It is a conundrum that confronts most large scale sporting stadia: how can an often dormant facility be utilised outside of its usual event dates to create additional cash flow?
The view from Royal Randwick’s grandstand.
While the answer might simply be to open it as a function centre or rent it out to other sporting teams or codes, the hardest task is sometimes not in building the physical structure itself but in breaking it into an already crowded function facility marketplace.
That is the situation facing the Australian Turf Club (ATC) and its iconic Royal Randwick Racecourse.
Throughout 2012 the ATC undertook a major renovation at the Randwick facility, less than 10 minutes east of Sydney’s city centre.
At a reported cost of $150 million the main racecourse surrounds were transformed from a layout which had existed for more than a century, a vintage-1970’s concrete grandstand for general admission punters and an auditorium to the rear of the main action which, to be fair, was a reasonable alternative for patrons to do their best at backing a winner or at least escape the cold on a wintry day.
Opening the new grandstand in April 2013, the new six level structure towers over the Randwick home-straight and its “first-up,” read debut, performance coincided with the red letter day of racing’s latest champion Black Caviar delivering her farewell performance in winning her 25th consecutive race.
Including a ballroom, the “Grandview” room overlooks the track and with more than 3500m2 of flexible floor space. This is a serious facility in racecourse terms which reflects such serious investment.
With the November announcement that Racing NSW and the ATC have bid to host a revamped autumn racing carnival at Randwick, called The Championships and projected to be Australia’s richest, its redevelopment will further consolidate Randwick as a globally renowned venue.
But apart from the intention of providing a world class facility for racing, the capacity to derive revenue from non-race day activities is a challenging, yet, attractive option.
And getting those dollars from a different type of punter is a necessity.
Darren Pearce is the Chief Executive Officer of the ATC which administers racing at Royal Randwick together with Sydney’s three other metropolitan class racecourses; Rosehill Gardens, Canterbury Park and Warwick Farm.
“The thinking right from design stage and carried all of the way through, was that we had to make it a multipurpose space which was interesting and accommodating on race days but also so that it could be flexible so that is could used for all myriad of non-racing events which would potentially generate new revenue streams… and it has been built for that purpose,” Pearce says.
“Racing’s traditional revenue streams (primarily from distributions from wagering activities) are under pressure and from a business perspective we need to be strong in our racing business and in other diversification opportunities.”
Fox Studios, Sydney Cricket Ground and the Sydney Football Stadium are all within a two-kilometre radius of the course, not to mention the well-established hotel convention centres and rooms around the city itself.
That represents some stiff competition for a newer player but Pearce believes Randwick’s competitive points of difference are tangible enough to make it a profitable investment in the future.
“Being CBD fringe, a good proximity from the eastern suburbs and the airport, 5000 car parking spaces which a lot of venues don’t have, and an in house security team for potentially sensitive functions,” he lists without hesitation.
“With the Sydney Convention Centre going offline for the next three years we are certainly able take on those larger scale events.”
The Royal Randwick brand is revered in racing circles but etching it into the minds of other special events, conventions or even larger scale party planners is the next major focus.
“We race at Randwick only forty days a year which means we have another 325 days to utilise the asset,” Pearce adds.
“We’ve been successful at doing it for a number of years in our more traditional grandstands and we already have a strong event capability,” he notes the annual Future Music Festival as one example which has grown from a small but passionate attendance to attracting more than 50,000 people in recent years.”
The ATC’s task ahead though isn’t just to make this facility a cost effective operation but to also support the primary business of racing itself.
“Racing is our reason for ‘being’ and the profits we make from other activities all goes back into supporting racing, so it is all complimentary,” Pearce notes.
“We have an enormous responsibility to grow racing, to grow events and to ensure that the venue used as often as possible to benefit the State.
“Racing is very much a global product now and we want to have an attractive product not only domestically but also export internationally in this digital age.”
Not just in sport, a healthy level of competition exists between the racing jurisdictions in Sydney and Melbourne but Pearce is very quick to assure that the Royal Randwick Grandstand’s intention is well beyond any of those historical rivalries.
“It is certainly a part of a broader plan and far more that just simply to be able to boast that we have a better facility than Melbourne does,” he says.
“There has always been that competitive tension but we operate in a largely different market. At Carnival times of year you might be competing on horse quality or racing personalities or investment from sponsors in racing itself, which is healthy competition.
“However we’ve built this facility because our business model needed it and New South Wales needed to boost its racing industry which contributes more than $220 million in direct State Government taxes.”
While the reasonable expectation is that any revenue from the new facility will not exceed that of Randwick’s racing activities, the ATC is open minded to its potential in the longer term.
Either way, and from any sporting code’s perspective, the Royal Randwick Grandstand is a significant investment which may well provide the most substantial test of a modern sporting facility breaking new ground in the broader commercial world.