The Verdict: Australia’s industry players evaluate its vibrant market – Terry Henderson
In a five-part series ANZ Bloodstock News speaks to some of the industry’s key players for their perspective on the incredible performance of the 2021 major yearling sales season.
We asked them for their take on what’s behind all the money that’s been flying around sales rings since January and also for their thoughts on the current general state of the Australian racing and breeding industry.
In today’s edition, Jo McKinnon talks to OTI Management CEO Terry Henderson. Terry holds a Bachelor of Business and Transport Economics. He has held numerous positions on boards and has been chairman of a number of private companies.
Terry, it’s incredible how the Australian yearling sales market has performed this year. Lots of people have their own reasons and analysis as to why, what’s your opinion?
It has been amazing. Internationally we are privileged to have the type of environment we have in Australia. In a macro economic sense, Australians spend about $65 billion dollars a year going overseas and travelling each year which is a remarkable figure and that money is staying in Australia and I think our industry has been the benefit of it as have a lot of other luxury type items.
Unlike other jurisdictions we have the benefit of a good business model in racing generally and particularly in NSW and Victoria but also Queensland and West Australian stake money is good. We do have a good business space in our industry which encourages people to think they can come into the industry and buy young colts and hopefully breed a stallion and more so buy well bred fillies and see they can get a return down the track if they don’t make racehorses.
I also think, although some of our racing authorities may not agree, that competition being developed between states may not be good for pattern racing but it’s very good for business and it stimulates stake money and in many cases efficiencies and I think that is adding to the economic base of our game.
The fact that racing has continued in Australia during the Covid-19 pandemic without interruption, unlike some other jurisdictions, has been a blessing for the industry, would you agree?
We have been very lucky. Most have only had a hiccup. Ireland and France have virtually run straight through. Ireland had a few weeks and New Zealand stopped completely and England has been a little on and off a few times.
I think we have been very fortunate and I think great credit must go to leaders and government officials who have recognised the importance of horse racing as part of Australian business. In terms of competition on that score we are not much different to the other jurisdictions, I just think that, basically, we are in a much better position than them generally.
Is it a false economy at the moment?
If it’s underpinned by a good business base, and I think it is in Australia, I don’t think it is a false economy.
I think false economies come when you get runs on the market like we did in the late 80s and saw broodmare prices plummet down to ten-15 per cent of their previous values.
Since the turn of the century we have got through a global economic crisis and we got through it very well. Globally, and in Australia, we have seemed to continue to prosper and the industry has become more economic for those participating that want to get in, like us, at the breeding level.
The other big distinction is syndication. There are not many countries in the world that have the broad ownership groups that we have. So, we have those sorts of actions underpinning our industry which makes it a real economy not a false one.
How has OTI performed through the Covid-19 pandemic?
We are different from general syndicators and more like a merchant banker. Most of our horses come from overseas and we are not actively involved in the yearling market, but the market is there and people who are involved in horses we buy are still keen to continue to do so.
We have broadened our base to cater for the middle distance market and the mares market.
We have quality mares racing for us that we didn’t have five or six years ago. That’s a function of the size as well as the sort of business that we run.
The biggest change for us is the ownership group. We now have 30 international owners racing with us, some French, English and Irish, who have been in horses we have purchased and decided to stay with us and come across to Australia.
I think the whole communications aspect of the way the industry communicates between trainers, owners and breeders is certainly superior to other jurisdictions and that’s helping to keep international owners involved.
Covid has, in some instances, been good for businesses and especially racing which, prior to the pandemic, had started to struggle with poor public perception due to various issues including welfare concerns. What are your thoughts on those issues, which will always remain?
I think we always have to be very conscious of social trends. We should not be beholden but aware that we have to move with the times on issues like welfare and gambling.
You see what’s happening in England with gambling restrictions looking like being placed there. God forbid that doesn’t happen in Australia. It’s up to the authorities to be cognisant of trends that may come into the industry that the public may not approve of and be aware of them and address them up front without kowtowing to people that don’t want racing to exist at all.
We have been very responsive to welfare issues and horse welfare generally. Once they have a proper tracking and whole of life system in place, not many people are going to be able to complain about that.