Q & A with John Anderson

26 June 2008 | Tanya McDermott (courtesy of The Harness Racer)
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John Anderson

John Anderson

 

Q. Lots happening at the moment John, but let’s talk about you firstly and your background in harness racing.
A. I first became an owner in the 1980’s with a close friend of mine. We went into partnership and bought a horse called Spring Vance which won 13 races. In fact, Chris Alford’s first win in a race was on our horse back in 1984. Since then he’s driven over 3500 winners, I’ve had a string of horses, half a dozen or so that have won M0’s, but that’s about as far as we ever got.
Q. And how long in the job now?
A. I’ve been here a bit over four years.
Q. You’ve enjoyed the experience?
A. It’s a great sport. As I said, being an owner for 20-odd years before that, I had a bit of a passion for harness racing as everybody seems to in this industry. So to be in a senior role in the organisation is a privilege.
Q. Has it unfolded as you expected?
A. Pretty much. If anything it’s a lot tougher than I expected. There’s a lot of challenges in the sport where people’s livelihoods depend on what we do, so there’s a lot of expectation associated with the role.
Q. You mentioned challenges. What are some of those specifically, as Chief Executive?
A. It’s a heavy responsibility as CEO trying to meet the expectations of everyone in the industry. You’ve got a lot of demands, from owners, breeders, trainers, drivers, punters, all wanting a fair go. Plus there’s such a lot of competition out there for the wagering and leisure dollar. There are a lot of big challenges at the moment.
Q. What do you consider your major achievements, the big wins so to speak, that you’ve had?
A. There’s been a string of them along the way. We’ve had a few battles on our hands as well. The big issue of the TVN split picture plus we’ve had Equine Influenza to contend with. I think the fact that the industry is able to bounce back after those sorts of adversities is always encouraging. But probably the biggest influence that we’re having on the future of the industry at the moment is the Melton project. It’s a project that’s had to overcome many hurdles to get to where we are today and it’s not far off being a reality which will be a major achievement.
Q. One of the things you mentioned was E.I. Obviously the past 12 months have been pretty difficult. What’s been the impact of E.I., as you see it?
A. It’s often said that New South Wales and Queensland were the “affected States”. I think you can certainly add Victoria to that. We weren’t affected physically by E.I., but financially it cost us about $3 million in revenue this year. Our TAB funding model means half of our revenue is generated from Victorians betting on interstate harness racing. We lost 40 per cent of our business for over three months during E.I., yet in Victoria we were exposed to 100 per cent of costs during that period because we were still racing. Nationwide, I think there was a major social impact in terms of people’s livelihoods being affected and the loss of people to the industry.
Q. If the Government is actually found liable for the E.I. outbreak, is there any opportunity for compensation?
A. We’ve made lengthy submissions to both the Federal and State Governments for assistance. We know that in New South Wales and Queensland they got a massive kick from their Governments because of the way they were affected. We got no financial relief which was disappointing, so the shortfall in revenue is just going to have to be funded from industry reserves.
Q. In the longer term, do you see the E.I. impacts lingering?
A. Hopefully, E.I. will have very little impact long-term. I know that potentially there will be a loss of people to the industry and breeding numbers could be down. But I think once again, the resilience of harness racing people will overcome that sort of adversity. I think it won’t take long and we’ll be back on track.
Q. What have we learnt from the experience?
A. What you learn is to expect the unexpected in some ways. In Victoria, we were well geared for an E.I. outbreak whereas it seems in Queensland and New South Wales, they weren’t. We know in Victoria through an industry program called Operation Pegasus that if such an outbreak had happened here, we would have pounced on it very quickly and it wouldn’t have spread as it did within that first 24 hours in New South Wales. Specifically to E.I., we were well prepared but unfortunately we copped the backlash from what happened in New South Wales and Queensland.
