ROA National Racehorse Owners Survey – Part 2, Identifying the Key Factors in Acquisition and Retention

My wife and I were lucky enough to be at our favourite racecourse – York – to watch the Nunthorpe, won in devastating style by Mecca’s Angel. Such a tough horse, and a superb buy at only 16,000 guineas out of Book 2 Tattersalls October Yearling Sale in 2012. She is the first filly to win the Nunthorpe twice, and it was a delight to watch the turbo-chargers kick in as she scorched through the final furlong. David Metcalfe, the owner, was clearly delighted and the whole experience was everything that owners aspire to. In a rather less restrained celebration, the Here For The Craic partnership couldn’t believe their fortune when – every syndicate’s dream – Heartbreak City won the Ebor for Tony Martin. These results, and the York racecourse experience, sum up what brings owners into the game and keeps them there.

However the backdrop for the first National Racehorse Owners Survey (summarised in the blog on 15th August) is the ongoing decline in ownership since the financial crisis of 2008. Numbers coming in were lower than numbers going out in seven of the last eight years, although encouragingly there has started to be some improvement recently.  The headline messages from the survey, of over 2,200 current and lapsed owners, include:

• 73% of owners start out with others, particularly friends, family or through a syndicate.
• 53% of owners say that speaking to a trainer or visiting a yard is the most influential step in their decision to own. However, 44% of owners say that there isn’t enough information available on costs, income or prize-money in the public domain to make that decision.
• 45% of current owners would increase their number of horses in training if prize-money increased.
• 44% of lapsed owners cite facilities and treatment of owners at racecourses as a key factor in their decision to give up ownership.
• Three out of four lapsed owners would return to owning if the circumstances were right.

The survey has been analysed under three main themes of the owner, the trainer and the racecourse experience. The more the results of the survey were examined, the more it became clear to us that the factors bringing owners into the sport are not necessarily the same as those that drive them out. This is illustrated in our diagram below, while drawing on the survey’s findings.

A Dual Industry-Wide Strategy is Required: Attracting AND Retaining Owners

 

 

Doubtless the analysis and conclusions from the survey will feed into the BHA’s Strategy for Growth and all the operational planning associated with its implementation. Our recommendation is that in the light of the dual factor model outlined, there needs to be a similar dual strategy with different goals and interventions. Acquiring new owners is closely linked to marketing, PR and timely, detailed and transparent provision of information about ownership, particularly while potential owners are visiting trainers. Retaining owners is much more challenging because of the inevitable disappointments of ownership, the high relative costs and dissatisfaction with racecourse facilities. It is essential that the industry doesn’t just concentrate on marketing and PR campaigns, but addresses properly the financial and experiential factors driving unnecessarily high owner churn rates. Indeed we would argue that this should be the prime strategic imperative of the BHA’s Strategy for Growth. 

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“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.

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.