For this article, I have examined recently released South Australian figures available from the Annual Online Industry Statistics page, which is part of the HRA website. This exercise was not as easy as it could have been, because HRA release the data in a format that does not enable copying and pasting. Consequently, I had to manually enter all data myself. Let’s hope that HRA address this short-coming, which should be relatively straightforward to address without any risks to the integrity of the released data.
For this analysis, I entered industry data for the following measures from 2006/07 to 2015/16, so that comparison and trends by year are apparent:
- Number of SA drivers and trainers by season,
- Number of local services, foals born, and local horses named by season,
- Number of SA meetings, races and prizemoney by season,
- Number of 2 and 3 year old races and 2 and 3 year old stakes.
National statistics from the Australian Bureau of Statistics on the consumer price index (CPI) were also used to assist with analysis of figures, where appropriate.
Drivers and trainers 2006/07 to 2015/16 season
In order to ensure a healthy number of horses competing in races, there must be sufficient numbers of both trainers and drivers, otherwise they will be at capacity and unable to service demand. The graph below shows the total number of SA drivers and trainers from the 2006/07 season to the 2015/16 season. Clearly, there have been significant reductions in both groups here in SA.
I have attempted to ‘smooth out’ variations using trend lines across 3 data points. The dashed trend line for drivers starts above 2008/09 because it is an average of the total number of drivers for 2006/07, 2007/08 and 2008/09 seasons, and so on. Smoothing the data can facilitate interpretation and identify emerging trends in the data.
In the space of 10 years there has been a 35% drop in the number of drivers and 29% drop in the number of trainers, with the trend lines showing that these reductions have picked up pace particularly since the 2010/11 season. For numbers to be sustained, the number of new entrants must match numbers that leave – that clearly has not been occurring in SA for the past 5 or more years.
In order to understand the reasons for the drop in driver and trainers, requires further interrogation of the data. In particular, the ages of those entering the sport, and ages of those currently in the sport. If SA participants in harness racing are predominantly ‘aged’ then this could pose significant challenges as they ‘age out’ and retire. Retirements should be possible to predict based on the age profile of those currently driving and training.
Other data to support better interpretation and understanding of trainers and drivers should include other key characteristics of those entering and leaving the sport in SA, including loss due to injury, loss/gain due to interstate movement, and characteristics of hobbyists (who may be more prone to financial challenges) versus professional drivers/trainers. Key variables associated with those who have recently come into the sport could be integral to understanding how to increase the chances of others becoming involved.
South Australian stallion services, foals born and horses named
The graph below displays total number of stallion services, foals born and horses named in SA. Since 2006/07, the number of services to local stallions standing in SA, and horses named have, each dropped by 35%. The number of foals born has decreased by 28%. However, since 2012/13 an increasing number of mares (ie about half of those that produced a foal the next season) were served to local stallions standing in SA.
The trend line shows the 3 period moving average for number of horses named. The trend line shows that the number of horses named appears to have stabilised in the last couple of years. This could be because owners are bringing horses to SA from interstate/overseas. We must be mindful that foal numbers nationally have been in decline for some time, which will have to impact on the numbers of horses named over time.
Number of SA meetings and races, and average prize money per race.
The display titled, ‘SA Meetings, Races and Average Prizemoney’ shows the decrease in the number of SA meetings (8% less) and races (16% less) since 2006/07. This data is represented by the vertical bars. These figures make sense given a 35% drop in the number of horses named over the same period.
The dotted line graph shows the average prize money per race, and needs to be interpreted using the y axis on the right hand side. Note also that the dollar figures need to be multiplied by $1000. In other words the $4.50 at the top of the y axis, actually represent $4500 per race.
The line graph shows that the average dollar amount per race has increased over time –by around 20%. However, the graph does not account for expenses over time. That is: $1 today buys less than $1 in 2006/07. The graph below accounts for inflation using the consumer price index (CPI) measure, which was obtained from the Australian Bureau of Statistics.
The display titled ‘Average $ Per Race & Changes to CPI’ shows that in 2006/07 the average stakes per race was $3300, but CPI increased by 2.1% over the year or $70. The actual average race stakes in SA in 2007/08 was $2990, but it should have increased to $3400 in order to be en par with the rate of inflation.
CPI has increased 23.7% since 2006/07! In 2015/16, the average SA stakes per race was $3990, which was at least $100 less than it should have been to account for the effect of inflation. In other words, in 2015/16 the average per race should have been around $4100 in order to be en par with 2006/07 prize money levels.
What this means is that prize money every year since the baseline year displayed (ie 2006/07) has essentially decreased when taking into rising costs and CPI. The implications for the industry are obvious. The sport has become more costly, with less returns.
Costs are passed down the line to owners, which impacts on the affordability of racing. Given these findings, it is no surprise that the total number of horses bred has dipped sharply, as some will be unable to afford the increasing costs. I also expect that there will be fewer hobbyists at all levels of the sport, as they will be at higher risk caused by the increasing costs.
The industry must account and plan for the impacts that additional expenses will have across all levels of the sport. For example, the importance of syndication to make ownership more affordable, and mutually beneficial partnerships to spread costs (eg partnership between breakers, trainers, drivers), could be important to increase affordability and efficiency of professionals and hobbyists.
Racing of Two and Three Year Olds in SA
One way of getting returns earlier to owners can occur through racing younger horses. The graph below compares the number of races for 2 and 3 year old horses and average stakes per race. The display shows that the number of races for 2 year olds has dropped by about 19% since 2006/07 levels, though number of races for 2 yo horses in SA appears to have stabilised since 2011/12. The number of races for 3 yo horses declined in 2015/16 compared to previous years.
Average stakes per race for 2 year olds has increased 32% from $5240 per race in 2006/07 to $6910 in 2015/16, which is well above the 23.7 % CPI change over the 10 year period. Average stakes per race for 3 year olds in 2006/07 was $4370 per race, and was $5550 per race (27% higher) in 2015/16.
Conclusion
This analysis has demonstrated an overall decrease in prize money in 2015/16 compared with previous years, except in the case of races for 2 and 3 year olds, where prize money is well above changes to CPI if we use 2006/07 as the baseline year. The significant decreases in number of SA horses bred and named, and a downward trend in the number of trainers and drivers are all of serious concerns to the health of the industry. Additional data is needed to get a sense of underlying reasons and possible remedies to arrest these declines.
It is critical that decision makers understand the data – that they interrogate and question it. The importance of this cannot be understated, so that critical policy and planning decisions are based on evidence.
Approved By Dean Baring www.harnessbred.com
Driving The Future Of Harness Racing
