A deal that would have seen Harness Racing move back to Moonee Valley would have cost the code at least $35 million, it has been revealed.
Harness Racing Victoria CEO Matt Isaacs released a statement on Wednesday that explained why they will not seek to move to The Valley as it undertakes its own major renovations.
He also outlined key demands the Moonee Valley Racing Club made around commercial deals that made any move unviable.
In the statement, Isaac said the cost of the move was far too great.
‘’The concept under consideration was significantly more than simply returning harness racing to the venue. It involved the creation of a new integrated racing model, including the proposed establishment of a combined Moonee Valley Racing and Harness Racing Club,’’ he wrote.
‘’While the vision was compelling, the commercial realities presented substantial challenges.
‘’Under the proposed arrangements, HRV would have been required to fund the harness racing-specific infrastructure necessary for the venue to operate. This included construction of a new harness racing track, tunnelling and access works, lighting infrastructure, stabling facilities and associated operational requirements. The estimated cost of these works alone was approximately $35 million.’’
Issacs wrote also revealed that HRV were being asked by the MVRC ‘’to make a substantial financial contribution towards the broader redevelopment and associated facilities required to support the project’’.
He also said MVRC wanted to retain key commercial returns made by HRV
‘’The proposed model also contemplated the retention of venue-based commercial and sponsorship revenues by the operating club, while HRV would continue to carry significant industry funding obligations associated with racing operations,’’ Issacs wrote.
‘’While wagering modelling indicated that a premium metropolitan venue may generate improved wagering outcomes relative to existing operations, those benefits were largely offset by the materially higher operating and funding requirements associated with conducting racing at a premium inner-metropolitan facility.’
‘’After extensive analysis, HRV concluded that the projected return on investment did not justify the level of capital required.’’
The move to The Valley also would have forced the code to sell key assets to fund a move.
‘’Importantly, funding participation in the redevelopment would likely have required the liquidation of existing industry assets, including consideration of the future of Melton. Such an outcome would have fundamentally altered the industry’s long-term asset position and future strategic flexibility.
”HRV also considered the broader policy environment surrounding industry land holdings and government asset arrangements. These settings created additional complexities and uncertainty regarding the ability to fund a project of this scale while protecting long-term industry interests.
”The Board ultimately determined that maintaining and preserving industry-owned assets represented a more prudent course of action than directing substantial capital towards infrastructure that would not be owned or controlled by the broader harness racing industry.’’
Issacs also stated that ‘’ HRV determined that the proposed redevelopment did not represent the best long-term investment outcome for Victorian harness racing.’’
Betsy recently revealed the MVRC had been approached to merge with the Melbourne Racing Club, which they later rejected.
