All Change with the Final Owners’ Opinion Blog – But don’t worry, we’ll be continuing the campaigns under the Keep Owners in Racing banner from 1st January

When we set up Owners for Owners back in 2012 as a not-for-profit organisation, our goal was to encourage owners to get together to share the costs, risks and pleasures of owning racehorses. We’ve had a lot of success, not just with the racehorses on the track but also with the super friendships across the network of owners we have built up. Long may that continue! We’re currently working on a complete rebuilding of the web site, www.ownersforowners.co.uk, which we hope will be live by 1st January. The current web site will then be archived, so if you would like to download any materials from the site, please do so during December.

However, our campaigns to secure a better deal for owners will most definitely continue. We’ll be using the www.keepownersinracing.com web site for this, and as you may already have seen, we’ve been creating lots of reports, blogs and films to promote the cause. Here are two of the latest KOIR blogs.

Get Counting – Time to Register Every Owner and Properly Understand the Ownership Base

An entertaining article by Peter Scargill from the virtual Racing Post Arms suggested a tiered system of ownership for segmenting sole owners from syndicate members on the racecourse. This is a sensible suggestion but it needs to be underpinned by data otherwise it could have a negative impact on the overall level of ownership.

Surely nobody would argue that a syndicate member with 5% of one horse should enjoy the same on course privileges as a sole owner. But what about the syndicate member who owns 10% of ten horses or an individual who owns a leg in four horses?

The sensible way forward is for all the % shares of each owner to be aggregated and for the resultant data to drive a multi-tiered/ segmented ownership hierarchy. For example , Platinum for those owners with the % equivalent of five horses or more, Gold for those with 100% or more, Silver for those with 50% or more and Bronze for the rest. Racecourses could determine which level of ownership status would gain access to Owners & Trainers facilities on certain days. For instance, with an ordinary midweek meeting the racecourse might grant access to all ownership levels but a big Saturday meeting might allow just Platinum and Gold. Indeed, such status levels could increase ownership by encouraging owners to buy extra shares so they could get to the next level.

But there is a huge problem.

Racing cannot set sensible thresholds for ownership status because it doesn’t currently know what thousands of its owners actually own. There are around 35,000 owners in the UK but only 14,000 are registered and even being registered only provides a partial picture of what an owner actually contributes to the sport. I’m involved in 19 horses but am the registered owner of just one of them. The sport doesn’t know what I own in total. I’ve been a member of the ROA for five years but they haven’t a clue either. I know scores of other owners who are investing £50k+ a year in the sport yet don’t appear on it’s radar. So taking the simplistic but ultimately flawed option of tiering ownership on a sole owners v the rest approach could cause British Racing to lose large numbers of owners who invest substantially in the sport.

The answer is simple. Every owner and every share they own, no matter how small, MUST be registered. This would reassure owners that they actually own what they think they own and would enable the sport to finally understand its ownership base. Then, and only then, could it introduce a tiered ownership approach safe in the knowledge that it understands the value of every individual owner. The inevitable complaints about extra bureaucracy and administration should be ignored because the prize for the sport is so much greater.

Ownership Strategy: What Do You Think Of It So Far? – Rubbish

In the last couple of weeks I’ve spoken to almost as many journalists as I’ve had bottles of champagne to celebrate winners – and I’ve had a few! A number of articles have come out already, in the Daily Telegraph, The Guardian, and the Racing Post. The theme is the Ownership Strategy, or rather, its absence, despite the sudden release of almost 200 pages by the ROA on 3rd November – not a bad day to bury voluminous information, as it was the US Presidential election and two days before lockdown.

