The Hoarse Whisperer
by Jenny Ortuoste
for 28 March 2007, Wednesday, BusinessWorld
For over five years, prominent racehorse owner and breeder Raymund B. Puyat has dreamed of establishing another horseracing track in the country, one to rival the existing San Lazaro Leisure Park of Manila Jockey Club (MJC)in Carmona, Cavite, and the Philippine Racing Club’s (PRC) Santa Ana Park in Makati City.
Puyat’s family is finalizing a joint-venture agreement with the real-estate and gaming firm Belle Corporation to build a racetrack on 45 hectares of Puyat-owned land in Silang, Cavite. Puyat, president of the Metropolitan Manila Turf Club (MMTC), has acquired the horseracing franchise of Belle and is said to be targeting January 2008 as the opening date of his as-yet unnamed racecourse. With P2 billion of Belle’s financial backing, Puyat could indeed be on his way to seeing his dreams finally become reality.
Quite a number of horseowners are very supportive of Puyat’s plans. They say the climate at the proposed MMTC site is much cooler and better for their horses than the hot and humid conditions at the Sta. Lucia Realty’s Saddle and Clubs property in Naic, Cavite, where PRC is to relocate their racetrack by January 2008.
But can the industry support three racing clubs? Gross revenues from racing have been in decline for the past three years and in 2006 suffered a 2.78% dip, as previously discussed here. If the two existing raceclubs are finding it difficult to maintain profitability, how then can MMTC do the same, much less achieve ROI in a decent span of time?
At present, MJC and PRC conduct their races six days a week on alternating weeks. They share a loyal niche market that is not growing substantially. If MMTC joins the fray, they would have to run their races at the same time as one of the other tracks. That would mean that bettors’ money would be divided between two tracks, possibly resulting in weaker sales for both. Does MMTC have a plan to counteract this?
A terrific marketing scheme could kick-start MMTC’s entry into the industry. Huge billboards and splashy tri-media ads with promos and freebies could attract the attention of mainstream sports fans as yet unbitten by the racing bug. More significantly, high-profile corporate sponsors backing big-money stakes races starred in by current track champions will have racing fans stampeding for the ticket windows.
But for many years, the marketing efforts of both MJC and PRC have been hampered by a dearth of sponsors, most of whom are leery of supporting an activity they perceive as a form of gaming rather than as the “sport of kings”. Can MMTC persuade them otherwise?
MJC and PRC collect over 95% of their revenues through “off-track betting stations” or OTBs, of which there are 334 all over Luzon, with most of them located in Manila and Quezon City. Local governments issue the permits-to-operate. Many city mayors are reluctant to allow OTBs in their cities, among them Pasig and Makati. Can MMTC change their minds?
If this business was a horse race, MJC and PRC are many lengths ahead of MMTC, which is just entering the starting gate. It has to run a long way to catch up. Can MMTC can stage a come-from-behind victory, or will it just trail behind the front-runners in the race towards profitability and viability? ***