Wednesday 1 April 2020

Coping with the Covid-19 Crisis – Massive Shock to the Country, the Population and the Racing Ecosystem

With eight years’ experience of writing the Owner’s Opinion blog, our 1st April edition normally writes itself. One strand is trapping the reader into an April fool (and you’d be surprised how many big names have succumbed), while the other is covering contentious issues from the Cheltenham Festival. This year, I suppose, the April fool would have been about owners offering to pay trainers their fees in toilet rolls; while I was itching to write about the dominance of top trainers at the Festival, not least the notable fact of 60% of the races (16 in all) being won by novices and the considerable advantage that these trainers have in being able to assess which horses are massively ahead of the handicapper. But the Prime Minister’s sombre announcement on Monday 23rd March that emergency measures were to be introduced to lock down the country quickly parked such irrelevancies.

As of the end of March, there have been 784,000 infections worldwide from the Covid-19 virus, resulting in 37,000 deaths. It took 67 days for the first 100,000 infections; 11 days for the second; four days for the third, and that miserable exponential climb is continuing. Some politicians, particularly President Trump, have been complacent in the extreme (at the end of January he commented that “We have it totally under control. It’s just one person coming in from China”, before expecting the US to be back to normal by Easter and even coming up with a mind-numbing comment that “People have died, who have never died before”). After a disappointingly slow and typically British response of “Keep calm and carry on”, during which the country wasted a vital three months of planning, testing and production of ventilators, the gravity of the situation has been fully embraced by the vast majority of the population through lockdown and social distancing. Sadly there have been 22,141 infections to date in the UK, resulting in 1,408 deaths, but this rate does appear to be declining slightly. We all pray that this trend continues, although the Deputy Chief Medical Officer, Jenny Harries, believes that it could be six months before all the current social distancing restrictions are lifted.

Is it really only just over a fortnight since we were cheering on Al Boum Photo in his thoroughly game back-to-back win in the Gold Cup? For virtually all of us, this will have been the most incredible few weeks of our lives. The lockdown has already had a profound impact on everyone, and the shutters have come down on almost every business sector. A whole plantation of money trees has been found, and an arsenal of fiscal bazookas launched: $2 trillion of funds in the US; €750 billion in the EU; and £330 billion in the UK. Central banks and governments have made it clear that “spend, spend, spend” is the order of the day and they will do “whatever it takes” to bail out otherwise viable businesses. We’ve had a national “clap session” for the NHS and 700,000 people have volunteered to help support them. This is definitely the UK at war – against a terrible virus.

It was inevitable, therefore, that racing would be abandoned. During the three days of 16th to 18th March we went from racing behind closed doors to total suspension. The same happened in Ireland on 25th March. Six Nations rugby was cancelled; the Dubai World Cup postponed to 2021; the Tokyo Olympics put back to July next year; and we won’t be cheering on the winners of the trio of Grand Nationals at Fairyhouse, Aintree or Ayr. The BHA handled the situation well and avoided the reputational damage which would have ensued if racing had struggled to carry on at a time of national emergency. As ever there were a number of strong counter-arguments, particularly from former BHA Chairman Peter Savill who felt that racing had missed a huge opportunity to engage a new audience and significantly expand betting turnover, while Mark Johnston felt that it was a “grave mistake to suspend racing”.

The £4bn industry of racing employs 6,500 racing staff, looks after 14,000 racehorses and directly supports a huge ecosystem of full-time and self-employed staff. The seismic shock of lockdown is still rippling through the industry and no-one can predict the damage that will be done to racecourses, trainers, bookmakers, sales houses, breeders, consignors, stable staff, jockeys, valets, bloodstock agents, farriers, equine physiotherapists, specialist vets, feed suppliers …. and of course owners, who for the most part will continue to pay out training or keep fees even though there is no prospect of seeing their horses out on the track in the immediate future. Encouragingly, though, there has been a massive collaborative effort from all the stakeholders in racing with a constant stream of advice and a multi-workstream “industry plan” focused on racing’s resumption. Racing seems to work best in adversity, and full marks to all the groups who have rallied round.

At a personal level I’m close to Martin Keighley’s yard and with the active support of key owners we created and implemented a business continuity plan that is now fully operational around two phases. The first covers the period from 1st April to 31st May, when the majority of horses will have been turned out into the paddocks and only a very small number being kept in training and “ticking over” so that if racing does resume they can take part at summer jumps meetings. The second phase is from 1st June to 31st August when hopefully most horses will return to full training and, most importantly, the full team will come back into normal employment after two months being furloughed under the government’s emergency funding measures. Every single employee, owner and supplier was briefed on the plan within 48 hours of its creation and there has been a hugely positive response – not least from Martin’s owners who have been tremendously supportive.

In some ways, although it has been a huge challenge for National Hunt yards – not least because such plans have led to a 50% reduction in income – it is more straightforward for them than for training colleagues on the Flat, all of whom were focused on getting their horses out on the track in April / May from the traditional start of the season with the Lincoln at Doncaster on Saturday 28th March. Do these trainers continue, or stand their horses down while awaiting more clarity on when racing will resume? The impact on the Racing Pattern cannot yet really be evaluated – what will happen to the Classics, and will Royal Ascot take place?

Very detailed planning has been taking place on the potential resumption of racing, although it is most unlikely to restart until the viral infection rate has begun to decline significantly. Apparently the plans include racing operating behind closed doors through regional hubs in the North, Midlands and South of the country with consecutive fixtures taking place at these tracks over, say, a week at a time, and it would be easy to imagine a considerable number of maiden two-year-old races and jumpers’ bumpers being held. These plans are designed to ensure minimal impact on the NHS, and there will be reduced field sizes and only the most experienced jockeys participating, to reduce the risk of injury. Essential racing staff and jockeys would stay at hotels (so it could be that the racecourses selected would be those with such facilities either on site or nearby) and the horses would be transported to each track daily.

The government has been encouraging the industry to develop such “self-help plans” so that racing is ready to return at the earliest possibility. Although there have been no guidelines on other plans, it is to be hoped that these will emerge soon, particularly on racing-specific financial support. In particular, the Levy Board sits on reserves of over £45m, and the Racing Foundation a further £82m, which could help considerably. In the meantime all the emergency financial measures introduced by the chancellor Rishi Sunak (who as the member for Richmond is well aware of racing’s requirements, not least in Middleham) have been seized on by trainers, racecourses, contract and self-employed staff, and also the BHA who have furloughed 200 of their 260 staff, saving £1m a month.

A crisis of epic proportions! It is to be hoped that most of us will emerge relatively unscathed, and the number one priority clearly must be the health and welfare of the population of the country. Survival is paramount, before we all turn our attention to restoring the country’s economy. The effects of the crisis are bound to be felt for many years to come, and the racing industry will be buffeted in the same way as most other business sectors. Let’s hope there aren’t too many casualties. Unfortunately the industry was not in good financial shape going into the crisis, and it’s hard to imagine it will come out of it without there being significant damage. In the short term – stay safe and stay at home.

At a personal level we will all be trying to find solace and ways of surviving the challenges of social distancing and isolation. Those who know me well are aware of my enthusiasm and passion for fine wine. My wife and I have introduced a weekend wine tasting of the very finest in our cellar. Last Saturday we savoured the delights of a 1999 Maximin Grunhauser Abtsberg Riesling Auslese, Cask Nr. 165, Von Schubert. It was sublime and awe-inspiring. They always say that you shouldn’t waste a crisis – and we certainly don’t intend to, on the vinous front. May you find similar pleasures.

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