Tuesday 28 June 2016

Some Quiet Reflection on Royal Ascot, Timeless Art and Brexit Independence Day …. if Possible

Although I’ve been involved in Flat horses with seven trainers including the likes of William Haggas and Richard Hannon, in Owners for Owners we only have one Flat trainer and that is Karl Burke. I’ve had horses with Karl for 11 years now, ever since I came into ownership, and it says everything that we’ve never once had a disagreement. Even when Karl was harshly forced into exile for a short period, we stayed with the yard to support Elaine and the family. We got off to a great start through David Redvers (pre-Qatar Racing days) with a lovely, fast filly called Swift Princess who won for us, was sold for more than we paid for her and is now a successful broodmare in New Zealand. I’ve had double the winners with Karl of any other trainer and only a week or so ago we had our latest when Timeless Art won a valuable £15k handicap up at one of my favourite racecourses, Ayr.

Yet at the start of this Flat season nothing seemed to be going right. Our horses all disappointed when they came out, and March and April were a tough time for Karl and all his owners. As always with racing patience has paid handsome rewards and the yard has been flying through May and June, not least at Royal Ascot where the magnificent Gr.1-winning performance of Quiet Reflection in the Commonwealth Cup was the highlight of the week. It was Karl’s first Royal Ascot winner, first Gr.1 in the UK, first Ascot-winning ride for new stable jockey Dougie Costello in his first season on the Flat and first winner at the Royal meeting for the syndicate that part-owns the horse, Ontoawinner. As one of them said afterwards, “We’re proud to be Yorkshire. Proud and loud!” The joyous scenes after the race were wonderful to behold, and sum up every owner’s aspirations. It now looks as though Quiet Reflection may head for the Darley July Cup at Newmarket on 9th July, and then onwards throughout the year to Champions’ Day back at Ascot.

I’m sure that Karl’s yard will be over-subscribed in the autumn. We’re definitely buying another yearling, so if you fancy getting involved, do let me know as soon as possible. One of Karl’s many accomplishments is the rare ability to spot good-value talent at the sales, and I would never consider buying a horse for the Flat without him being there. If you’d like to come to the sales with us in the autumn, you’re more than welcome.

Among many highlights of Royal Ascot, Lady Aurelia was simply outstanding in the Queen Mary, winning in a time 3 seconds faster than Profitable in the King’s Stand. She simply blew the field away, and I doubt if I’ve ever seen a more impressive 2yo performance. Indeed the only other similarly stunning performance I can recall is Frankel winning the 2000 Guineas. Delighted to see Order Of St George win the Gold Cup and give Aidan O’Brien his 7th victory in 11 runnings. He may go to the King George, but I’m actually more interested to see whether he can do what Ardross, Westerner and Yeats failed to do – win the Arc as well as the Gold Cup. Thinking of the sire of this horse – Nigel Twiston Davies made me laugh after his son Willie won one of the handicaps for Alan King and then the other son, Sam, won two at Ffos Las that evening. He said: “I’m the new Galileo!”

Another trainer who I always find amusing, Sir Mark Prescott, shared his view on the Brexit vote with his comment on Farage: “I wouldn’t follow him down a footpath!” Having said that, clearly a really momentous decision was made by the British electorate. Maybe a small but nevertheless a clear margin voted for exit from the EU on a strong turnout of 72%. It was amazing that the bookmakers got it so wrong, with 1/10 for remain. As expected there was immediate market mayhem with the Pound plummeting to its lowest value since 1985, a big drop in equities and then the political fall-out with Prime Minster Cameron resigning, and as I write this blog, half the Shadow Cabinet doing likewise.

Superficially it seems to be a seismic vote against elites and the establishment, with deep divides between the old and the young, rural and metropolitan; London, Scotland and Northern Ireland vs. the rest of the country. It doubtless has the potential to put 70 years of European integration into reverse, and there are profound implications particularly if it triggers other countries to vote against the dead hand of Brussels bureaucratic centralisation. Personally I’ve felt for a long time that the EU fails to provide any real competitive advantage for Europe and that their operating model is no longer fit for purpose. Here’s hoping that the politicians can provide the leadership, both in the UK and across Europe, to drive a new arrangement fit for the 21st Century.

And finally of course this decision is bound to have an effect on British racing. One of the big gains of the BHA in recent years has been the development of strong contacts with government and in securing their commitment to the replacement of the Levy. Hopefully the strength of cross-party backing will ensure that this continues. It may be that the exit vote may make it easier to reform the Levy and also offshore bookmaking. It was noticeable that shares in Ladbrokes and William Hill dropped like a stone in early trading after the result was announced.

