Wednesday, 15 January 2014
No More Nonsense at Newbury (or at least for the time being), Part 3 – Understanding the Challenges facing the Racecourse and Putting the Dress Code Fiasco into Context
A large group of us went to Newbury Racecourse on 28th December to cheer on Shantou Magic in the Grade 1 Challow Hurdle. He came 4th, after a very bold and brave attempt to make all. It was a real privilege to be in the winners’ enclosure after a race of this importance – the dream over his long-term future is well and truly alive. He may well race again at the end of the month in a valuable handicap before stepping him back up in grade again. A really exciting day – and fortunately, no silly dress codes to deal with. My wife, Jack, bravely wore exactly the same outfit as on Hennessy day, without incurring the wrath of poorly trained stewards.
During the day I was most impressed that the newly appointed CEO, Julian Thick (former MD of Aintree, Sandown and Kempton Park) went out of his way to track me down and was most generous with his time. We had a long discussion about the dress code, and also the broader strategic development of Newbury. He couldn’t apologise enough for the poor implementation of the dress code, and as compensation is going to provide lunch in the Royal Box on Betfair Gold Cup day, Saturday, 8th February, which is something to look forward to.
In the short term, the dress code has been suspended while Newbury considers what to do next. Defusing this issue and mitigating the PR damage of it was clearly the only sensible option. So what should Newbury do next in terms of customer behaviour and “standards”? Indeed, do you think it should do anything?
I thought an interesting starting point would be to look at the finances of the racecourse. The track is part of Newbury Racecourses plc, a group of companies that own the racecourse and engage in “racing, hospitality and catering retail activities”. Very significantly, in 2012, they entered into a joint venture development agreement with David Wilson Homes for a major redevelopment of the racecourse, together with the construction of 1,500 homes. While there is apparently strong demand for these apartments and houses which are being built along the racecourse, there is much lower demand for actually attending races. In 2012 the track lost £1.2m, although profitability has improved since, with increased media revenues and the securing of longer-term sponsorship deals with the likes of Moet Hennessy, Dubai Duty Free and Bet365. Just like most companies with rising costs and falling revenues, they have completed businesswide reviews to stem the losses and increase the turnover.
Cynics (and there is no shortage of them in our sport) argue that Newbury is now just a real estate asset that happens to have a racecourse at the centre of it. At some stage, do you abandon racing altogether, or let it decline while looking for easy revenue through rock concerts, parties, exhibitions, conferences etc.? Encouragingly (and I’m definitely not in the cynical camp), all the strategic statements within Newbury’s accounts indicate a very robust commitment to quality racing and the Board is chock full of leading owners and racing enthusiasts with considerable business experience. Also they have signed up for the premier tier prize-money agreement with the Horsemen’s Group, which was absolutely the right thing to do.
It seems to me that Newbury is trying to grapple with the broader challenges that face our sport. Attendance is declining, as is individual customer spend. The last thing it wants on the track is drunken, loutish behaviour that will frighten away customers. However the dress code fiasco wasn’t the way to change behaviour. The problem though still exists. With all the rebranding that “The Racecourse, Newbury” is trying to pursue (and whether you believe this is contrived or not is another debate), it only seems sensible that influencing customer behaviour in such a way as to increase and sustain attendance is central to the overall business and financial strategy necessary to ensure that Newbury survives as a top-quality racecourse.
So what should Newbury (and for that matter, other racecourses) do next? All views welcome. I promised to put forward some views in this blog, but after the discussion with Julian Thick I felt it important to put the whole debate into a broader context first.