Sunday 15 March 2015

The Tesco Approach: “Every Little Helps” – But will extending prize-money down to 6th increase frequency of running horses, and as a result, field sizes?

We received a letter recently from Ruth Quinn, Director of Racing at the BHA, informing Owners for Owners that as part of the agreement on the 53rd levy scheme, the four largest retail bookmakers (William Hill, Ladbrokes, Coral and Betfred) have made additional voluntary contributions of £4.5m on top of their statutory levy payments for 2014/15. As a result, a total of £5m (the extra £0.5m coming from the Levy Board) is being injected into extending prize-money from 1st December 2014.

Basically, in some Class 2 to Class 6 races, place-money will go down to either 6th or 8th, with payments of between £200 and £400 paid on top of existing prize-money. This will ensure, in eligible races, that every horse finishing down to 8th in a Class 2 or 6th in other classes down to Class 6 will receive at least £400 or £200 in prize-money respectively.

Why is this being done? Initially, I thought it was purely for the obvious reason of providing additional prize-money for owners, and particularly providing additional reward for placed horses. As readers of the blog will know, I’ve advocated for some time that there should be much greater focus on placed horses, both in terms of prize-money and the whole owner experience, with racecourses being encouraged to acknowledge the performance of these horses even though they haven’t won or even come in the first three or four.

My second initial reaction was that while really appreciating the additional money, it is still unlikely in many instances to cover the costs of sending a horse to the racecourse. In another blog I mentioned a horse I was involved in, who ran really well at Wincanton in a 17-runner handicap to finish 4th, but where the prize-money was still only £238.50. When you consider the NH jockey fee of £161, riders’ insurance £21, entry fee of say £50, transport of c. £300, lads’ expenses of £50, racing plates at £70 plus my own costs of driving to the course and back of £50, then the total is more like £700. While enjoying the day out at Wincanton (which is one of my favourite tracks), the returns are clearly out of kilter with the costs ….. even with an additional £300 if the race was eligible for the new extension in prize-money (which it wasn’t).

So I decided to contact Ruth Quinn to seek her views. Interestingly from her replies to me it is now clear that the main logic of the extension to prize-money is actually all about trying to impact owner behaviour so that horses are run more frequently. Increasing the number of runs per horse could help significantly improve the overall competitiveness of British racing, boost field sizes and betting turnover etc.

Paul Bittar, former CEO of the BHA, was a strong advocate of owners running horses more frequently. Personally I think this is a complete non-starter, as do our trainers. Surely we all run our horses as often as makes sense for the horse, taking into account their wellbeing, suitability of going, race targets etc. Would I really encourage my trainers to run a horse more frequently, purely because there is a possibility of picking up an extra £200-400 of place-money – and equally, would they advocate the same?

Notwithstanding the point raised above that even if I did run I’d be losing money, but the horse would be unable to run for at least another three weeks. Let’s say the horse ran well and came 4th in an eligible class 4, I’m still only going to win a maximum of about £600, but with the cost of those three weeks’ training fees and all the running costs coming to, say, £1,500, I end up in an even worse position being £900 out of pocket.

If anyone can see a flaw in my logic, do please let me know! If there isn’t such a flaw, then why on earth do the racing authorities believe that owner behaviour can be influenced by such paltry amounts of money?

I’m going to be very interested indeed to see how the scheme works, and whether it does have any behavioural impact. As you can see from this note, I remain deeply sceptical and, I have to say, rather perturbed that there appears to be such a huge gap in thinking and practicalities between trainers / owners and those who want (quite rightly) to improve the competitiveness of British racing. Surely this scheme can’t be part of the solution ….. even though I always welcome every little increase in prize-money.

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.

Sunday 1 March 2015

Complete Agreement with the Mighty Mullins on the Goal of Doubling Prize-Money …. But definitely not just for Grade 1 races at the Festival

Only nine more days of waiting for the commentator to declare: “And they’re under orders now for the 2015 running of the Supreme Novices’ Hurdle” ….. and the hair-tingling roar of the crowd. The mere thought of it is having me box-walking far more than even our super Flat three-year-old, Jolievitesse.

Last year I was foolish enough to make some predictions of winners and have no intention of repeating that catastrophe, so I was more than grateful to see a very interesting piece in the Racing Post with Willie Mullins demanding that more is done to reward jumps owners at the Cheltenham Festival. The most interesting comments were: “The prize-money in jumps racing, given the costs, does not make sense and it cannot last. That, to me, is not fair and it’s not on for what owners do for the sport of racing. The meetings are there, but the prize-money should rise. All we see is the prize-money edging up a bit every year …. Prize-money for the graded races at Cheltenham could be at least doubled, if not more. It would give meaningful prizes for racing horses. Someone should really break out and say, ‘We need to reinvigorate the sport’, before it goes down. The bottom end of racing is disappearing.”

A lot of our friends and owners would do anything rather than follow blogs and Twitter. Those who do will have seen that Willie Mullins’ comments triggered an avalanche of views, both positive and negative. These are some typical examples from the ether:

“So often prize-money barely covers the van costs and entry fees. Mr. Mullins is dead right.”

“The bottom of the market needs the extra prize-money, not the top end.”

“Owning a horse is a choice. How far do you push the financial remuneration for indulging in a hobby?”

“If there are no owners then the people who work in racing lose their jobs. The sport needs to be sustainable.”

“Before we start stuffing more money in Willie Mullins’s and Rich Ricci’s pockets, let’s have more money for the little guy who runs his horses at Fontwell, Ffos Las, Towcester, Carlisle and Catterick.”

“Willie Mullins is absolutely right, the prize-money needs to be increased even just for running and finishing in a race at the Festival, as it is the owners who pay for and keep the show on the road.”

There were certainly three clusters of comments: the whole of the sport needs more money, and prize-money should definitely be increased at the lower end; racecourses and bookmakers make a huge amount of money out of the Festival, and more money should flow back; and a concern that trainers of the stature of Mr. Mullins and his rich owners are more than prepared to invest huge amounts of money, so much so that it is disincentivising the average owner. On balance I agree with all these views, to the extent that I fired out ten Owners for Owners views on prize-money into the Twitter space. (I can hear the comments of “Get a life!”)

  1. Willie “Double the Prize-Money at Cheltenham” Mullins’ view is one we definitely support, but on a far broader basis …. it needs to happen everywhere.
  2. Prize-money should be a top three priority of the BHA, to double prize-money by 2020 # racing needs a more strategic approach.
  3. Owners invest £0.5bn a year in British racing. Return on ownership is 25p in the £. # make ROO a strategy of the BHA.
  4. Boost it from the bottom up. The ordinary owner is giving racing up, not the Rich Riccis. # time for step change in strategy.
  5. Get real on costs vs. rewards. One of our horses wins £250 for coming 4th in 16-runner race. Cost £600 to race him.
  6. Does racing want more or fewer horses in training? If more, you need more owners. # boost the cash: boost the owners.
  7. What is the optimal number of horses in training? Does anyone know? What is the BHA view? More: the same: or fewer?
  8. Once there is a BHA view on optimal horse / owner numbers you can align prize-money to that goal.
  9. Without the owners there is no racing. They are the #1 stakeholders in the sport. # treat them better and the sport is strong.
  10. Make the lowest place-money at least cover the owner’s costs. Start from that position and work back to win-money.
As you can see, quite a blast of views. Doubtless we’ll be covering them in far more detail through the blog.

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.