It's too early to say what the effect is going to be on employment law, immigration policy and recruitment of stable staff from overseas, the breeding industry that currently receives payment under the European Common Agricultural Policy, the movement of horses and trade at the sales with a weaker pound.

Doubtless after some quiet reflection over the next few months we’ll find that the advantages for British racing are greater than the disadvantages. Here’s hoping, anyway.

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Wednesday 15 June 2016

Rapidly On From Epsom to Royal Ascot – and Will We Soon See Luxury Hotels on Racecourses?

Once again going into Epsom there was a feeling that there might not be any truly outstanding horses running, but I think that view has changed following a number of superb performances, not least from Minding, Postponed and then a little bit behind them, Harzand.

A number of us were lucky enough to have a visit to Coolmore Stallions in Ireland recently, with a couple of our owners brave enough to pat the mighty Galileo. His daughter, Minding, showed great bravery and versatility, I thought, to win the Oaks having been brought almost to a standstill at the top of the straight. Aidan O’Brien was particularly effusive afterwards, saying: “Speed, class, stamina, a great mind. Real heart, courage and guts had to come into it, but she had it in abundance, like all the Galileos.” At least I’ve stood next to the great Galileo, even if I’ll never afford to buy one of his offspring. This was a particularly notable performance, as she had three demanding races in five weeks, winning the English 1,000 Guineas, coming 2nd in the Irish equivalent and then the Oaks. She looks an outstanding filly and it will be interesting to see if they bring her back in trip or keep her at 1m 4f. I could see her doing well in the Autumn, in the Arc.

Postponed has long been a favourite of mine, and he just seems to be a horse who is getting better with age. By the magnificent stallion Dubawi, he was outstanding in the Coronation Cup and presumably will now be targeted at the King George. He is currently the Arc favourite. Sea The Stars has rapidly established himself as a top stallion, and his son Harzand won the most valuable race ever staged in the UK in this year’s Derby. Amazingly it was the first win in the race for Dermot Weld, who has been a hero of mine for decades. One wonders now whether his owner, the Aga Khan, will consider having horses again in the UK. It just shows again that once a late-maturing colt really starts improving, he can take huge strides forward.

By the time this blog comes out, we will be a couple of days into Royal Ascot. Surprisingly, rather than commenting on the racing, my eyes were drawn to an article in The Times on Monday entitled “Ascot considers betting on a hotel to attract year-round big spenders”. A friend of mine, particularly when he has had a few drinks, often quotes Peter Kay from Phoenix Nights: “Garlic bread, it’s the future, I’ve tasted it!” That had me thinking that in some ways racecourses in the UK could easily redefine themselves and their assets by branching out into other related sports and leisure activities. It is easy to think that racecourses don’t really change that much, but if you take an historical perspective, the evolution has been enormous. As indeed has been their demise. I looked up the number of racecourses that have actually closed, and was staggered to learn that 186 have gone through the 19th and 20th centuries, many as a result of housing and property booms. You only have to think of Bromford Bridge in Birmingham, Alexandra Park in London, Castle Irwell in Salford, Hurst Park in Surrey and Gatwick.

Guy Henderson, the Chief Executive of Ascot, is convinced that the track is such a magnificent site that a hotel could be a real game-changer, despite the considerable capital investment. He indicated that they may look for a partner to explore the options for the site. As it is, Ascot is a highly profitable course and their annual revenues were up 10% to £75m in 2015, with profits rising by nearly 11% to £18.7m. It is easy to see top-end racecourses going down the housing and hotel route with Newbury’s ongoing redevelopment an obvious example.

All that I am hoping is that the financial re-engineering and redefinition of racecourses such as this results in substantial additional funding for owners’ and trainers’ facilities. There is no reason why the two cannot co-exist, as Ayr demonstrates so well throughout the season with the marvellous lunches provided in the Western Hotel. So maybe this is an emerging element of the future of racing. Maybe not as popular as garlic bread, but significantly more sophisticated.

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.

Wednesday 1 June 2016

Woeful Weatherbys Fall at the First Hurdle of Technology Change Management – The Frustrating Shambles of their Online Banking Upgrade and Worrying Concerns for 2017+

In the last blog I was very supportive of the statements that Richard Wayman made at a recent BHA strategy forum at Newbury on 1st March relating to a major innovation led by Weatherbys to streamline ownership administration from 2017. He assured the audience that the changes “will put the customer, the owner, at the centre” of the exercise. It would be easy to say, “about time too”, because racing administration is far too expensive, over-complicated and a real burden on those who have to deal with it. Indeed, needlessly costly and frustrating administration is a barrier to owning and one factor contributing to owners leaving the sport.

