BACK WITH EXTRA BITE (AND MORE RELISH)

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By Keyser Soze

BREEDERS BRAWL TURNING NASTY

Often referred to and regarded as Australian racing’s privileged sector, the powerful thoroughbred breeders have long been treated as being “above the law” by the principal governing bodies and regulators of racing.

With their power base concentrated in Australia’s “Kentucky” – the Hunter Valley, known over time for it’s classic wine vintages – both red and white, Australian racing’s “rich and famous” come from diverse backgrounds. The big names in the Hunter Valley represent racing’s “new money”. Many are “newbies” having made their considerable wealth in the commercial world, with many a long and winding road leading to the boom times enjoyed in mining, property, investment, wealth management, banking and finance. Just occasionally a “Gordon Gecko” or “wolf of wall street” makes a cameo appearance, but sightings of such creatures are not easy even to a trained eye.

Whilst the rivalry among members of the Hunter Valley cabal of breeders is often intense and driven by ego and bragging rights, these rivalries have rarely been played out in the open. It is racing’s own version of keeping things in house.

Collectively, the breeders are fiercely protective of their privileged position. When they get a whiff of a challenge or sniff a threat, they have always managed to respond with a unity of voice and purpose – a rarity for any stakeholder group in Australian racing. This show of unity has earned the breeders respect in and access to the highest echelons of power and decision making in Government circles and in the business world and society.

But all of that has changed dramatically with Racing Australia’s proposal to bring the breeders under the same regulatory framework as other licensed persons – in particular, trainers and jockeys and strappers – so often the source of all the major transgressions of the rules of racing. To be sharing the same umbrella with these groups is a bridge way too far.

And the finger pointing has escalated with Racing Australia and Racing NSW Chairman John ”the messiah” Messara firmly in the gun. The “messiah” is also the principal of one of Australia’s most powerful breeding operations – Arrowfield Stud, and, arguably, the most powerful individual in Australian racing. He who wears many hats, as he is often referred to, because of his many perceived conflicts of interest arising from the roles and positions he occupies in racing, is not a popular figure in Australian and NSW racing circles. His own breeders bailiwick is no exception with the big names in Australian breeding uniting in their increasingly vocal opposition to Racing Australia’s proposed changes.

The Australian Financial Review’s John Stensholt description of those opposing the changes as including several “rich listers” is spot on. Buoyed by the support from “rich listers” such as Gerry Harvey, John Singleton, Kevin Moloney, Neil Werrett of Black Caviar fame, the George Soros-owned Newgate Farm and a host of well known breeders, the odds are stacked against the “messiah”.

In an unprecedented course of action, the breeders have written to the NSW and Victorian Ministers of Racing – Troy Grant and Martin Pakula, respectively, complaining about, and objecting to the rule changes, which, effectively, would bring all horses to be governed by the rules of racing from birth. This would then automatically bring the breeders under the regulatory authority of Racing Australia. For its part, Racing Australia advocates that such a rule change would improve transparency, horse welfare and further protect the integrity of racing and breeding.

Tactically, the breeders have warned they are prepared to take court action if Racing Australia goes ahead with the proposed rule changes. And the strength of their resolve is articulated clearly in the language of their letter to the Ministers.

Stensholt quotes: “We believe this (the rule changes) could easily lead to rules being implemented that are damaging to breeders. In no other agricultural pursuit does the end user regulate the primary producer. This proposal is akin to Coles or Woolworths being granted authority over beef and dairy farmers because they are the farmers’ biggest customers”.

Thoroughbred Breeders Australia President Basil Nolan has also weighed in: “Breeders aren’t against reform and we put a proposal to Racing Australia which would have seen our industry work with them to bring in world’s best standards. Unfortunately they seem determined to ride roughshod over everyone and we may be heading to court”.

But that is not all. The steely determination of the breeders to extinguish any flickering flame of hope of the Racing Australia proposal becoming a rule of racing is further demonstrated by the their willingness to introduce and play the “conflict of interest” card in the poker game of “last man standing”.