Q. Moving our focus slightly to wagering and gaming now. TAB turnover, that’s been affected by E.I?
A. It was massively affected through the latter part of 2007. Since we have returned to a full racing calendar wagering has been very flat across all codes. There are a number of factors in that. We returned to full racing just as the economic climate changed, the price of petrol, interest rates rising etc, meaning discretionary spend seems to have been affected. Aside from the economic factors, we’re finding that the impact of revenue leakage outside the traditional form of TAB wagering is increasing at an alarming rate.
Q. What do you mean by revenue leakage?
A. There is an enormous shift by punters who have bet with the TAB towards corporate bookmakers who are licensed in the Northern Territory. Our information is that total wagering invested in the Northern Territory has increased by 50 per cent over the past 12 months, despite E.I., and will amount to $4 billion for the year. For the most part this is money lost to the harness racing industry. As a result this severely impacts on the amount of money we are able to return to the industry via prizemoney.
Q. What do you think is the appeal?
A. The appeal of the corporate bookmaker is their ability to offer a much more competitive price. They can do this because they do not pay the harness racing industry for our product, vision or audio. Tabcorp pay heavily through taxes for the exclusive parimutuel wagering license, from which they fund the racing industry. They also provide the picture through Sky Channel and contribute substantially to the audio and newspaper rights so there’s further expenses.
I’ll give you an example – there’s roughly $500 million turnover annually on Victorian harness racing. Harness Racing Victoria, from that, receives $50 million. So for every dollar invested on harness racing, there’s 10 cents returned to the business. Corporate bookmakers don’t pay anything to the harness racing industry, nor do they pay the same level of taxation as Victorian operators. Therefore, they tend to be able to offer a more attractive price.
Q. What can HRV do to turn that around though?
A. Well, all we can do is keep alerting the Government to the fact that it’s their responsibility to enforce legislation prohibiting the bookmakers from using our race fields without our approval. We will give them approval providing they can satisfy integrity standards and agree to pat what we believe is a fair and reasonable amount for that privilege. To this time, we haven’t received a cent from a corporate bookmaker, or Betfair for that matter, for using our product, vision and audio.
Q. So for industry diehards, it’s really important to support traditional betting outlets?
A. We are aware that Tabcorp has to reach higher service levels to satisfy its customers but in terms of financing the industry, that is where we finance our stakemoney from. The future funding growth for participants in harness racing is dependent on the performance of Tabcorp. It is as simple as this, betting with a corporate bookmaker costs the industry money and thus it effects our ability to increase prizemoney.
And of course there’s the on-course bookmakers too. I feel for them, the few that we have left who have to travel to the meetings and brave the cold and the wet, and pay us our one percent of turnover – which they do. Yet these corporates don’t contribute to the industry at all.
Q. HRV doesn’t have any deals with corporate bookmakers?
A. We’ve tried to. We’ve put some financial deals to them but to this point in time we haven’t received any money from them at all. We are actually being sued by Sportsbet even though they haven’t paid us a cent.
Q. Back to Tabcorp now, which is obviously a very important part of industry. The Government recently announced that Tabcorp’s gaming licence would not be renewed beyond 2012. How does that impact on HRV?
A. Too early to tell at this stage. All we can go on is what we’ve been told by the Government which is that the racing industry will not be worse off. We lose our 25 percent of Tabcorp’s gaming profit which came to the racing industry – which for harness racing is about $12 million per year – but the Government has said that it will substitute that with a higher return from the new wagering licence. The post-2012 scenario is very much up in the air and the racing industry has a two or three-month window of opportunity to lobby Government as to what’s in its best long term interests.
Q. Did that decision come as a surprise?
A. Totally. A far bigger surprise to Tabcorp and Tatts, but certainly the racing industry did not expect what was announced on April 10.
Q. So will the changes be positive or negative for HRV, bearing in mind that it also owns one and will soon have two gaming venues?
A. At this point in time we are uncertain. There is potential for us to generate higher returns as a result of owning our machines, but until we get clearer direction from the Government on the bidding and licensing process it is difficult to say.
Q. Even more importantly than the gaming licence, Tabcorp’s wagering licence is currently up for review post 2012. What’s the story there?