You may know that Weatherbys is a privately-owned company established in 1770. It has 16,000 customers (12,000 racing clients and 4,000 private) and its latest accounts show that it made profits of almost £6m on income of £18.5m. One element of its work is to provide British racing with its central administration under a sole source contract with the BHA. The fees that they charge are not only a source of profit to Weatherbys but also co-fund the BHA. This is hardly guaranteed to drive significant transactional and cost efficiencies. Furthermore, I doubt whether its actual competencies in modern integrated transactional processing have ever been market-tested. It may do a marvellous job with the Stud Book, but that doesn’t guarantee that it has the expertise to design, launch and deliver a modern, owner-friendly, online administrative system.

A project has been running in Weatherbys for over five years to simplify ownership structures, integrate all the administration and transfer it on to this online system so that racing finally moves into the modern era with a highly user-friendly process involving minimal paperwork and easy-to-operate technology. In Owners for Owners we are really looking forward to the system being launched in 2017 – not least my wife who has the unenviable task of doing all our OfO racing administration and VAT reclaims. It is obviously essential that this project is a real success, otherwise it will generate considerable owner negativity, which is what Weatherbys’ latest online banking upgrade has done. At least four success criteria need to be met from a change management perspective and, alas, I’d have major reservations at the moment that Weatherbys can meet them.

  1. Owner pull, not Weatherbys push. Whatever system is designed must meet the explicit needs for simplicity and cost-effectiveness of different types of owner. They are the primary stakeholders. Administrators and technologists at Weatherbys’ HQ need to view all changes through their eyes, and not just push out a system that may or may not be fit for purpose.
  2. Intuitive, simple and workable. The average age of owners is 57+. Many are not particularly technology-literate and are doing administration from home, where broadband may not be super-fast, and computers and software may not be the latest versions. The new system must be easy to use, operable from home and with a “look, touch and feel” that is owner-friendly and intuitive. 
  3. Properly tested. It is incredibly easy in process redesign to have frequent delays that put pressure on planned launch dates. The critical time for stakeholder testing is often skimped. Initial versions are launched too early. Owners must be actively involved in testing the system and have veto rights, with the ROA central to this and ideally the overall project sponsor. Never launch a system such as this until success is guaranteed. 
  4. Dramatically reduce cost and complexity. There is far too much paperwork, much of it confusing and repetitious. Delays and errors easily creep into the system. It is slow, costly and stressful. Weatherbys and the BHA should set clear improvement goals, e.g. to reduce racing administration total cost to £100 per owner, per horse; or to have every registration necessary on a one-page form that only has to be inputted once. So what went wrong with the recent Weatherbys online banking upgrade? It doesn’t appear to have had any testing whatsoever; no-one appears to have known much about it prior to launch, and it clearly wasn’t ready, as a number of modifications have already been necessary. Registering a new password and PIN number was far too laborious. Logging on to the new site takes about four times as long as previously, taking 21 key strokes. The new site was designed to enable the user to carry out tasks in one place. In practice though, and particularly if you are operating a number of accounts for different horses, it can be easier to carry out tasks separately by account. In other words, go on the site, select the account you want to operate, check the balance and recent transactions, pay the bill and move on to another account rather than checking balances in one section and then moving on to pay a lot of bills in another. The real disaster though came with the bank statements. Before, my wife had checked these, updated her spreadsheets, filed the VAT returns and received any refunds due by the middle of the month. To her dismay there was no VAT column on the new statements so it was just about impossible to do the VAT return without a separate spreadsheet being emailed to her. When she received this it was a very rudimentary document …. and so the story went on. We have documented a number of these other issues and sent them on to the ROA for discussion directly with Weatherbys.

The big picture on all of this is that if Weatherbys are going to be the lead body for the major administrative changes coming in in 2017, then they must adopt an owner-led change management process. And then on the smaller picture of the detail of all the procedures there has to be far more active testing. If Weatherbys aren’t up to the job, then this whole administrative task could be a prime candidate for market-testing and outsourcing. More about the argument for this in another blog, even if Queen Anne might well turn in her grave at the thought of Weatherbys losing its time-honoured right to manage so much of British racing.

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.