Incredibly, the biggest document, an 166-page slide pack, was produced in 2017, so why on earth it has not been publicly released before is beyond me. The Horsemen’s Group are passionate about transparency but not, apparently, when it comes to their own discussions and decision-making. This document passes the first part of my “half-life test” for British Racing decision-making, i.e. three years to produce a report, followed by three years to bury it. I could not help but quote Eric Morecambe! They are beautiful documents from a design standpoint but “rubbish” from a strategic perspective. Here’s why:

1. Is there a strategy? The greatest academic in strategy in the world is Professor Richard Rummelt of the University of Southern California. He describes most strategies as “garbage”, long “laundry lists”, “statements of desire” that avoid dealing with the small number of difficult, complex, critical issues; peppered with a huge number of “f” words – “fluff” and “flannel”. All the ROA documentation confirms is that they have not produced a strategy, despite being paid £1.2m to do so.
2. Is it an Industry-wide Ownership Strategy? No. Somewhere along the line from 2017 it has morphed into what, in effect, is an ROA membership drive. I have no problems with the ROA trying to attract more members, but they were given the task of finding out ways of retaining and attracting owners to the sport, which is not the same thing.
3. Is it capable of being implemented? As there is absolutely no plan of campaign, no road map, no targets or deliverables, no resource plan or funding model, you quickly conclude that the answer is “no”.
4. Has the so-called “strategy” been scrutinised? There’s no evidence to say that it has. While doubtless a number of individuals are aware of these documents, there has been no challenge process and therefore the ROA has not been held to account. Indeed, and going somewhat further, if you asked the board members of the ROA under oath about their sight and scrutiny of these documents, I believe that some would confirm that they weren’t aware of them until 3rd November. A board is there to hold the chairman and chief executive officer to account, and there seems to have been a serious breach of governance here.
5. Is the industry engaged? No. Indeed, if you ask anyone, in any position (outside the ROA, of course) in British Racing whether they understand or are committed to the ROA’s ownership strategy, they will come out with an identical response: “What is it? I haven’t seen it.” In a sport as territorial as racing, it takes some doing to produce such unity.
6. Has racing and the Levy Board received good value for money? It most definitely hasn’t. This is one of the most worrying features of the investment made, and one that the Keep Owners in Racing team intend to raise with the chair of the BHA, Annamarie Phelps, later in the week. If it’s not a scandal, it’s certainly a fiasco. We will also be pressing for a change of leadership of the ROA.

Back to Eric Morecambe. Did you know that his real name was Eric Bartholomew? Although he was born in Morecambe. That’s you now primed for quiz night for whenever we’re allowed back into pubs again. Do stay safe and well throughout the next lockdown period.

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.

Why it’s Time for British Racing to Develop a UK-Wide Syndicate Strategy to Grow and Retain Owners for the Sport

In the last blog, a number of priorities were flagged up for the new Chair of the BHA, Annamarie Phelps, who took up the leadership position on 1st June. I’m sure by now she’s only too aware of the big challenges facing racing and the key questions that need to be raised, and then answered. So for example, what are the major sources of funds that will guarantee the viability of the sport (the last blog echoed Steve Harman’s call for action with regard to the next stage of Levy development); does the expansion of the race programme continue (as the new CEO of the Racecourse Association advocates), or is it reduced (as the Horsemen’s Group would probably prefer); what are the priorities and funding implications of the new ownership strategy being developed by the Racehorse Owners Association; what are the ethical and integrity issues that need to be addressed as part of risk mitigation for the sport; and how are the problems of recruitment, retention and welfare of racing staff to be resolved? Doubtless there are also many other pressing concerns for Annamarie’s first 100 days.

All those questions are relevant for someone taking a top-down perspective on racing. Obviously in Owners for Owners we’re immersed in the day-to-day of grass-roots owning and syndication. However, in this blog we’re trying to make the link between the top-down and bottom-up perspectives in the context of syndication.

We’re members of the Racehorse Syndicates Association, which is actively promoting ongoing improvements in the ownership experience so that syndicate members are attracted into the game and retained within it. As part of that promotion, several important and little-appreciated facts are being publicised. It should be said that the numbers are only estimates, as absolutely no-one anywhere in racing has accurate facts and data on the importance and contribution of syndication to British Racing …. and that says everything, doesn’t it!