A. The wagering licence renewal will be via a tender process commencing later this year. What we know is that there will be one exclusive parimutuel operator and it won’t be the racing industry. We hope it is a very competitive bid process. I can’t comment on the likelihood of Tabcorp retaining the licence, however the racing industry has a three month window to consult with Government on its needs post 2012. During that process we will be seeking clarity on the ‘no less favourable’ provision.
Q. Tabcorp has also signed a multi-million dollar sponsorship at the new Melton Complex. Is that going to be affected?
A. No. This money is in the bank for the Melton Complex. There’ll be some announcements regarding the naming rights to the Melton venue in the coming months, but Tabcorp will certainly have a major influence over Melton for the next few years.
Q. Speaking of Melton, how’s it going and are we on target for our opening?
A. The complex is coming along really well. For those who drive along the Western Highway, they’ll see that construction is well and truly advanced. It’s very exciting. We expect the construction work to be finished by the end of this year. We’re planning to open the commercial facilities by February or March at the latest in 2009 and racing will commence in July, 2009.
Q. What’s Melton going to mean to the industry?
A. It’s going to have an enormous impact on the future of harness racing in Victoria. We believe it will increase interest in harness racing and it will generate a significant cash flow for the industry. What also can’t be underestimated is the cost saving for industry participants. We have a concentration of harness people around the Melton, Bacchus Marsh, Ballarat area and racing more often at Melton is going to be a plus from that point of view.
Q. The commercial facilities compared to racing. Is one more significant than the other?
A. It is going to be our metropolitan racing home, but the financial returns to the industry will be generated by the seven-day-a-week operation. The facilities will include gaming rooms, bars, bistros, function rooms and a 41-room hotel that will operate seven-days a week and be a landmark building in Melton, all for the benefit of harness racing.
Q. How often are we going to race at Melton when it first opens and then, moving forward, what are the plans?
A. In the first year we’ll tread warily and probably have 26 race meetings and up to 26 trials meetings. Certainly by year two we’ll be racing there at least once a week. One of the problems with Moonee Valley is that we don’t have a specific metropolitan night, so I think we’ll pick the same night for racing at Melton every week.
Q. The 1040-metre track. There’s been so much discussion – in fact you’re probably sick of hearing about it now – but can you just reiterate again the rationale behind that decision?
A. Look, there were a number of reasons why, not the least being that we think the track at Melton will be an outstanding racetrack. It will be fair, it will be fast, and the on-course experience and vision will be excellent. We have the new track at Bendigo which opened last year and we think that’s an outstanding track. It is 1000 metres and the design of Melton is similar to Bendigo except we will have 20 metres extra on both straights. I think we’re going to have a track that, in the long term, will be the best in Australia.
We understand the argument about Menangle and 1400 metres, and we’re very hopeful that Menangle is successful because we really need harness racing in New South Wales to get a boost. But we’re also very fortunate here in Victoria to have 13 or 14 1000-metre tracks now. I hear a lot about 1400-metre tracks with regard to world’s best practice. I’ve been to the States recently and the last four tracks they’ve built in America have been 1000-metres because the belief over there is that it is the ideal harness racing track distance as long as it is properly designed. I’m not convinced either that 1400 metres leads to more exciting racing, which is paramount to the growth of interest and investment in the sport. So we’re very comfortable from a racing point of view and certainly from a business case the 1040-metre track’s return on investment is far superior to 1400 (metres).
Q. There’s also some HRV land next to the complex at Melton as well which has been earmarked for development. When’s that going to happen and what are the plans?
A. Yes, we own another 60 or 70 hectares adjacent to the racing complex and we’re going through an expression of interest phase at present. We may enter into a joint venture with a developer, but what type of development will depend on what gives the best return for the industry. Again, it’s an exciting project in terms of revenue earning potential for the industry outside the traditional means.
