Have the Racecourses Hijacked Our Sport …. and If So, What Should Be Done About It?

This blog has been triggered by an article in the Racing Post by Colin Russell, and subsequent discussion with a number of our owners who definitely agree with it. Basically, Colin argued that the power in racing doesn’t sit with the BHA, the bookmakers or Horsemen’s Group, but with racecourses, which “act like spoilt kids and don’t worry about how it affects anyone else”. He argues that they control the purse strings, as they sit astride most of the big flows of cash through Levy Board grants, media rights, gate money, sponsorship, owner entry charges, the Tote, bookmakers’ payments – and that’s before you even get to the additional contribution from the racegoers themselves, consuming expensive food and drink. Key decisions are being taken by the racecourses in their own best commercial interests rather than for racing as a whole, as illustrated by silly same-day race meeting clashes between local tracks such as Kempton and Lingfield, Southwell and Nottingham, Haydock and Chester. He believes that the Racecourse Association doesn’t care about this, and moreover the tracks pay as little in prize-money as they can get away with.

At times the article was clearly a bit of a rant, but the argument struck a chord and most people I’ve spoken to believe that the racecourses are definitely calling the shots. It seems that legally they own 1,200 of the 1,400+ race fixtures and therefore hold both the purse-strings and the power in the British racing landscape. Without any doubt this will be tested over the next few months as the BHA tries to implement the proposed tripartite agreement and more importantly the operating principles behind it. At the moment the RCA hasn’t signed up to this agreement alongside the BHA and the Horsemen’s Group. Several of the key issues that need to be resolved at a tripartite board revolve around racecourses and the way the fixture list operates. In essence the BHA has relatively low authority to influence this, so if you take as jaundiced a view as Colin Russell then, yes, there is a risk that the racecourses have hijacked our sport.

Earlier in the week, though, I was encouraged to see that Richard Wayman, Chief Executive of the Racehorse Owners’ Association, is moving across to become the new Chief Operating Officer of the BHA. I’ve worked with Richard on a number of projects and he is an extremely able individual whose natural style is highly collaborative. As he has been given the job of sorting out the fixture list, he is clearly going to be a very important power broker with the racecourses. Indeed I joked with him that he was offered three jobs – by the IMF to sort out the Greek debt crisis; by the UN to address the threats posed by ISIS; and by the BHA to create a more rational race programme. Full marks that he has gone for the most difficult one!?!

However I do think it is wrong to lump all the racecourses together and be critical of the lot. So I sat down to do my own classification and started slotting them into one of four groups: stars (the tracks you really like going to, and which offer a top-quality raceday experience), improvers (where substantial investment is being made), dullards (which are just coasting along) and exploiters (which are ripping off everyone). At the positive end of this scale, my top ten tracks would be Aintree, Ascot, Ayr, Chester, Goodwood, Haydock, Market Rasen, Newmarket, Sandown, York. Six of these are independently managed and four are controlled by Jockey Club Racecourses. My bottom ten are Bath, Brighton, Lingfield, Newcastle, Plumpton, Redcar, Southwell, Towcester, Wolverhampton and Worcester. This time none are JCR; three are independent and seven are under the dubious management of Arena Racing Company. And of course I haven’t flagged up some of the strong improvers such as Cheltenham and Newbury where millions are being invested at the moment.

As the Americans say about strategy, “it ain’t vanilla”. Different racecourses and different operators need different strategies and different levers of power to influence future direction. Every course is a business in its own right, while JCR and ARC are substantial players in the leisure market with hundreds of staff and multi-million pound budgets. As such they are open to a range of negotiating tactics, just like any other commercial organisation. The challenge for the BHA is to create a clear vision for the future shape of British racing, particularly in terms of the fixture list and race programme. Once the gap between the current position and the future requirement is clear, then the levers need to be applied to secure it. One end of the negotiating scale is collaborative but that shouldn’t preclude the other end, which is more aggressive. There are bound to be ways in which racecourses can be persuaded and / or forced to behave in the right way, for the greater good of the sport. After all, the BHA licences all racing establishments including racecourses, so why not introduce a range of criteria that need to be pursued and without which licences can be withheld.

This subject is definitely one of the top three issues facing the sport and its future success. We wish Richard Wayman all possible success in the new role that he will be playing to bring about some of the necessary changes.

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.

Will 2015 be the Year when Racing’s Turnaround and Transformation Begins?

