Monday, 15 September 2014

Cheltenham’s New Era ….. And Will That Be Extended To Owners As Well?

I always find September and October one of the most interesting periods of the year. We’re working through the last of the big Flat racing festivals and just starting to sense that the spectacle of Jumps racing is about to begin. This year in particular we have had a really thrilling couple of races from our two-year-olds, Lord Ben Stack and Jolievitesse, so I’m keen to hold on to the Flat and the fine weather for as long as possible. It is likely that the imposing Dylan Thomas (Lord Ben Stack) will go for the Group 2 Royal Lodge Stakes at Newmarket on Saturday, 27th September (Cambridgeshire day), while the equally impressive Elusive City (Jolievitesse) will be aimed at a Listed race before being put away for the winter. At this stage we’re really excited by both prospects, so much so that we’re creating two high-flying plans for next season: Lord Ben Stack’s early target to be the Dante ahead of the Derby, and for Jolievitesse, the English or French 2000 Guineas before the Sandown Classic Trial. (If you can’t dream, you shouldn’t own racehorses!)

So with this focus on the Flat, it has taken me a few days to read through the ultra-glossy brochure from Cheltenham that turned up recently, outlining its “New Era”. The long-overdue, £45m grandstand development is well under way, with everything expected to be ready to open for the Festival in 2016. In the meantime of course we’ll just have to get by as best we can, and doubtless there will be some grumbling about diminished facilities available for our £330 full membership. I’m sure though that the new grandstand, changes to the weighing room, redesign of crowd flow over the pedestrian bridge etc. will be a very big improvement and I’m really looking forward to everything being completed on time.

However, I’m going to ask Cheltenham what the “New Era” will mean for owners. The glossy brochure was obviously aimed at selling tickets, membership, hospitality and even the “unique opportunity” to join the ultra-ritzy Cheltenham Club that will be situated on the top floor of the new grandstand. While it won’t be as expensive as the rumoured £80,000 annual charge for a private box, you would certainly need a few hefty wins on the track to pay for admission. Unfortunately the 36-page brochure says almost nothing at all about the benefits for owners. So here are a few of my own recommendations:

  • Redefine the owner experience so that Cheltenham sets a new benchmark standard for excellence.
  • Dramatically upgrade the Owner & Trainer facilities both within the new grandstand and elsewhere, so that Cheltenham can provide that standard of excellence on every day of racing including the Festival.
  • Stop the differentiation in facility access between the owners in top graded races at the Festival and in the handicaps. It costs the same amount of money to train a horse regardless of its race, and all owners should enjoy a high-quality experience on the track. Stop sending owners off to crummy facilities in marquees where they have to buy their own food and drink.
  • Be far more generous with owners’ badges. Last year, when our Shantou Magic ran in the Martin Pipe, we had to pay £90 for each additional badge. Bearing in mind that our owners were also members at Cheltenham and had already paid over £300, this is excessive.
  • Cheltenham may argue that numbers have to be restricted because of health and safety in the paddock etc. If that is genuinely the case, increase the size of the paddock now as part of the redevelopment scheme, so that it can accommodate more owners. This is our Olympics and showcase, so why restrict numbers?
  • Sort out the Owners & Trainers entrances so that badges can be allocated and picked up without the hassles that have been experienced over recent years. It is demeaning to have to stand there, trying to convince the desk staff that you are a genuine owner entitled to a badge.
  • Finally, set a new era on prize-money. Three recommendations: dramatically increase the quantum of total prize-money; have prize-money down to 6th place; and apply the principle that any placed horse must win enough to cover the cost of entry, jockey fees and transport to the track. Lots to discuss as we all pile in to the revamped See You Then bar at the start of the new season on Friday, 17th October.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.

Monday, 1 September 2014

Northern Racetracks and Part 3 of Dealing with Owners Exiting from Syndicates

It was really interesting talking to a number of our owners who went up to York for the Ebor meeting. There was a really strong consensus that York’s flagship racing festival manages to get almost everything right, and owners and race-goers are really well looked after, not least with the best value Champagne of any course in the country. Perhaps more importantly, they bumped up the prize-money this year by another £0.25m to a record of £3.5m and guaranteed place money down to 6th for all 25 races, thereby ensuring that each race was worth not less than £40,000. Well done to everyone involved in this at the Knavesmire. If only this could be copied by other so-called “festival” meetings, as owners we’d have a bit less to grumble about.

At a much lower level, also well done to Thirsk which has also boosted prize-money recently, and with a few exceptions every race there is now worth at least £5,000. Even beautiful Beverley is doing its bit for the owner experience, their latest idea being a wide selection of home-made cakes in the O&T bar. Go racing in Yorkshire! Which all adds to the reasons why we’re such positive supporters of Karl Burke in Middleham.

In the last couple of blogs I’ve been looking at some of the issues involved in terminating syndicates and exiting from horses. I’ve been arguing that partnership agreements must have an indication of the likely term of the syndicate, and that there are reviews, particularly after two years, that enable owners to leave. I am particularly against open-ended syndicate agreements where horses are kept in training even though they are distinctly moderate, but are really only running to generate fees for the syndicate manager.

One of the difficult situations to deal with, though, is when most of the owners want to stay with the horse, but one or two want to leave. This is particularly compounded when an owner decides to exit regardless by giving an ultimatum to co-owners, normally along the lines of: “I want out and I don’t intend to pay any more money.” It definitely helps if the written agreement maps out a number of principles and scenarios, such as:
  • If one partner wants to end their involvement, they should at their cost attempt to sell their share to a third party, provided it is offered to other partners who have first refusal.
  • If several partners wish to do the same, then again they can try to sell their shares privately, but if not the horse can go into a public auction to establish its market value (and it will be up to the continuing partners to buy it back if they want to).
  • If one or more partner(s) want to sell their share(s) without going into a public auction, then two independent valuations need to be obtained, with the average of the two valuations being the basis for share buy-out, again with the cost borne by the partner(s) wishing to sell. There is no obligation on the other partners to buy the share(s).
  • In all of these scenarios, there should be a requirement to continue paying training fees for a defined period, e.g. three months, or until the next available suitable sale.
  • Finally there can be the very unpleasant scenario where an owner backs out precipitately, leaving the rest of the owners to pick up the pieces. This is clearly unacceptable. It should be made clear that they forfeit their share of the horse, but that will be ineffective if the horse is moderate and has little or no value. In that situation there are then only two remedies: legal pressure to pay (with threat of court action), or getting the non-paying owner on to the BHA’s Forfeit List, thereby ensuring that they will not be allowed to become an owner in British racing again.
The more explicit agreements can be, the better. However, the real key is everything to do with the horse, its training and wellbeing being actively communicated on a regular basis and at the same time, keeping very open communication with all the partners so that if anyone is becoming disillusioned and wants to terminate their involvement, it can be discussed as early as possible, in the most constructive way. Alas, however, human nature being what it is, there are always some individuals who adopt completely unreasonable behaviour. Hopefully you don’t encounter them in your syndicates or partnerships!

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.