Q. And what about the facilities at Melton, from a racing and on-course patrons’ perspective?
A. It will be an outstanding boutique venue which will cater for the expected weekly crowds. As I said, from a financial point of view, the seven-day-a-week operation is important but it will be multi purpose in the sense that it will also have excellent raceday facilities. I think the capacity will be about 2500. That’s a number we hope to achieve regularly and the atmosphere for harness racing will be terrific. It’s important to note also that there’s provision for another tier to be built on to the complex so that features such as the Victoria and Hunter Cups can eventually be staged there.
Q. Will there be training facilities?
A. No. It will be purely a racing venue. But we have a long-term view that the track at Bacchus Marsh should become a satellite training facility for participants in the area. We are working on a master plan with the local Council at the moment for the Bacchus Marsh complex to become a major asset for the industry.
Q. It’s one of the real challenges young trainers in our industry face, trying to get a start. I gather the Board has a strategy and is keen to support them?
A. Absolutely. We’ve got some very good young people in our business which is really encouraging but more and more into the future we need to have an entry point, particularly for young trainers to get involved. I think a training facility like the one that we’re planning at Bacchus Marsh will become increasingly important.
Q. Moonee Valley, what’s the future for it?
A. We’re currently in discussions with the committee regarding our obligations at Moonee Valley. We won’t move away from Moonee Valley entirely. Our preferred option is to race less at Moonee Valley, perhaps have a monthly feature meeting, but again we’re only in the early days of discussions. We’ve got a contract to race there 52 times a year. How we structure that is to be determined because we have the flexibility to race any day or night. I think the long-term future of Moonee Valley generally has got to be in question. It’s the thoroughbreds’ equivalent of Harold Park. That is why we are fortunate to have Melton.
Q. Stakes and racing, they’re two items which always sit at the top of the agenda. The biggest complaint I imagine you receive is that stakes need to be higher?
A. Everyone wants more security. When we talk about stakes, we’re talking about returns to all of our groups. Breeders want better prices at the yearling sales, owners want higher prizemoney, drivers want increased driving fees, etc etc. There’s continual pressure to increase all returns. The key to all that is people wagering on our product with the TAB and the simple message is that we have to provide a better product which encourages people to bet on harness racing.
Q. How does Victoria stack up against the other States?
A. From a stake money point of view, we’re clearly the highest. I think our stake money next year will be around about $34 million which is six or seven million higher than any other State in Australia. A clear strategy of the Board is to focus on increasing returns to our people.
Q. There’s a lot of talk about the stakes in Western Australia. They’re quite high.
A. Well they are for their weekly metropolitan meeting, slightly higher than ours. But Western Australia has four or five TAB race meetings a week and we have 10. So by way of comparison, we pay stakes of $34 million and I think WA last year paid slightly less than $20 million. We spread our stakes around a lot further and I’m very comfortable with where we position ourselves.
Q. Is there any concern about the number of Victorian horses going across to WA to race?
A. No, not at all. It’s a positive in some ways. If an owner here can get a good price for their horse, we’ve seen that they’ll reinvest that money back into the business in Victoria.
Q. The increase of the base minimum stake in Victoria to $5000 in April was a positive initiative wasn’t it?
A. The Board is very conscious of the bottom line and having a $5000 country minimum is very attractive to our participants right across the State. We’re very much a regional sport and getting to $5000 was a targeted milestone. I think we’ll also look to focus more of our stake money towards the juvenile racing as time goes on.
Q. Metropolitan stakes were cut to $14,000 as a result of E.I. Can we expect those to increase?
A. Yes, I think we’ll get those back to where they were pre-E.I too. We will probably leave the $2000 meetings where they are. It’s one of the phenomenons of harness racing really, the number of nominations we get for those $2000 restricted meetings is just exceptional. People are voting with their nominations and they’re telling us that they want more of these meetings.
Q. It’s an interesting turnaround isn’t it, considering there was some resistance when they were introduced.
A. Absolutely, but there’s a market for them. Whether it’s people getting them ready for other races or they don’t want to suffer a country penalty or whatever the reason is, but we find consistently we have 140 or 150 nominations for our restricted meetings which is far in excess of our standard meetings.
