towards stakemoney and $5M went towards arresting a Net Current Asset position of around negative $15M. Not sure what else the current admin are supposed to do? Long term for the industry its important to have a better liquidity position, would undermine the industry a lot more if it was allowed to continue sliding.

[Messenger]

The $4,500 races were brought in because we were supposedly broke and needed to balance the books
With our improved financials I believe in sharing the spoils.
Like I said - you don't have them in NSW
If a horse is putting on the show - say in a leg of the Quaddie, it should be in the running for a decent collect
We obviously need the numbers to have enough racing product, why is it Vic risks pissing them off

I think we will find that some of our very biggest races are subsidized and don't actually pay their way

ps Your very small sample size last time Brendan was not proof - if you want to do it again for September+, that would be good
Of course there will always be the other factors such as what race (number) they are etc etc

[aussiebreno]

The $4,500 races were brought in because we were supposedly broke and needed to balance the books
With our improved financials I believe in sharing the spoils.
Like I said - you don't have them in NSW
If a horse is putting on the show - say in a leg of the Quaddie, it should be in the running for a decent collect
We obviously need the numbers to have enough racing product, why is it Vic risks pissing them off

I think we will find that some of our very biggest races are subsidized and don't actually pay their way

ps Your very small sample size last time Brendan was not proof - if you want to do it again for September+, that would be good
Of course there will always be the other factors such as what race (number) they are etc etc

With net current assets still at negative $12M (at 30 June 2021) there is still a long way to go for the industry. Whilst there is other factors to consider textbooks will tell you the benchmark ratio should be $1.5-$2 current assets to $1 of current liabilities. HRV is at around $0.5. That is a long way to go (around 5 years if trading is consistent with 2021). If you had $1000 in the bank and $2000 worth of bills to pay I don’t think you’d be volunteering to up your spending.

While they could refinance some cash on the Melton land value to fix this, that’s just a stopgap solution and doesn’t change the fact that from industry operations the figures are bleak. You can run a two speed business successfully, by that I mean where the trading breaks even and the cash flow is just reliant on capital asset growth, but that’s not the right attitude. The attitude needs to be to have the industry profitable and generating cash flow on its own two feet, not just because of Austs property bubble.

The three avenues to generate cash flow (or minimise cash outflow):
1. The most important but also the hardest to do as harness fans dwindle is increase income. They have achieved this though.
2. Cut prizemoney. They have done this including cutting big races like Vic Cup significantly. Cutting on a handful of races doesn’t have the same impact as cutting on races that are run 365 days of the year.
3. Cut other expenses. They have done this.

I’m really not sure what else the current admin can do. There isn’t a magic money tree that keeps prizemoney levels ticking along to meet CPI at the same time as interest in harness racing declines rapidly as it has done for the past 30 years. Sure try harder to arrest the dwindling interest but they would need to be successful in that first over a sustained period of time before significantly changing prizemoney levels. Pinning the last 30 years of decline onto the decision to cut prizemoney made by the current admin is just emotive rubbish.

It doesn’t matter what HRNSW are doing. What someone else is doing isn’t the marker of whats right or wrong. Racing NSW are making up new multi-million dollar events yearly, does that mean HRV should be doing that as well just because that’s what someone else is doing?

Whether its slicing the pie differently so these $4500 races are worth a bit more and the other races go down the net result is still that prizemoney needs to be cut and there is less pie to go around. I really don’t see how any solution to the finances doesn’t involve having less pie available for total prizemoney. At some point the increase in land value could be utilised but that should be for capital or financial investment.

What is your solution? I don’t think I’ve seen any ideas on this forum in the past 10 years that would generate an extra $10M annually in income which would sustain the $4500 races being at normal levels while still cutting into the current asset position. I don’t think any of us are close enough to operations to make a very decisive call on cutting other expenses (maybe theres a few glaring ones I’m not sure). I don’t think we should be utilising the capital growth in Melton to fund prizemoney (earnings on investment could go towards it though but this would be limited and unpredictable). Or just put the $4500 races up and be damned about the liquidity position, opening self up if you were to experience 2x years of 5% declining income and the industry is on its knees. There just has to be prizemoney cuts somewhere, evil position to have to pick where from because nobody will be happy with wherever the prizemoney is taken from.

Also yes biggest races are probably subsidized. Moreso talking about the ordinary races for N50+ horses.

