Sunday, 1 September 2013

Great British Racing – But Still Dire Returns for The Diminishing Number of Owners



Many of our owners make an annual pilgrimage to the Knavesmire for the Ebor meeting, and this year was no exception. To many eyes it is the best track in the country, fantastic racing, hugely knowledgeable crowds and without any doubt the cheapest and highest quality Champagne on any racecourse in the land. Delighted to see The Fugue bounce back in the Darley Yorkshire Oaks for her owner-breeders, the Lloyd-Webbers, and she may now be off to either the Arc, the Prix Vermeille or the Breeders’ Cup. I was always a big fan of Rock Of Gibraltar, and Declaration Of War seems to be very much in the same mould – a huge, tough horse who really dominated the Juddmonte International. He could be a great stallion in time, and is one to keep an eye on.

However, the result that really pleased me was Tiger Cliff winning the eponymous race itself. When I lived alongside Paul Cole’s gallops on Woolley Down, I often used to meet Henry Ponsonby walking his dogs. Indeed, the very first time I met him, he managed to sell me a share in Bonchester Bridge at Nicky Henderson’s, which is how I met Jamie Snowden, now one of our trainers. On occasions Henry can be an irascible devil, but if you share a magnum of claret with him he is one of the best raconteurs in the business. A typical tale involves an encounter with a naked but well-known author. She obviously forgave him because Henry makes a proud appearance in one of her recent novels – maybe surprisingly, with his clothes on. His partner, Kish, has not been at all well recently and this victory must have been a huge tonic. To land Europe’s richest handicap and bag £155,000 for the syndicate owners was a superb triumph. Apparently Tiger Cliff is due to head to Alan King, so who knows, we may see him pop up in the Supreme Novices at Cheltenham next March.

Finally on this Yorkshire theme, it was also great to welcome back Karl Burke as the designated trainer at Spigot Lodge after 1,491 days. The whole Burke family is completely dedicated to making this yard a great success, so nothing really is going to change, but Karl must have been very pleased indeed to pick up his first winner within a few days of regaining the licence. It was a long time to be on the cold list! By coincidence, Henry Ponsonby, when he lived in Wensleydale before being banished to Lambourn, used to ride out at Spigot Lodge. Our sport can be a close network.

Back though now to the economics of racing. I suspect not many of you have ploughed through the 50+ pages of the Deloittes report, The Economic Impact of British Racing 2013. I have now, and it provides a good reference point (figures relate to 2012). I’ll be coming back to it a lot over the next few blogs. Here are some facts and figures to consider:
  • Contribution of horse racing to the UK economy: it is the second-biggest sport after football. Around 6 million people go racing every year. The net worth / total economic impact of racing is £3.5bn. There are 20,000+ people employed directly in racing. If you include betting operators and other parts of our sport, there are 85,000 jobs at stake. The industry generated over £275m in tax for the Exchequer.
  • Owners’ contribution to the sport: in 2012, 8,215 owners spent £369m in direct training fees and racing expenditure. If you add in the investment in bloodstock, it was £470m. Prize money won was £78m. With sponsorship included, the return on ownership (ROO) was £85m – a miserly 20%. The number of registered owners has dropped by 14%.
  • Racecourses’ contribution to the sport: there has been £950m of unprecedented capital investment over the past decade. Media operations generated £173m in revenues. Media rights are booming and are expected to exceed £100m in 2013. Income from racegoers, sponsors and corporate customers was £371m. Prize money was lower in 2012 than in 2004.
  • Bookmakers’ contribution to the sport: their gross win in 2012, i.e. the amount lost by punters, was £710m. Racing received £75m via the statutory 10.75% levy applied to their “profits” on this sum. Levy has fallen sharply (from £150m) as bookies have gone offshore to evade tax and the levy.

I’ll come back to some of the issues that naturally flow from these figures in the next blog. At the moment I think a tentative title could be “Milking the 8,215 Cash Cows (Owners) Dry”. More on that next time.


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