Q. Inter Dominion now. Was ID08 successful?
A. Yes. The way the HRV Board saw it, the Inter Dominion was just about dead and buried. There were a lot of dooms dayers out there saying it was finished as a major attraction for the industry. I think what happened with ID08 has put the Inter Dominion very much back on the agenda. Despite the issues we had with E.I. and the travel restrictions, the Inter Dominion is back in the spotlight.
It’d also just like to take this chance to compliment the HRV staff who were involved in the promotion of the Inter Dominion, the quarantine exercise that enabled the winner and runner-up to get into Victoria and the retention facility. The commitment of the HRV staff as always was outstanding.
Q. On to Brisbane next year and there are some changes afoot I believe?
A. Yes. I thought we had a commitment from Brisbane and Sydney that we’d run the same format over the next three years but I see that the participants seem to be running Albion Park at the moment so there looks like there’ll be some changes to the Inter Dominion in 2009.
Q. Breeders Crown is fast approaching. You must be really proud of how it’s evolved.
A. It’s a great credit to many people and I think it’s the future of our sport. The Breeders Crown is something that over time will probably surpass the Inter Dominion and we have the event here in Victoria every year . It’s in our interests to promote young horses that attract new people to the business so it’s just an extraordinary event. The next stage of the Breeders Crown will be the introduction of the four-year-old series next year and the plan is that by 2011 the day will feature 10 or 11 Group One races.
Q. Vicbred has been another success story, very much a key platform for Victoria, South Australia and Tasmania in recent years. Did you anticipate it would be such a winner?
A. It is a scheme envied around Australia and from the breeding and ownership perspective, it works really well because it’s simple. People understand it – the win and breeder bonuses are always sought after. It creates good returns all round for our local breeding industry. HRV invests over $5 million a year into Vicbred and that commitment will only continue to grow.
Q. What are the plans for the future, is it possible to build on Vicbred?
A. It’s reviewed regularly. It’s a scheme that underpins harness racing in Victoria so we need to continually update it. For example, one of the suggestions we are reviewing is to increase the prizemoney for the Vicbred Super Series heats and finals. It’s something that’s been constant for a few years so certainly the Board is having a good look at it.
Q. Racehorse population is something that’s been discussed a lot recently. How are we looking in Victoria, and nationally?
A. I think we’re going okay. In Victoria we’ve got 500 race meetings to fill each year so we need to continue focussing our energies on things like the APG Series, the Breeders Crown and Vicbred, so the incentive is there to breed and buy horses. Our Vicbred breeder bonus is now 10 per cent which provides a terrific opportunity for breeders to earn good money long after they’ve sold a horse.
Q. Changing tact again slightly. The Hunter Cup has moved back to a Saturday night and the Nights Of Glory have been reintroduced. The rationale there?
A. We trialled the Hunter Cup for three years on a Sunday afternoon and our analysis showed that it wasn’t as successful as what we’d hoped. Sunday afternoons on the Sky schedule are very crammed thus lessening our exposure and the crowds attending didn’t grow. The feedback the Board has taken is that the strength of the harness racing carnivals in Melbourne is the night timeslot so we’re back to a Saturday night.
We’re excited to have the Nights Of Glory back again, incorporating the Ballarat Cup for the first time. The strength of harness racing is in our regional areas and Ballarat Cup night, with the Derby heats, Inter Dominion trotters’ semis and the Cup will now be an integral part of the carnival.
Q. There’s no change to the placement of Victoria Cup Carnival in December though. That move has proven a positive one.
A. With the support of Rob Merola and SEW-Eurodrive, the Carnival has grown every year in that pre-Christmas timeslot. Indeed, there are lots of plusses with running the event in December. There’s a large captive market for dining and group bookings, there’s limited competition for editorial space in the media and it fits nicely into the national feature race calendar.
Q. V3 is an issue that always seems to bubble away. HRV copped considerable criticism when the plan was announced three years ago. Looking back, has it been successful?