Stensholt writes, “The breeders have also raised the possibility of one of the country’s biggest commercial breeders Racing NSW Chairman John Messara potentially facing a conflict of interest given he is also the Chairman of Racing Australia and could in effect be in charge of rules governing rival breeders”. Stensholt goes on to further quote from the letter to Ministers: “The potential conflict of interest or even the perception of that conflict would unlikely be acceptable in other industries of a similar size and significance to the state’s economy”.

Conflict of interest? Really, how long will it take for the Australian racing industry to recognize that there is a plethora of conflicts of interest across the decision making boards of Australian racing – the governing bodies to be precise, and which have have been a substantial road block to the progress, modernization, independence and integrity of racing?

The reality is that Australian racing has chosen, deliberately, to turn a blind eye to this festering and fundamentally important issue. The default position of a shrug of the shoulder and a “so what, everyone else is conflicted” is like saying “everyone else is breaking the law, so I can do so as well”. Yes, racing is infected with conflicts of interest, but does that legitimize it?

The Breeders have drawn the battle lines, and they are taking on one of the prominent captains of their industry. The “rich listers” and their dominantly influential allies may have their noses in front. If they succeed, it could have long-term impacts on the names and faces of the decision making sectors of Australian racing.

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COULD THE BIG NAMES IN BREEDING CHANGE HANDS?

There is little doubt that the winds of change are continuing to blow with even greater speed across the Australian breeding industry. Australia is now firmly entrenched as a major player in the global thoroughbred breeding industry.

Replicating what has taken place in Europe and the UK, foreign investment has become a major player in underwriting the continuing northward trend of the breeding industry with the lifespan of the record prices across every area of bloodstock lasting only until the next major sale or the following year.

The buy up of established studs by major players fitting into the billionaire category from China and the Asian sub-continent has imitated what is taking place not just in the Australian real estate market, but also in many parts of the commercial sector, and most noticeably, in the Australian primary industry sector. The sell-off of the “farm” is irreversible.

So, it is intriguing to hear the loud whispers surrounding the possible change of ownership of two of Australia and New Zealand’s iconic and most successful breeding farms – Cambridge Stud in New Zealand and Arrowfield in the Hunter Valley in NSW.

It has been an open secret that it is only a question of when Cambridge will change hands. Despite Cambridge Stud principal Sir Patrick Hogan’s public statement and assurances that he was not in negotiations with a second or third party, and whilst the “for sale” might not be displayed across the property, the interest from the Inner Mongolia Riding Club has been openly spoken about.

The Mongolians have burst onto the New Zealand racing and breeding scene and have been importing racing and breeding stock from the land of the long white cloud in recent times, and the stunning success of their poster boy- Mongolian Khan- has consolidated their interest in racing even further. Mongolian Khan would have been standing at Cambridge if the deal was struck, but it apparently fell through – for the present time at least.

And now for the bigger story closer to home. Whether there is a motive here or not is unclear, but the drums are starting to beat about a possible buyout of Arrowfield Stud by the rulers of Japanese racing and breeding – the Yoshida family.

The Yoshida’s are the biggest name in Japanese racing and breeding. They are a household name and brand and have escalated their ties with Australian racing and breeding in recent years. Their connection with Arrowfield Stud and with its owner John Messara dates back to when John Messara and Arrowfield were the first Australian Stud to gain access to breeding rights to the great Sunday Silence for their mares. That was close enough to 20 years ago.

More recently, the Yoshida family has been buying up some of Australia’s best race mares like Mosheen, King’s Rose, Shamrocker, Politeness and the list goes on – Group One winning stock to augment their own breeding stock. In this context, buying or taking a major stake in Arrowfield would be a natural progression and ideal fit. And it must be said that if the deal was consummated, the Yoshida’s would be acquiring the most prestigious Australian-owned stud. They would be buying into the legacy that John Messara built up- single handedly- and in the face of some incredible challenges and adversity. Huge respect for what Messara has achieved.

If it does happen, it will be one of the biggest stories in Australian thoroughbred breeding- almost as big as when Messara revolutionized Australian breeding by introducing the shuttle stallion concept between the northern hemisphere and Australia many decades ago with the incomparable Danehill.