Last summer I was a member of one of the BHA’s strategy pillar teams: “Horse Population, Ownership and Breeding”. It certainly made me think more deeply about the huge challenges and opportunities facing racing. If you are of an optimistic nature, there are lots of positives around: a new CEO at the BHA, a big shake-up of the Board, record levels of prize-money for 2015, top-end bloodstock very strong, the 10-year sponsorship deal at Goodwood, contractual prize-money agreements in place with most racecourses and growth in media rights revenue. However, the glass can also look more than half-empty on occasions with racing in a fairly precarious position – big declines in owners, horses in training and numbers of runners with the consequent blight of small fields. So as Nick Rust, the new CEO (ex-Ladbrokes), goes on the road to meet the industry, here is the Owners for Owners’ “Strategic Starter for 10”.


1. Finalise and communicate racing’s turnaround growth strategy
Throughout January there have been the inevitable, platitudinous expressions of goodwill towards the new CEO, and in turn from him to the superficially supportive stakeholders. The reality of course is completely different. As the Australian commentator Jim McGrath said on a recent ATR Forum, “Racing’s stakeholders are like cats in a sack, and most of its leaders could start a row in an empty house”. Racing desperately needs clarity on its strategic vision around a small number of critical issues that the industry commits to supporting. The analytical piece (the “what” of strategy) then needs to be backed up by the behavioural piece (the “how” of operationalisation). A fundamental element of course is whether the strategy will be about growth or managed contraction, or a combination of the two.

2. Adopt a different leadership and governance model
Ever since the BHB was launched 20 years ago, the centre has lacked any real authority or control over the industry apart from regulation and integrity. The various factions have operated dysfunctionally and extremely inefficiently. For too long the bookmakers and racecourses have had the power in British racing, while the levy board has held the purse-strings. There are now proposals for a tripartite board representing the BHA, racecourses and the Horsemen’s Group. The challenge is whether the stakeholders will relinquish authority to the BHA within such a structure so that it can actually take control over key decisions. Without that it will be just about impossible to roll out a meaningful strategy for change. No matter how strong an organisation’s change management skills may be, it is just about impossible to do that purely through nudge, fudge and facilitation. It is time for a much more authoritative lead from the centre with a redefinition of the BHA’s role and the injection of resources and funds to drive the necessary changes.

3. Overhaul racing’s funding system and secure long-term income streams
Almost since its inception the levy scheme has not really been fit for purpose. More recently, as levy payments were avoided by offshore bookmaking, it was obvious that there had to be a replacement, together with the introduction of a “racing right” and new funding model. Encouragingly this appears to have found favour with the Government, but an obvious challenge is to maintain momentum through the inevitable disruption of the election. However it would be equally wrong to assume that modernisation and / or replacement of the levy is an automatic panacea for all racing’s ills. Bookmakers are already bemoaning the “increasing cost of content”, and any changes in fixture lists could easily dilute existing media rights payments. So as well as reforming the levy, it is vital that racing finds other income streams, particularly drawing on the export of racing media abroad.

4. Reshape and resize British racing
In the short term, there is simply too much racing and not enough horses. Everyone wants competitive, tightly-contested action, with more races having 8+ runners. That cannot be achieved at the moment, so changes needed include the removal of some fixtures, optimisation of race planning, restriction on the number of races programmed per fixture, removal of some races of four or fewer runners, reduction in field sizes in excess of 16, introduction of greater incentivisation to run through increases in prize- and place-money, and race innovation through, for example, making more handicaps into claimers. But all these are really just tinkering with the problem. The real need is longer-term remedial action.

5. Reverse the decline in both the horse and owner population
The average number of horses in training for both Flat and NH peaked in 2008, and has subsequently declined by over 1,600, coinciding with 650 races being added to the race programme. There has been a similar decline in the number of owners while their average age has increased from 57 to 63. There doesn’t seem to have been a corresponding inflow of younger owners. This is a spiral of decline: fewer runners, higher costs, more small-field races, poor prize-money particularly at the lower end, lower betting activity; and therefore reduced return on the levy. If there is going to be a growth strategy, then increasing the number of horses / owners must be central to it.

6. Dramatically transform the owner experience
Owners are the largest investors in racing, injecting hundreds of millions of pounds a year and over £20,000 for each of their horses in training. And yet they are still treated almost as “a necessary evil”. The whole racing mind-set should change. As a single example, compare the check-in desk and lounge for first and business-class passengers with the reception and hospitality that owners receive on the racecourse. Racing just doesn’t understand that owners are buyers of luxury goods and services, and there is a need here for multiple interventions across the whole industry. There are also very few proper metrics and assessment of service levels given to owners. We would like to see a Good Trainer Guide, a Good Racecourse Guide and more transparency in trainer charges, syndicate costs, agents’ commissions and the exposure of the corrupt practices and market distortions that occur in the bloodstock industry. Time for a radical re-think, and in parallel we recommend an industry-wide initiative to take costs out of the system, particularly through adoption of best-in-class procurement practices and a dramatic simplification in the process costs of racing administration. The complexity of administration is in itself one of the barriers preventing many people from becoming owners. All savings could be reinvested in owner-related benefits.

