Billionaire horse owner Jonathan Munz hosted two of the most powerful figures in Melbourne racing at a secret meeting in his Toorak mansion to discuss a potential merger of the Victoria and Melbourne racing clubs.
Talks focused on bringing Flemington and Caulfield racetracks under one administration, and undoing 150 years of tradition by creating a super club that would oversee both the Melbourne and Caulfield cups.
Racing owners association chairman Jonathan Munz.Credit: Martin King
MRC chairman John Kanga and VRC chairman Neil Wilson met at Munz’s Orrong Rd property on February 27 to discuss the proposal. VRC vice-chairman Michael Ramsden also attended.
At the heart of the talks was the VRC’s mounting debt, the club having lost $70 million across the past four years, including $24 million in the past financial year.
Ramsden, who has been on the VRC board since 2012, confirmed the Munz meeting took place.
“Nothing really happened since we had that chat a while ago,” Ramsden said. “Nothing’s progressed and they’ve (MRC) got a few matters they are dealing with at the moment … Anyway, we’ll see what happens.”
The MRC is one of the richest sporting clubs in Australia, owning 112 hectares of land at Sandown Racecourse in Springvale, as well as 14 poker machine venues that make a combined $50 million a year.
The proposed merger would see the two clubs operate under the VRC banner, with a combined board, while Wilson would act as temporary chairman before handing over to Kanga after 12 months.
The chairman of the super club would begin to rival NSW supremo Peter V’Landys for influence.
Members of both clubs would need to vote for a merger to happen.
It was suggested at the meeting that winning the support of MRC members could involve free membership of the new entity for at least two years, according to sources familiar with the discussion but not willing to speak publicly about a private gathering.
While Wilson took his vice chairman to the meeting with Munz, sources claim Kanga did not take the matter back to his board.
But, according to the sources, the relationship between the two clubs soured recently after sensitive information about the VRC’s finances was leaked from a private Racing Forum, hosted by Racing Victoria, to the Herald Sun.
The newspaper’s May 22 story – “Desperate VRC raids Everest rival race for Melbourne Cup prize money” – angered members of the VRC committee and executive.
Munz declined to comment on the meeting, while Kanga and Wilson were contacted for comment.
VRC chairman Neil Wilson says the club will return to profitability by 2026. Credit: Eddie Jim
Former Racing Victoria CEO Andrew Jones wrote a column for this masthead in November last year, suggesting “it has been obvious to the racing industry for decades that Melbourne’s clubs should come together”.
Such a merger would leave Moonee Valley Racing Club out on its own as it prepares to close its gates for 21 months in November to undergo a complete rebuild of its track and facilities.
The Valley rejected a behind-the-scenes push at Racing Victoria in 2015 for the MVRC to be absorbed into the VRC and the Cox Plate to be run at Flemington.
Wilson told this masthead in February that the VRC would return to profitability by 2026 on the back of a lucrative new media deal with Tabcorp and Nine (owner of this masthead), worth between $30 million and $40 million, a return to bumper Melbourne Cup week crowds and new sponsorship agreements.
A proposed merger would see a racing super club oversee the Melbourne Cup.Credit: Getty Images
The VRC announced a three-year partnership extension with Lexus in March, including Melbourne Cup naming rights until 2027, but Penfolds winery has pulled the pin on its lucrative spring carnival contract.
Kanga has publicly supported the prospect of a merger between Melbourne’s metropolitan clubs in the past as way for the industry to become more efficient.
But his MRC board has come under scrutiny this week after removing chief executive Tom Reilly from office, and announcing that it had appointed Tanya Fullarton as chief operating officer.
Two sources not permitted to speak on behalf of the MRC told this masthead that COO role was not advertised and that Fullarton would be paid $500,000-a-year, plus bonuses.
Fullarton sits on the Thoroughbred Racehorse Association board alongside Munz.
MRC board member Barbara Saunders resigned on Monday in support of Reilly.
“I resigned because I had concerns about the lack of governance at the club and the removal of Tom Reilly from his position as CEO because, in my opinion, he was performing the role very well,” Saunders said.
The MRC released a statement on Monday night to say it had removed Reilly from the CEO role because “sometimes things don’t work out”.
“Tom was only CEO for three months and when things don’t go as well as they should, it is best to pivot and move on,” Kanga said in the statement.
The MRC chairman said the board had appointed Fullarton as COO to “work with me”.
Kanga swept to power as chairman at a board meeting in October last year, two months after he filed a motion for a special general meeting to remove committee members Matt Cain, Nick Hassett, Mark Pratt, Brooke Dawson, Scott Davidson and Jill Monk.
His Save Our MRC movement followed through on its promise to save Sandown Racecourse from development, move the new Caulfield mounting yard back to its original position in front of the members’ stand as well as scrapping plans to build a new $250 million grandstand at Caulfield.
He signed off on an agreement to sell seven hectares of land beside Caulfield Racecourse to Mount Scopus Memorial College for $195 million – a deal that will clear the MRC’s $160 million debt, money borrowed to build a new inside track, a new office block, subterranean tie-up stalls and a mounting yard that is no longer used.
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