[Messenger]

Simple - nearly every meeting is ripping off some to give extra to others
Nearly every meet with $4,500 races have $8k, $9k or $10k races
I don't look at NSW that much but I don't think that is the norm there - all the races at meets are for the same
Make it the same in Vic - every race in Vic $7k before any are for more

[Messenger]

I should address your listing of
1. The most important but also the hardest to do as harness fans dwindle is increase income. They have achieved this though.
As if it was an achievement

Harness fans dwindling has been on their watch
Their decisions have cost us dearly
Nobody knows we exist

The lack of promotion is just about harness's greatest crime
As you know, businesses often run at a loss for years while trying to gain market share - market share is everything. Eg public company Pointsbet announcing a $250m+ loss again this week as they concentrate on gaining traction in the USA. Sure we are not a listed co with ways of raising capital like them BUT market share is what it is all about.
Ministers, Chairmen, Boards, CEO's have failed to show urgency or find the right people to have a real dip

It is not this fan forum's responsibility to come up with the ideas but plenty have given it a go.
There are many threads for you to read Brendan

The only things I can think of that the authorities have done that has in any way been innovative are
The French experiment and Trots Vision

Having control of our product and selling it overseas are still IMO integral to our future but I am not sure HRV are going to make it happen

[aussiebreno]

That's just robbing Peter to pay Paul. That is admittance there needs to be cuts so its a decision towards cutting the non-performers, or cutting the performers prizemoney. As a horse goes from N50 to N80 why should they forego $20K+ prizemoney to subsidize non-performers? Sure be in one camp and prefer one option of cutting prizemoney over another, but its hardly this hangable offence this thread makes it out to be. In NSW so many of these under N50 races are made up of horses who have already had their turn of winning a few races anyway and the same was the case for the winners of the $4500 races at Horsham and Ballarat the past 2 days. Why are horses who have had their turn getting extra (under $7k flat model) when horses making their way haven't even had their first slice of the pie yet. I certainly wouldn't expect a reserve grade footballer to get the same as a first grader, or a top performer at work to get the same as a poor performer.

Pointsbet have a successful product (gambling) and there is a big existing market they could steal. Harness racing as a product is inferior to the general public. Track size, track location, marketing etc isn't going to make standies run faster than throughbreds. TV and Internet etc rule out for younger generations. Peoples wages have gone backwards compared to COL so have less disposable income to spend on hobbies. Just pointing out how hard it is, not saying its the forums responsiblity.

Pointsbet also have capital investors to pool funds from. To do some mass campaign using excess capital HRV would need working capital from having its balance sheet position completely reversed and having surplus current assets.

The past decline in revenue and reasons for such is irrelevant to evaluating this decision. Whats happened in the past is unable to be changed and was different people in charge. Any recent initiative would only be in the early stages and wouldn't have had time to generate cash where prizemoney could be lifted across the board either.

[Messenger]

You have got that completely wrong Breno

EVERYBODY USED TO RACE FOR THE SAME AND STILL DO IN NSW BUT THEY DECIDED TO ROB SOME PETERS TO PAY PAUL IN VIC

Now when I say it is time to go back to the way it was eg All racing for $7k not some for $4.5k and some for $8k or $9k, you say I am robbing them LOL

Owners, breeders, trainers are not happy about it - I can see you have never been a reader of the Australian Harness Racing Industry facebook page

Let's imagine you are a Carlton member and all members used to get a pie and coke when they came to games, now half don't get anything but half get chicken and champagne

You asked what should have been done so don't go labelling the answer emotive rubbish. The administrators should have done better/not stuffed up and necessitated Vic having to cop this

Then you wouldn't be writing rubbish like:
Harness racing as a product is inferior to the general public. Track size, track location, marketing etc isn't going to make standies run faster than throughbreds.

Harness racing was not inferior and we do not want 'standies running faster' - we want to take back some market share (from the Dogs actually)
It is still the premier code in many European countries and they could be a template for improvement

I often think we are fighting a losing battle - you seem to have given up
All this is an aside from how prizemoney is distributed at meetings
You are a New South Welshman who likes the Vic model
I am a Victorian who likes the NSW model

Maybe some of our difference is ideological and we may have to beg to differ
You do not see it as a hangable offence but it is a pretty big - well small deal really ($4,500 is a 36% wage cut)