Night always follows day, and assets always diminish when clubs that should be run as businesses lose money year on end.
It is no different at the Albion Park Harness Racing Club (APHRC).
The APHRC has lost more than $700 000 over the course of six successive years of recorded annual financial losses, and despite the best efforts of financially savvy former club leaders like Kevin Seymour AM to create investment structures that would afford the club ongoing revenue streams, the asset position of the Albion Park club has plunged proportionately to its losses.
The sad and most concerning truth is that in the space of just five years the APHRC’s net basset base has diminished by almost $700 000, or 25%, falling from $2.69 million to $1.9 million.
A temporary asset stabilisation of sorts was reported in the most recent 2018/19 Annual Report issued by the club, but a reasonable assessment of the financial statements contained in the report shows that this had been achieved by the implementation of short-term (desperate?) cost reduction measures that are clearly unsustainable over the longer run.
Here are some examples:
(1) In year 2019 the APHRC promotional budget was slashed by nearly 40%.
At a time when attendance numbers have dwindled away to almost nothing, and new wagering interest has shifted to the greyhound code, how can or will the club be able to attract new patrons to the course, or address the alarming stagnation of betting turnover on the code if they do not spend money on targeted marketing, advertising and promotion?
Advertisements on the low-rating Radio TAB channel don’t and won’t work, for the club is merely pitching its wares to the already converted, and there are few of them listening in any event.
Equally, the club’s large spend on the nationally syndicated Radio 4BC station achieves little if not nothing given that network’s demographics that show listeners aged 65 and over outnumber all other age groups combined by a factor of 3 to 1.
Print media advertising doesn’t work anymore, and Television ads are too expensive and unjustifiable given the meagre returns they provide on investment. Just talk to any corporate bookmaker and you will immediately understand that these are facts.
The reality in the 21st century is that effective marketing and advertising must be predominantly delivered using social media, and that for it to be delivered effectively a marked increase to promotional budgets is necessary, at least in the set-up stages, not a decrease.
All the club is doing here is digging itself a bigger hole.
(2) Racing expenditure was slashed by 16.6% over 4 years
The total racing expenditure by the APHRC in 2015 was $569 294.
Last year the amount spent on racing was reduced to $474 875, despite the club actually conducting more race meetings.
The myriad of issues this spending cut raises are too multiferous to detail in this short article, but probably don’t require a lot of explaining to readers with any knowledge of the sport.
(3) Employee expenses remained stagnant
This means two things.
Firstly, that the current staff are likely not to be receiving fair cost of living increases to maintain the value of their wage and salary packets.
Secondly, that money is not being spent on hiring new staff with vibrant ideas in areas like strategic planning and social media marketing.
It takes money to make money is one of the modern world’s best known dictum. The people running Albion Park ignore it at the club’s peril.
(4) Legal action against Racing Queensland has been abandoned
This is the largest cost reduction measure employed by the Directors of the club, and by far the most concerning, because the legal action was initially taken to secure the APHRC approximately $15 million plus interest in cash and infrastructure spending that the club claims was promised to it by Racing Queensland and its predecessor.
The club saved just over $200 000 in legal expenses by dropping the claim, but it appears to be a very short-sighted and extremely unusual decision given the amounts claimed.
The full reason for the club abandoning the action which for at least 3 years had been fully supported by its current Chairman has never been explained.
Given some of the rumors swirling around about the possible motivations, it needs to be.
Given all of the above, and a number of other cuts to expenditure in areas such as prizemoney contributions, spending on members facilities, and an unexplained $18 000 drop in other expenditure, the single year stabilisation of the asset reserves appears very likely to be a false dawn in the financial future of Albion Park.
The wholesale inability of the current leadership of the club to return annual profits and maintain its asset base over the short to medium term must be addressed my members of the club and the organisations that fund it as a matter of priority.
To ignore the decline is to give up on harness racing altogether.