• Insight 1: there are 2,500 syndicate organisers in the UK. Assuming ten owners on average per syndicate, that is 25,000 owners. They are the unknown stakeholders of British Racing.
• Insight 2: the total number of horses owned by syndicate organisers in the UK is estimated to be 5,000. Assume that the expenditure with trainers, vets, jockeys etc. is £20,000 per year, that is £100m contribution to the racehorse training industry.
• Insight 3: if we assume that the syndicate organisers replace these horses every other year, and the average bloodstock price is £30,000, then the income for the bloodstock industry is £75m.
• Insight 4: the running of syndicate horses clearly makes an important contribution to competitive racing, betting turnover, levy and media rights. We have no knowledge of the quantum of this, but let’s estimate that it is £25m.
• Insight 5: if 2,500 syndicate organisers and the 25,000 owners is correct, and these owners visit racecourses once a month, spending £50 on each visit, then that is a £30m income for racecourses across the country from syndicates.
• Total annual contribution to British Racing from syndication is £230m.

At the moment, British Racing has no strategy focused on this important sector. As already mentioned, it has no meaningful data. It has little knowledge of the syndicate members, nor their needs and requirements. Faced with what is in effect a “black hole”, there must be a considerable opportunity to grow significantly the syndication of racehorses in the sport. In the past there have been one or two rather trivial attempts to promote syndication, of which a good example is the flawed “In the Paddock” web site that doesn’t even work properly. It all looks very amateurish and half-hearted.

Everyone in racing surely buys into the expansion of syndication. However, to do that there are a few much wider issues that need to be addressed, as highlighted in the diagram below. The left pyramid shows that there is an over-concentration of money at the top, while the grass-roots foundation, which is where the vast majority of syndicates are operating, is crumbling, with many trainers and owners struggling financially. One solution would be to change the ratio of prize-money between the top and the bottom of the pyramid. As a timely example, although we adore Royal Ascot as an event with all its pomp and circumstance, it embodies the elitist nature of the sport. That is not an argument to change Royal Ascot, but we believe that far too much money is concentrated into the top races, and therefore goes to the top owners, trainers and breeders. We need more money for the grass roots. In the right hand diagram, the point is also emphasised that any realignment of prize-money should flow to the races that are the most competitive and generate the greatest betting levy. I wonder whether that data is readily available ….. or is it another black hole?

On a personal note, we’re involved with the RSA in the launch of the first-ever Syndicate Sunday at Stratford-on-Avon Racecourse on Sunday 21st July, and hoping it will be really well supported by trainers and syndicators across the country. We’re determined to celebrate the success of syndication ….. and raise a glass to its expansion.

Fundamentally Changing the Ownership & Prize-Money Pyramid

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.

Welcome to Annamarie Phelps, New Chair of the BHA. Top of the In-Tray – Finances, Funding and the Levy. Oh Yes, and Racing’s Leadership Behaviour and the Need to Curtail the In-Fighting.

Annamarie Phelps commences her new role today as Chair of the BHA. I’m sure everyone in British Racing wishes her well and is hoping for a really successful new phase for British Racing under her stewardship. She is a former Olympic rower, current Vice-Chair of the British Olympic Association, and replaces the temporary incumbent, Athol Duncan. She is a recognised UK sports figurehead and, when she was appointed, the BHA underlined her main expertise “in dealing with complex political, regulatory and multi-stakeholder projects and initiatives” through her “impressive leadership skills and astute grasp of the issues facing major sports, including their engagement with government”.

I’m sure she doesn’t need me to teach her anything about leadership, but I’ve never forgotten the chairman of a major pharmaceutical company who raised his left hand in front of me one day in my consulting career and explained that you never need more than five fingers to prioritise the key strategies for any business. His view was that the challenge in a new chair’s first 100 days was to identify the three critical strategies that would really make a difference to the organisation, and then to drive them forward through the two main enablers of leadership and any necessary changes to the operating model. Rather menacingly, he then raised his right hand and said that over the 100 days you always discover the five leaders who are the blockers, robber barons and doom merchants. Indeed, I can still remember one hapless individual at this chairman’s leadership conference who, during a plenary discussion, announced that there was no way he was going to support a particular initiative: “over my dead body”. The chairman gave him a withering look and proclaimed, “It can be arranged!”

