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.

Well Done to the ROA on Passing the 8,000 Member Milestone – Do Join If You’re Not A Member

Owners for Owners have always been a big supporter of the Racehorse Owners Association and have worked closely with a number of their key executives over recent years, not least when supporting the BHA’s Pillar Team on Ownership and drives to encourage syndicates to become more transparent. Nothing at all has changed in our view about the ROA – it is absolutely vital that owners are properly represented as THE key stakeholder in racing, and this very much remains the case.

So full marks to the ROA who announced last week that they have reached their 8,000th member, which is a really significant milestone. They have doubled the membership base in the last 20 years and according to their press release there are ten times as many members now as there were in the late 1960s. Charlie Liverton, Chief Executive, emphasised that: “Owners have never had such a strong voice, and our involvement with the Horsemen’s Group and soon the Racing Authority means owners, as the single biggest investors in the sport, cannot be ignored.”

In the total scheme of things for owners, to join the ROA for a mere 63p per day (£230 per year) is an absolute bargain when you consider all the benefits provided. Don’t worry, I’m not paid to be their PR supremo, but here is a summary:

• Free racecourse admission: members with 50% or more of a horse in training, or those running syndicates, enjoy free admission to over 1,300 fixtures through the Racecourse Badge Scheme for Owners, now administered through the PASS card. If you have less than 50% ownership, you still enjoy free admission at a choice of over 800 fixtures. The value of that, if you are a regular racegoer, is huge, with the ROA estimating that it is worth £500 per year alone.
• Third party liability insurance: hopefully no-one ever has to use it, but it is a vital element to have, and annual membership of the ROA provides automatic cover for up to £10 million, worth almost £300 if you were taking out insurance on your own.
• SIS Owner Sponsorship: which allows owners to reclaim VAT on the costs of ownership. Absolutely vital for those in yards that don’t have a sponsor. The ROA estimates this is worth on average at least £4,000 in reclaimed VAT.
• 20% discount on most BHA registration fees: every little helps, as they say. On average this is worth £57 per member.
• Thoroughbred Owner & Breeder magazine: as a member you receive a free copy every month, whereas to buy it costs £55 per year.
• Car park label: which gives priority parking at racecourses on virtually all race days, which is a good saving as well.
• £2,000 weekly Owners’ Jackpot: offering members the opportunity to win bonuses on top of prize-money.
• Expert advice: the ROA is an excellent source of information to owners and, should it be necessary, can arrange legal advice as well.
• Hospitality and social events: there are regular offers for exclusive hospitality facilities as well as a wide range of social events and visits.

So it is a no-brainer really, isn’t it, to be a member?

Having said all that, I’d still like to see the ROA have a much more active role in British racing, and be increasingly assertive in arguing the case for owners at racing’s top table, particularly the owners who represent the grass roots of the sport. I still believe that across racing the top trainer / owner / breeder perspective is given too much credence, and on occasions there can still be a rather patronising approach adopted towards those who are racing primarily at Class 4 levels and below at the lesser tracks.

From a strategic perspective I believe a lot more could be done to give real visibility to the improvement gaps necessary across every element of racing and the racehorse supply chain. And, most importantly, the steps needed to address them properly. In other words I don’t just want the ROA to be a representative body; I’d like them to step up to the plate and become much more a campaigning group. The more members they have, the better, and I hope in the not too distant future we see them hit the huge milestone of 10,000 members. Well done to Charlie Liverton and his team.

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.

The Bizarre World of Bloodstock Prices vs. Prize-Money for Grassroots Owners. Change is much needed.

Sometimes in British racing it can feel as though you are occupying a parallel universe. Whenever you go to the sales, you cannot help but be astounded by the enormous prices now being paid for bloodstock. So, for example, at the Tattersalls’ Cheltenham sale on 21st April, twelve lots sold for more than £100,000, five for £200,000 +, with an average price of £85,729 (up 89% on last year) and a median of £50,000 (up 25%). Last year, 34 lots sold for £1,546,000 while this year 35 went for £3,500,000. You can only agree with the auctioneers when they said it was “yet another remarkable sale”. But that was nothing compared with the Craven Breeze-Up sale which I also went to earlier that week at Newmarket. Records were smashed in every direction, with the average being 144,082 guineas and a median of 110,000. Global demand has never been higher, and there seems to be no shortage of ultra-high net worth individuals prepared to pay these sums.