7. Set explicit goals for the return on ownership and prize-money This clearly follows naturally from the section above. At the moment the return on ownership is around 20%, so for every £ invested by owners they lose on average 80p. That is rock-bottom for the industry worldwide. Notwithstanding the record-breaking prize-money of £130.8m being provided in 2015 (a very welcome bounce back from the low of £94m in 2011), minimum values of races below Listed class are generally lower now than they were in 2005. Place-money is often derisory. We would like to see two clear targets: no place-money to be lower than the average cost of entering a horse and transporting it to the race; and for the return on ownership to increase from 20% to 50% by 2020.

8. Foster innovation in betting and bookmaking
Bookmakers definitely feel that they are being squeezed on all sides, with declining turnover, increased regulation and the high cost of the racing product. Racing appears to be losing market share to other sports and betting products. There is doubtless a need for joint initiatives to boost racing’s attractiveness to punters while ensuring that the sport receives a fair return from this betting activity. The key question is whether that can be done through the existing bookmaking structures, or whether there is a much broader need for both betting and technological innovation. This is an area for active research and business development to identify radically different betting platforms – “Betfair 2.0”.

9. Boost attendance at racecourses and improve terrestrial TV coverage of racing
At their worst some racecourse operators, particularly those under the ARC banner, see racing purely as a commercial activity and a cash cow to be milked. They suffer from dreadful media relations and fail to deliver an enjoyable racegoer experience, their facilities are a disgrace and they don’t act on their commitments to racing over prize-money. If a new governance regime led to much greater control over the fixture list, then a system of much greater incentives and penalties should be introduced with those courses. The best races and the most valuable fixtures should naturally go to those courses that demonstrate the greatest commitment to British racing. It is also vital for the terrestrial TV coverage of racing to be kept firmly in the mainstream. It would be severely damaging if anything happened to reduce this, as has been seen with the reluctance of many daily newspapers to cover the sport. Another area for collaborative action between key stakeholders is to ensure that TV coverage is revitalised and relevant for the modern viewer across a broad range of media platforms.

10. Stop the own goals
Unfortunately over the last few months we have seen a number of incidents in racing that have damaged the perception of the sport. For instance if a whip rule is introduced, based on the number of hits, and then stewards are expected to follow the rules without flexibility (although there is discretion), then poor outcomes are inevitable, as seen in the Aidan Coleman ban. But there have been other amateurish examples to do with flag waving, and removal of hurdles due to low sun even after sunset. Racecourse executives and stewards need to raise their game significantly here. Indeed there is probably a case for professionalisation of stewards.

Well that’s the longest blog that I’ve ever written. I said at the beginning that it was a “starter for 10” and there is a lot more detail that could be covered. I’m just hoping that Nick Rust demonstrates by his actions that he is a good appointment, and we’ll all be following what happens throughout this year with real interest.

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.

Grand Times at the Grand National – The Aintree Experience and Retraining of Racehorses

My wife and I always try to go to Aintree for the Grand National and for my money it is the best-organised NH meeting of the whole season- superb facilities, fabulous racing, and a real party atmosphere as 70,000 Scousers turn out in force, in their finery. It may be easy for the press to mock the excesses of “Ladies’ Day”, and it is certainly testimony to the tanning salon and tattoo parlour, but it really makes for a magnificent Aintree experience. It was also great to see the first £1m National, with excellent prize-money down to 10th. One of the real pleasures of the winter sport is that the “little man” can grab a huge prize. Charlie Longsdon in his blog summed it up really well: “Highlight of the Aintree meeting had to be Dr. Newland’s great win with Pineau De Re – he has 12 horses in training, and that is what the Grand National is all about. It is a fantastic story – something that could not happen in Flat racing. That’s why we love the National Hunt game. Everyone has a chance of having a superstar, and you do not have to have 150 horses in training and spend £100,000 to buy a great horse. Bring on the National in 2015!!!” Another of our trainers, Philip Hobbs, must certainly be thinking that – his Balthazar King, still improving at the age of 10, came 2nd and won £211,000. There was also a nice interview with Philip and Richard Johnson on Channel 4 – 16 years together. Although he didn’t say it on air, he has a lovely line: “If I don’t change my wife or my car very often, why should I change my jockey?” (Apologies [to Sarah] if I’ve misquoted, Philip – and I think I have – but that is the gist!)