So I’ll be very interested indeed to follow the impact of the new chair during this initial 100-day period. I’ll be even more interested to find out whether any changes occur in the leadership of our sport. Unfortunately over the last 12 months there has been a shocking outbreak of in-fighting and negative behaviour within the top echelons. Although the chair of the BHA has limited authority over most of the stakeholder groups, there is certainly a need to knock a number of heads together and focus on the key priorities and opportunities.

Two very interesting articles appeared recently in the Racing Post, one by the former chairman of the BHA, Steve Harman, entitled Time to talk up racing’s future and kick on with levy development, and the second from trainer Jamie Osborne, Funding farce underlines urgent need for racing to conduct a radical re-think. Steve’s article was both optimistic and a notable call for action with regard to the next stage of levy development, while Jamie advocated the need to “stop the blame game and start thinking radically”. I’m sure both were designed to coincide with the arrival of the new BHA chair.

Steve’s article was persuasive and compelling. While some pundits in racing have dwelt on the “black hole” of the cut in FOBT stakes and its impact on media rights, his focus was on the need for racing to concentrate on £115m of funding that can readily be secured through self-help opportunities exceeding £50m per year and levy development worth a further £65m+. It certainly convinced me, and is definitely one of the fingers on the strategy hand. It is worth examining in more detail.

Without doubt, one of Steve’s most important contributions as BHA chair was the development of excellent relationships with the many politicians who are now key advocates of racing, both inside and close to Westminster. These include prime ministerial candidate Matt Hancock; Jeremy Wright, his successor as culture secretary; Mims Davies, Sports Minister; former Sports Minister Tracy Crouch; Helen Grant, Vice-Chair of the Conservative Party; and George Freeman, ex-Head of the Prime Minister’s Policy Unit. In particular, Matt Hancock had assured Steve that racing would not suffer as a result of FOBT changes, and gave a strong commitment to examine further levy development once the FOBT changes had bedded in. However, and crucially, to trigger the next stage of that development there were conditions that had to be met. In particular racing had to show self-help in a number of designated areas: building a strong global Tote, making further progress in industry recruitment and retention, further developing the equine welfare and staff welfare agenda, improving the balance of British-bred horses, pooling media rights, growing participation in the sport and meeting good governance standards.

Throughout Steve’s piece there was frustration that racing isn’t delivering on what is required to trigger further developments to the levy. It is almost as if racing doesn’t believe that Westminster will keep its word and ensure that racing doesn’t suffer financially from the changes made to FOBT stakes. The need for speed and leadership came through strongly if racing is not to stumble into a crisis of its own creation: “ …. we should be talking opportunities and growth. This industry has proved what it can do regarding levy reform. Racing needs to articulate a compelling message about growth and jobs, with great campaigning supported by quiet lobbying with our influencers.” Furthermore, “The clock has been ticking. Jobs in this industry depend on this. Anyone doubting the promises, prospects or scale of levy development needs to be corrected.”

Jamie Osborne’s concern was the lack of transparency and finger-pointing between racecourses, bookmakers, owners, horsemen and regulators. Without any doubt the financials of racing are far too opaque, and opening them up to scrutiny in a more coherent manner would be one heading in the operating model of a new racing strategy. Jamie also argued for “a radical re-think on the balance of commercial power”, which is code, I’m assuming, for scrutiny of the amount of money taken out of the sport by bookmakers and racecourses, leaving so many at the grass roots of the industry impoverished. The key message was that our funding model isn’t working well and there is a tremendous need to make the “revenue pie” bigger - another initiative for the strategy hand.

In the next blog I’ll examine a number of other priorities for British Racing, as well as the constraints that may severely limit the new chair’s freedom to act. This will also examine how the commercial value of racing is created, and the tensions that now exist in the way in which it is apportioned – definitely subjects for the left hand of strategy.

So as one former rower (indeed, having won the Mays bumping races at Cambridge and rowed for the Varsity) to another, I wish Annamarie well.

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.