The economic downturn has given new impetus to an issue that has been in the “too hard” basket for years — the amalgamation of Sydney’s two race clubs, the Australian Jockey Club and the Sydney Turf Club.
The clubs met last week with NSW Racing Minister, Kevin Greene, and have agreed to consider the merger issue again.
This time executives of both the AJC and the STC seem to be singing from the same form guide and have made comments that support amalgamation and highlight its undoubted financial benefits.
The minister is now talking to the Gosford and Wyong race clubs about amalgamation.
The question now is when will Melbourne’s three race clubs — the Victoria Racing Club, Melbourne Racing Club and Moonee Valley Racing Club — address the merger issue?
If economic conditions continue to slide then it won’t be long before the massive operational savings that can be derived from amalgamations prove too powerful for the successful Melbourne clubs. They will have to do what their Sydney counterparts are doing.
The amalgamation of Brisbane’s two race clubs — the Queensland Turf Club and the Brisbane Turf Club — is now well advanced and will come into effect on 1 July.
Rationalisation of the South Australian racing industry will gain momentum this year when the Cheltenham course is closed — with the site being sold to a developer for $85 million. The South Australian Jockey Club has also closed the Victoria Park race track and is constructing a second race track at its Morphettville headquarters where all Adelaide race meetings will be conducted.
The racing industry is under threat from more than just the state of the economy.
Off course commercial betting agencies, and especially online betting operators, are aggressively marketing their services with Centrebet and Sportingbet Australia offering free bets to customers who renew, and to new clients. The part James Packer owned Betfair eve offer a $50 free bet to new customers who signed up during the Australian Tennis Open last week.
The aggressive tactics by online agencies and non-TAB operators are a challenge the bottom line of the TAB operators who are the major source of thoroughbred racing prize money. The two major TAB operators, Tabcorp and Unitab (a division of Tattersalls), have begun their fight back by getting involved in the very commercial betting agencies which they have long opposed!
Achieving an amalgamation of the AJC and the STC won’t be easy — but one consequence would likely be the sale of the Canterbury race course, owned by the STC. Even in tough times, the inner city site is probably worth $250 million.
The pressure from the NSW Racing Minister for the clubs to consider amalgamation might be hard to resist — the damage the economic decline is doing to the finances of even the strongest race clubs will make to almost impossible to do so.