Wednesday, June 27, 2012

Racing Is Government's Favorite Whipping Boy

The headlines are pretty astounding. Almost everywhere you look - Indiana, Pennsylvania, New Jersey, New York and of course the granddaddy of them all, Ontario - racing is taking it on the chin. We're a favorite whipping boy for government's virtually everywhere. And it doesn't matter which political stripe. Democrat, Republican, Conservative or Liberal. Our name is mud.

It's not that we're unloved by everyone or in some cases we don't deserve getting a smack down because of bad management of our money and customers, it's because, in my opinion, we're a really easy target.

Ontario is perhaps the worst case of them all, for government policy, I believe. Can you imagine that if, say, in 1995 the Toronto Maple Leafs were building a new arena. The government stepped in and offered a casino at the new venue and gave 5% of the revenue to the team to build it. The team built a winner because they could afford the best, spent on a great arena, supported a feeder system of minor league hockey all across the province, and built a new hockey industry. To run this whole system from top to bottom, as they are working as a non-profit, it takes all the revenue.

Then one day the government said "at the end of the season, we're taking all the cash". Not in five years, or ten years, or whatever - right now. Immediately, minor hockey teams would fold. Kids would not be able to play, arenas all across the province would close, the team would have to have a fire sale of all their contracts. They'd barely be able to ice a team that could win two games a season. The arena would be bulldozed, because they could barely pay for the upkeep. Hotels beside the venue, some built this past year because of tourism dollars and a hockey team and concerts next door, would all fold and everyone would lose all their investment.

The public outrage would be palpable.

That would never happen of course. Politicians would know not to mess with such a venture in such a callous way, because they'd be toast. If they planned to cut it off, they'd probably work out a nice plan with hockey, tourism, hotels, the city, and everyone else to transition things properly.

But in racing, the exact same thing has happened, sans consultation. Breeders who live with 5 or 10 year business plans, buy plant and equipment on the same time horizon, people with yearlings or weanlings (like me), can't plan anything. It's not like I'm on welfare and they give me 24 months to find a job before I am cut off. Me as a private citizen can help myself. But an entire industry with this time horizon? It's crazy.

This is nothing new for government of course. Public policy can be insane, like in the States with a crumbling economy in 2008-9, the Congress down there worked on health care, which was an added business cost with uncertainty making business not want to hire, and they were actually going to do cap and trade - another sure job killer - before some common sense kicked in.  It's not that those things were not important or didn't have merit. It's just crazy stuff to be even thinking of, let alone implementing, with millions out of work during a recession.

But this surely takes the cake.

I'm not an apologist for this industry. We've made plenty of mistakes. But I am a fan of common sense. Cutting off all the funding for an entire capitally intensive industry in one year is not right. I sincerely hope the governments here - and everywhere - sees this for what it is, and gets to work on making this policy something that acts as a proper transition, so an industry can have some certainty to restructure. Bringing out a guillotine for a business with a long time horizon is not only terrible public policy, it lacks even a morsel of common sense.




1 comment:

Eric P said...

But what if the 'public outrage' you note does not include FANS or Customers of the team you speak of?

Alternatively, wouldn't such 'outrage' be more meaningful if it did include the the Fan or Customer?