A. Well, I wouldn’t say we copped plenty of criticism. I think we got good support for the plan from the majority, but we understand where the criticism came from and why people were upset about it. For the most part, the clubs have moved on really well. The recent Boort Cup meeting at Bendigo is a good example. It was a tremendous event with terrific turnover and a great success for the club. More people seemed to be at the Boort Cup at Bendigo than the Victoria Oaks there. That was indicative of most clubs that have moved on and are putting their energy into promoting their major events at bigger and better venues.
Q. What about the V3 clubs and the future?
A. As I said, most of them have moved on and I would say the positioning of those clubs is a lot stronger than what it was three or four years ago. The clubs that have embraced the change and moved to bigger and better venues such as Shepparton, Bendigo, Maryborough, Mildura, have all had very positive experiences.
Q. And there was always that fear about loss of identity and it hasn’t really occurred.
A. Those who have worked hard to maintain their identity have been successful, and they have seen some good financial benefits as well.
Q. You conducted a feasibility study into racing in the north-east region of the State as well. What was the outcome?
A. It showed that we don’t have the horse population or an industry that supports racing in Wodonga or Wangaratta, but we have seen a tremendous migration of participants into the Goulburn Valley region over the past year or so which is very encouraging. The Shepparton track services that area exceptionally well.
Q. And Cobram will shortly undergo an upgrade which will be complimentary.
A. Yes, that’s not far away. The plan for the next 12 months in terms of track upgrades is for Cobram and Cranbourne to have work done on their turns. Both those tracks are already 1000-metres but require improvements to their camber so they are the two track projects planned in the coming year.
Q. What about the Sunraysia region. There’s been some talk about Nyah relocating to Swan Hill and also some concerns about Mildura. What’s the state of play there?
A. We’re supporting a move by Nyah to Swan Hill, but it requires Government support. It’s something we hope will happen in the next two to three years. We’ll have more to say about that down the track.
Mildura is a concern. The Council has advised that we will have to relocate from 2012. We can’t afford to relocate to a new site because it would cost $10-$12 million so if the Council’s view doesn’t change then harness racing will cease in Mildura in 2012. We hope that the Council will reconsider and we are in regular consultation with them about it.
Q. Ararat and Stawell as well, there was a proposal to merge the two clubs. Where is it at?
A. The two clubs have to get themselves together to merge. We’re not going to force the merge. We’re disappointed in the progress in that area to date and I think it’s fair to say that if nothing happens in the near future then HRV will have to make its own decision in that area.
Q. Some hot topics in harness racing John. Sprint lanes, are you for or against them?
A. For.
Q. Standing starts?
A. For.
Q. Driver colors?
A. For.
Q. Shorter races?
A. For.
Q. Starter subsidies?
A. Against.
Q. What’s your issue there?
A. I personally have a philosophical problem with paying down to last. I think people buy horses to win races and our focus should be on distributing money accordingly. That said, in consultation with the industry, we have introduced the payment of prizemoney to fifth placegetters in the past 12 months and this has been well received.
Q. The new horse movement policy has also generated some debate. Why was it introduced and is it here to stay?
A. It is critical that we comply with the OH&S Act of 2004 as the industry is exposed to severe penalties for any breaches. In consultation with our kindred bodies we have developed a horse movement policy that must be enforced. HRV has gone to great lengths to communicate the importance of the policy and for the most part I am pleased to say that the industry has accepted the procedures. I am disappointed in the actions of a minority of licensees though who see themselves above the law. Club officials and staff should not tolerate the treatment they are receiving from certain participants and I have directed the stewards to enforce non-compliance. In short, the policy is here to stay.
Q. We’re all committed to the long-term future of harness racing but what practical things can industry participants do to help?
A. The future of harness racing in Australia really, not just in Victoria, is contingent on the quality of product that we put on the track and what people see on television. The time is going to come because of the way that harness racing is funded that we have to make our product more exciting and attract a younger crowd. We have to run shorter races, for example I don’t think we can have races where they go around three times. Increasing market share is critical to our future and our Sky coverage must be attractive and engaging to the audience for this to occur. There will have to be change. This is an industry resistant to change but our long term survival is dependent on it.

 

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