So when you step out of this rarefied level into another universe, i.e. that occupied by the grassroots owner, you can’t help but be startled by the paucity of prize-money. Earlier in April, trainers Richard Hannon and William Haggas aired their criticism, drawing on the example of pitiful prize-money at Windsor and Southwell. Hannon Jnr. struck the right chord, stating that prize-money is now “bordering on the outright disrespectful to racing professionals”. They intend to reduce their runners and withdraw support for tracks such as this.

That’s not to say that there isn’t substantial prize-money available at some meetings, as was seen at the Cheltenham Festival, Aintree Grand National meeting and the All-Weather Championships at Lingfield on Good Friday. The key problem though is that the prize-money as you come down through the ranks, particularly to Classes 5 and 6, becomes derisory.

Encouragingly the racing industry is well aware of this problem. When I went to the British Industry Road Show held at Cheltenham in early March, there was a reaffirmation of the four prime targets: 1,000 additional horses in training by 2020 + betting participation levels up 5% by 2018 + racecourse attendances to reach 7 million by 2020 + £120m extra income for the sport per annum by 2018. Even more encouraging is the latest news that the European Commission has finally given state-aid approval to the Government’s plans for levy reform. Betting operators who had previously evaded levy because they were based offshore must now contribute to British racing’s funding, from betting on the sport. All operators will have to pay 10% of their gross profits on betting on British racing and it is estimated that this will bring in £30-40 million plus per year, which can be reinvested into the sport.

While there is bound to be a fairly lengthy queue to get their hands on that additional income, Richard Wayman, the Chief Operating Officer of the BHA, at the Road Show demonstrated that he is fully aware of the serious problem at grassroots level. A figure of 26p in the £ cost recovery has been used for some time (i.e. owners on average lose 74p in the £), but in fact when you look at the lower end of the sport it drops to an even more pathetic 8p. In a persuasive presentation, Richard stated that it is vital to get more money into the hands of ordinary owners while also improving the raceday experience and simplifying the needlessly complex racing administration.

I’m hoping that a number of initiatives are pursued with real conviction once the additional levy funds start to flow:

• Renegotiate the minimum values for low-end racing in Britain. £3,500 total prize-money for a race means that the winner of that race doesn’t even cover their costs for a month. That has to be increased, and will give more return to owners in Class 5 / Class 6 races.
• Redirect prize-money away from top Group / Graded races and improve the return at Class 3 and below.
• Do the same for races where there is a huge gap between win prize-money and 2nd and 3rd places. Raise the money considerably for those in the frame.
• Monitor what race tracks are actually doing, and penalise those that run a meeting with races only at the minimum values. Be similarly strict with tracks that have one valuable race, but at the expense of their lesser races.
• Set a clear goal for increasing cost recovery by the average grassroots owner by 2020. This should be a clear objective for both the BHA and the Racecourse Association.

Finally Philip Freedman, the much-admired Chair of the Horsemen’s Group, has emphasised that the decline in owners since 2007 has actually been greater than the decline in horses in training. The huge risk is that new owners don’t come into the sport in the numbers needed, and equally that existing owners exit or reduce their involvement. It is definitely time now for major change …. and hopefully levy reform will provide the funds. Grassroots prize-money should become the #1 focus of attention for the BHA and the other bodies in the Tripartite Agreement. Without that, the base of the pyramid will crumble, with very serious consequences.

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.

British Racing Industry Road Show: A Case of Onwards, Upwards and Occasionally Sideways.

My wife and I were invited to the road show at Cheltenham Racecourse at the beginning of March. It was exceptionally well organised and informative, and well hosted by Lydia Hislop. I don’t think I’ve ever seen quite so many of racing’s leaders at the same venue; I chatted to Steve Harman, Chairman of the BHA, and then listened to Nick Rust (CEO of the BHA), Richard Wayman (COO, BHA), Philip Freedman (Chairman, Horsemen’s Group), Stephen Atkin (CEO, Racecourse Association), Rod Street (CEO, Great British Racing) as well as the leaders of the Professional Jockeys Association and Arena Racing Company. There was also a presentation dedicated to staffing, training and welfare issues with a panel led by the Human Resources Director of the BHA and well supported by other specialists in this field. Those who know me well will know that I was not sufficiently intimidated to refrain from asking questions, which I addressed to Messrs. Rust and Atkin.
Just to summarise the key targets that the tripartite group of the BHA, Horsemen’s Group and Racecourse Association signed up to in 2015, and which still guide the industry:

• 1,000 additional horses in training by 2020;
• Betting participation levels up 5% by 2018;
• Racecourse attendances to reach 7 million by 2020;
• £120m of extra income for the sport per annum by 2018.

