The ''red hots'' in this state are a basket case. The pacing game might be in terminal decline, but not so the thoroughbred world's Australian Turf Club. Even if it is into the red by near on $50 million. All serviceable, apparently.
The Australian Turf Club formed earlier this year, after the Australian Jockey Club and Sydney Turf Club became one. The premier clubs in NSW united with a $174 million inducement from the state government. The one where the thoroughbreds sold off their share of Tabcorp's cartoon racing - which apparently is a growth area for the TAB. The turf club's Randwick racecourse is set for $150 million of reconstruction. Rosehill racecourse will have $24 million spent on it.
Formed in February, the turf club has incurred operating losses of $9 million, although its chief executive, Darren Pearce, ''wasn't sure where that figure is coming from'' when The Sting asked yesterday. Pearce confirmed a loss but reckons it was all about timing. The merger ushered in the Sydney autumn. You know, the Golden Slipper, the derby, the oaks, the Doncaster Mile, Sydney Cup, etc.
''It was to be expected,'' Pearce reassured. ''Nothing unusual, not crisis time.''
It is all due to entering into ''maximum expenditure time''. Sydney carnival time. The new venture had missed the spring carnival and its multimillion-dollar pay days. It is all factored into the club accounts.
The Sydney Turf Club had $40 million of serviceable debt. It always went to the banks for money to pump into revitalising its course at Rosehill.
''We are in the progress of talking to the banks about long-term debt repayments,'' Pearce said. ''There is about $40 million of debt, tight but serviceable.''
The merger was all about savings and synergies. Staffing, putting in systems that are more cost-efficient. All about scale and getting things right. Pumping money back into racing.
''We are targeting $6 million in savings and synergies in the first year,'' Pearce said. ''We're halfway there - we're working towards the next $3 million.''
Don't forget that impending work to be done at Randwick will have an impact on finance streams. No outside functions to be held at the soon-to-be built site. As Pearce said, ''there are financial implications to that''.
Out at Warwick Farm, land is being sold. It is causing consternation because offcourse trainers are housed in the adjacent precinct, once the domain of the thoroughbred. A huge hardware and gardening centre is on its way.
Pearce reckons the turf club, and the defunct jockey club, has worked closely with trainers out at the Farm for the past 18 months. Unrest is mounting due to the fact the rezoning and development applications are with Liverpool City Council.
''Old news,'' according to Pearce. Cooper's Paddock and 2.8 kilometres of trials and education areas are to be replaced on the polo fields on the far side of Warwick Farm racecourse. All money earned from the sale of land is going into helping out the horse.
''They want a synthetic track,'' Pearce said. ''The whole purpose was to reinvest at Warwick Farm. Set up an excellent training and race centre going forward.''
A bit of pain for long-term gain. Pearce says it is all to be expected. He reckons in ''years to come'' the club ''will get stronger and stronger''.
Those with an investment in thoroughbred racing better hope so.
As for the red hots, it may well need a miracle after the latest scandal involves systematic rorting of swabbing procedures.
It would appear harness racing in this state has been played out on anything but a level playing field. The type most punters demand when investing their hard-earned on a betting option.
Anyone found guilty of rorting the system must be rubbed out of the sport. The sooner the better. Economic pain is everywhere.
cyoung@fairfaxme dia.com.au
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