The club that runs the Melbourne Cup just posted a $7.2 million loss. This is why it says that’s a good thing

The Victoria Racing Club says it has taken a key step towards profitability despite suffering its fifth consecutive multimillion-dollar loss since 2021.

The club that runs the Melbourne Cup wrote to members on Tuesday afternoon to announce a $7.2 million loss for the past financial year.

It follows losses of $24 million in 2024, $14.9 million in 2023, $16.9 million in 2022 and $14.9 million in 2021.

But VRC CEO Kylie Rogers told members that the figure translated to an EBITDA (earnings before interest, taxes, depreciation and amortisation) profit of $12 million, a $17.9 million improvement on the previous year.

She said the turnaround was an important start “in returning to the club to a net profit position”.

The VRC, which runs Flemington Racecourse, told members it had cut spending by $8.7 million in the past financial year and paid down a further $5 million of debt.

The club still owes $57.5 million, but Rogers said they had extended their “ANZ facility agreement” until 2027 and intended to reduce the debt by another $10 million this financial year.

The cash-strapped club axed 40 jobs just three weeks before Christmas last year as part of a major restructure to rein in years of spiralling debt.

Rogers then appointed a new executive leadership team to oversee operations, commercial, finance, and marketing, joining an existing position in racing.

The club also closed the new $128 million Club Stand to members during January to save on operational costs.

“We have been disciplined in our approach, managed our expenses and right-sized our business to ensure operational efficiency,” Rogers said.

But the race club pumped $7.3 million into prizemoney top-ups, as well as investing in training and racing facilities “to ensure the precinct upholds its world-class standards”.

“Over the last financial year, we have had a clear focus on increasing club revenue, which has included strengthening our commercial partnerships, growing our membership base to a record 35,371, and a new media rights partnership with TAB and the Nine Network,” Rogers said. Nine owns this masthead.

“We are under no illusion there is still plenty of hard work ahead, but the plans are in place and the outlook is positive, and we are committed to building on these sound foundations.”

Across the 2024-25 season, Flemington hosted 21 race meetings that were attended by 415,688 people and created $1.53 billion in wagering turnover.

The club’s total revenue was $225.7 million, up $9.2 million, while its costs were $232.9 million compared to $240.7 million last year. Of those expenses, $15.5 million was listed as depreciation and amortisation.

The club made $28.9 million from ticketing and membership, but paid out $38.45 million in members’ services and administration.

The club made almost $1 million in profit from a $63.37 million turnover in catering and hospitality, and cleared $34 million in marketing, sponsorship and broadcast rights.

The club’s annual report listed $165.83 million in cash receipts compared with $147.46 million in payments to suppliers and employers.

“After navigating the financial challenges of the post-COVID years, we are now firmly back on track,” VRC chairman Neil Wilson said in the annual report.

“Pleasingly, we have returned to a strong cash-generating position, enabling us to reduce debt and increase investment in racing, members, community facilities and the ongoing work to develop and deliver the Flemington 2040 precinct master plan.”

Wilson told members that the Melbourne Cup carnival contributed a record $502.4 million in gross economic benefit to Victoria in 2024, while also bringing 68,898 people to the state – including around 20,000 international guests.

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