There were several great results here for racing, not least Pineau De Re’s victory off the reasonable mark of 143 (certainly when Owners for Owners has a horse over 140 that stays forever, I know where we’re going). The excellent sponsor, marketing and branding for Crabbies created a very positive impression and they must be delighted with how the whole event unfolded, especially the avoidance of any controversy. There were no fatalities, and the way in which the core structure of the fences has changed for the better has been a most successful feature of Aintree for the last two years. It is also testimony to the leadership of Lord Daresbury who stepped down as Chairman at the meeting this year. When I first started going racing in the North I used to follow him as a rider. As Peter Greenall he was also the boss of the now-defunct brewery, Greenall Whitley (their bitter was often described as “only suitable to put on chips”), before selling the business off and concentrating on the hotels and leisure industry. One of the few real strategists in business and racing.

Finally, full marks again to the BHA for the way in which they took a proactive stance through the marquee and publicity for thehorsecomesfirst.com. They had a prominent and well-staffed stand by the parade ring and throughout the three days of the meeting, there was a concerted campaign to engage racegoers and raise awareness of the high standards of equine welfare in our sport. Proactivity like this is far better than responding reactively when there is a problem. Literature was given out containing such positive statistics as:

• Over the last 15 years the equine fatality rate during racing has fallen by a third, from 0.3% to 0.2%.
• The sport has invested over £25m in veterinary activities including research and education since 2000.
• There are estimated to be 1m horses in the UK. Racehorses are the best looked-after 2%.
• There are over 9,000 horses registered with Retraining of Racehorses active in other equine disciplines such as polo, showing, dressage and eventing.
• Our sport employs over 6,000 people providing first-class care and attention to the 14,000 horses in training.

Finally on the statistics front, there was a very interesting piece of information based on a study by Liverpool University which found that 62% of “traumatic injuries” (ranging from grazes to fractures) suffered by a sample of leisure and competition horses occurred when turned out in a paddock, compared to only 13% during ridden exercise. This certainly confirms my own experiences – I tend to be more worried when horses are on their summer holidays turned out in a field, than when they are being carefully looked after in their boxes in a yard. I hope all our NH horses that are being turned out now for the summer take note of this!

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.

Novices (At The BHA)

My involvement in six NH horses, three of whom (Ballyboker Boy, Cross Of Honour and Kings Lodge) will be starting their chasing careers this autumn, makes me particularly interested in changes taking place from 1st October with regard to novice chasing. Alas, as with much of racing at the moment, the needs of racecourses and bookmakers seem to be at odds with those of trainers and owners.

It all probably seems pretty straightforward to a non-owning administrator, hunched over spreadsheets in BHA Towers in Holborn. Runners in novice chases have been falling over the last few years, and too many have had seven or fewer; betting turnover, and therefore levy, is declining; racecourses are naturally worried about non-competitive racing. What to do about this? Simples. Cut the number of novice chases being run in the UK (20% across novice, beginners and maiden chases); don’t allow novices to go straight into novice handicaps (it will now be mandatory that novices make their chasing debut in weight-for-age races); offer a few sweeteners to owners (three end-of-season novice handicap chases, run in April, probably at 2m, 2m4f and 3m, with a minimum of £60,000 prize money, open to horses that have run in at least two weight-for-age novice chases during the season). Problems solved.

Two obvious questions don’t seem to have been addressed by the BHA. “What is the purpose of novice chases”, and “Why has there been a decline in the number of runners?“

Surely the whole rationale of such races is to educate inexperienced horses and give them the confidence to show their potential. Evenly paced races, with smaller fields of similar standard horses, on courses and over fences that do not over-face the animal, are essential. Forcing young chasers to come up against potential superstars from the big yards strikes me as a recipe for disaster. There must be a real risk under the proposed regime that two sets of horses will be competing in the same race – a few top class, but the majority out of their depth. This will either lead to the lesser contingent being overfaced, with an inevitable increase in fallers, or jockeys being encouraged to pull up the weaker brethren as soon as possible. Especially since the new system doesn’t stipulate that horses actually have to complete their races.

The issue of declining numbers of runners is clearly complex. Doubtless one contributing factor is the lack of incentives for owners in the current racing financial model. More specifically, in the context of novice chasing, I wonder whether the BHA made any real attempt to explore longer-term incentivisation options that could address some of the root causes. Let me know what you think – just drop me an email on jon@ownersforowners.co.uk.

Racing isn’t just about putting money into bookies’ satchels. I’ve watched all Frankel’s races this season. Small fields. Not competitive. Not a betting medium. And yet he’s drawing capacity crowds. I’ll be following Sprinter Sacre in the same way over the winter. Can’t wait!