Friday, 15 July 2016
“Vindication for Syndication”. How Owners for Owners Took On the Syndicate Industry and Won.
All our owners know that one of the most important guiding principles behind Owners for Owners is the determination to ensure that everything to do with owning a horse is fully transparent to them. We are passionate believers that owners must be completely aware of all aspects to do with the cost, performance and potential of the horse, and fully involved in every key decision that affects the horse and the partnership. This is covered in detail in our Partnership Principles, which we make available for anyone in the racing world to download without cost from our web site here. And, of course, a copy is given to every owner who is involved with us. Interestingly over the last couple of years I have had requests from people in other syndicates to use it, and I always allow that, with no charge whatsoever for the intellectual property. I have also circulated it to a number of leaders in the ROA and BHA.
When I first became involved in owning horses, well over a decade ago, I knew nothing at all about owning racehorses and went into it with a dangerous combination of naivety and enthusiasm. This brought me into contact with quite a number of commercial syndicates and I signed up with them without really considering any of the issues that affect most partnerships and most racehorses. I was, you might well say, “a lamb to the slaughter”. Again like many owners, I have had a wide range of experiences since: some good, but unfortunately many bad. I listed a number of the unacceptable practices found in syndication in the 15th September 2015 blog entitled As We Enter “Syndicate Season”, How Many of Them are Ripping Off the Owner?
It has been very interesting to experience the reaction of some of the bigger commercial syndicates to the stance I took. The syndicate industry had set up a group called the Racing Syndicates & Clubs Association (RSACA) and I was asked / summoned to go and see them two years ago because they had taken a strong dislike to statements made on our web site. In particular when we partner out a horse we emphasise our tremendous value for money and use phrases such as “buying into a horse with Owners for Owners reduces the cost per partner by around 50%, with huge savings merely by cutting out expensive racing managers with high administration costs, and not charging indefensible mark-ups on the initial purchase price of the horse”. You can imagine my surprise when I attended this meeting, to be told that I was “breaking the law” by making false statements. This was absolutely preposterous, and I spent a frustrating couple of hours detailing cost breakdowns for the Owners for Owners approach vs. a number of named, big syndicates. I even went to the trouble of writing up the analysis and entering into extensive correspondence with the RSACA. I failed to convince some of their leading players and wasn’t surprised when they blocked an application from OfO to join the group so that I could try to change the practices from within.
At about the same time I was invited to take part in the BHA’s Strategy for Growth pillar team on ownership. I wasn’t there to represent the syndicate industry, although again the RSACA didn’t see it that way. Throughout my work on the pillar team I argued strongly for partnerships, shared ownership and syndication to be given a much higher profile in the promotion of British racing, and helped put together the business case for an additional 1000 horses in training by 2020, many of which would be owned in these types of structures. I also felt that it would be difficult for the BHA and Great British Racing to promote syndication properly without the industry being covered more thoroughly by the rules of racing, with the promotion of best practice and greater transparency through a code of conduct and freely available templates and tools to support anyone setting up a partnership. I have carried on with that work over the last year, including taking part in an ROA-sponsored working group to create such documents.
When all this started, I definitely felt as though I was taking on the syndicate industry and experienced a number of personal attacks by those with vested interests in the status quo and a reluctance to adopt more modern syndicate practices designed properly to protect the syndicate member. So I was absolutely delighted to hear that a number of the old guard have moved on, and that the RSACA is now more aligned with the OfO approach. It is changing its name to the Racehorse Syndicates Association (RSA) and adopting a new constitution. There is a new, modern web site at www.racehorsesyndicates.org. Maybe this time round they will finally accept OfO as a member. While we definitely don’t see ourselves as running commercial syndicates (we help co-owners come together in partnerships), we would like to help shape the industry so that it encourages more participation in the magnificent sport of racehorse ownership.
All of this is definitely good news. Not everything in the syndicate industry is working well however, and I’m sure there will be clashes in the future. However I do feel that the stance I adopted has been vindicated. Furthermore Great British Racing is going to launch a promotion of shared ownership and syndication in the autumn, and I’m now far more confident than I was that new and established owners will get a much fairer deal, with closer involvement and hopefully more enjoyment. As a minimum they should be able to compare one syndicate against another in a transparent manner so that they can select a syndicate that is closely aligned with their needs. Here’s hoping that more owners come into racing this way and have a thoroughly enjoyable time.