Measuring Your Investment Return
Written By Bruce Teague Thursday 7th February 2013
It is interesting to see Brett Hogan, GRNSW CEO, point out that “only” 37% of its income goes into administration – about half each chargeable to the head office and to clubs. He was reacting to complaints that they were spending too much on office expenses.
Three things about that. First, the figure is a bit higher than it might be were NSW to receive its full share of TAB commissions – that is, 17% or more rather than the fixed 13%. If you divide the expenses into a bigger income then the 37% figure would go down. Second, the bigger the share taken by corporate bookmakers the higher the state’s income will be and the better the expense ratio will look. And the bookies’ share is growing rapidly. Third, costs are one thing but it is more important to see what those costs produced. Did they lead to better or more profitable racing?
I have trouble with the last point. For example, annual reports are full of promises about fresh marketing initiatives but they are mostly accompanied by clauses that mention something is “under way” or will come about in the next six months. But promises don’t count. Bums on seats is the name of the game.
The more vital issue is the 13% of the state’s income spent on “infrastructure”, which means fixing tracks and equipment. A good bit of this goes into needed heavy maintenance but, over time, the big bucks are for building or re-building tracks. The most recent was $0.9 million for a range of jobs at Goulbourn but considerable funds have already gone to The Gardens and, before that to Gosford, Dapto and Richmond and others.
So far as the tracks are concerned that money has been wasted.
The Goulbourn circuit is far from ideal. Indeed, some might say the old grass track was better. Currently, there is regular interference going into the main turn while many dogs run wide on the turn into the straight. Neither helps good punting.
Gosford was totally rebuilt using a design by a Tamworth based engineering firm with no greyhound experience. It now has two good points: the run out of the 515m boxes is fine while the home turn is one of the best contoured efforts available. But the first turn is terrible, resulting in constant disruptions as many dogs fail to handle it neatly. And the 400m start remains on the bend when it could easily have been positioned to allow runners a better look down the back straight.
Dapto and Richmond each soaked up between $0.5 and $1 million but all we got was a repeat of what went before.
Dapto’s first turn remains a disaster while any opportunity to re-arrange the entire layout was ignored. For example, yahoos continue to obstruct views of the 515m start (and the pink runner) when a better solution would have been to shift the entire track to the north by a couple of metres, re-siting access roads on the way. That would have cost more but it would have been more professional.
At Richmond, the flat first turn (535m), which routinely throws dogs off, and the horror bend start for 400m were both retained. Both could have been improved by shifting the 400m start around to vacant space.
Even at the trouble-prone Gardens track, following earlier denials, it took several months before bosses accepted that the 413m start was a danger to all and shifted it around to the current 400m position. Nothing has been done to a messy first turn (515m) or to a home turn where the too-flat gradient also throws dogs off. That’s just bad design.
Then you can add all the cash that went into Bathurst to create a train wreck bend start for its new 450m trip, as well as a smaller amount to “fix” the Maitland first turn (which is now strongly biased). And so it goes on.
On top of all that, we have now been experiencing re-built turns at Wentworth Park for over a decade, only to see dogs fail to handle them well – for either 520m or 720m trips – and cause substantial disruptions.
There and in all the above cases, we are told that the job has been organised by experts, yet if there in one truth in greyhound racing it is that there are no experts in track design. There could not be because no-one has ever bothered to study the subject sufficiently to identify good and bad points. Design is always based on a repeat of what happened last time or on the local boss’s idea of what makes a good track – neither of which is acceptable.
Consequently, the 13% that went into “Infrastructure” in NSW in 2012 – that’s out of $38 million commission income – and all the big investments that went before it have produced little or no return. In the real world, shareholders would not accept that.
The missing link, of course, is that the effectiveness of investments is not being audited. For rail, road or comparable investments the Auditor General does that, but not for racing which the government does not “own” – the people do. No wonder they are complaining.