At the same time there was open acknowledgement of the challenges that face British Racing, particularly:

• Sole ownership in decline;
• Shortage of skilled stable staff;
• Statutory Levy forecast to drop under £50m in 2017;
• Need to develop a constructive partnership with the British betting sector;
• Low returns to horsemen at grassroots level.

Within the various presentations there was certainly plenty of encouraging news, with good progress including:

• £30-40m potential increase in revenue to be raised by the new Levy; ABP scheme expected to raise more than £10m in extra revenue in 2016/17; 2% growth in total betting activity since 2014; ITV channel.
• £8m prize-money paid to the industry via Plus 10 bonus scheme; ownership decline halted; 505 additional horses in training since 2014; 3% growth in number of syndicates and partnerships.
• In The Paddock web site launched to promote syndicates; 2.9% growth in racecourse attendance since 2014; 12% growth in prize-money to almost £138m since 2014; new approach to the Fixture List under way; 4.7% growth in races with 8+ runners since 2014; 5.4m social media followers.

Phew! Lots of statistics there. Lydia did a show of hands on “optimism” for the industry, and very encouragingly it was skewed positively. There are many initiatives under way or in the pipeline, and there was a definite feeling of momentum for the next couple of years – hence the “onwards and upwards”.

But that doesn’t mean that all will necessarily be plain sailing. The questions I raised were all to do with “Grassroots Racing”. Very encouragingly the leaders of our sport are planning to focus much more effort and money on to the base of the racing pyramid, as they need to, because the most startling figure I heard was that the average cost recovery for those at the bottom of the sport is now only 8p in the £. When you look closely at the various graphs, the horses in training figure over the last five years has barely increased (13,716 to 14,033 in five years) while ownership has actually declined, although apparently that trend has now been halted (8,215 to 7,946 registered owners in five years).

I genuinely believe that this grassroots racing focus is both long overdue and absolutely essential to the long-term sustainability of the sport. If the grassroots owner retires or leaves the sport, the economics and competitiveness crumble. When you look at a race meeting such as the Cheltenham Festival on this week, all looks exciting with prodigious prize-money everywhere, but that is most definitely not how it seems on “normal” racedays. In fact I prefaced my question to Messrs. Rust and Atkin with a statement: “With Owners for Owners involved in 23 horses, I am an archetypal grassroots owner, enjoying 8p in the £ cost recovery, the dubious pleasures of minimum value racing when the total prize-money is only £3,500, endless hassles on badges, over-crowded lounges and nowhere to sit …. and yet I still remain optimistic.” I am just hoping that we see significant improvement over the next few years to 2020 to justify that optimism.

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.

At Last, One Voice for British Racing – and a Lot of It Focused on Bookmakers and Betting

Racing politics around the 55th Levy Scheme can be difficult for most of us to comprehend, but there have been a number of very significant and really positive developments recently reflecting months of hard work, particularly from CEO Nick Rust and Chairman Steve Harman of the British Horseracing Authority (BHA) in conjunction with the Racecourse Association (RA) and Horsemen’s Group (HG).

While we don’t yet have an enforceable horserace betting right, we do have a new tripartite governance structure underpinned by a signed Members’ Agreement; a Members’ Committee representing the BHA, RA and HG, meeting quarterly; and an Executive Committee dealing with the implementation of strategy, meeting monthly. Credit where credit is due: this is potentially a milestone moment that will dramatically improve and strengthen decision-making and introduce a far more coherent and unified approach, with British racing able to speak with one voice and hopefully rise above the infighting of the past. Obviously there will be some big challenges to address, not least over the race programme and fixtures. Indeed Nick Rust has insisted that the agreement will only be in place initially for 18 months, and the next step forward will be dependent on a Memorandum of Understanding on the reshaping of fixtures – which, of course, goes right to the heart of the economic model of racecourses.

It sounds complex stuff, but it is all part of a genuinely strategic approach to the strengthening and growth of British Racing. Nick Rust has made a couple of TV appearances recently in which he emphasised the need to achieve three easily understandable goals: increase the number of racegoers, increase the volume of betting, increase the number of horses in training. Central to all of that is clearly the need for investment and funding across the sport, which is why bringing the bookmakers to the strategic party in the right way is so critically important.

Alas, while the developments mentioned above are a very big step forward, the breakdown on 31st October in the negotiations over the Levy for 2016/17 was definitely a big step back – at least in the short term. Basically about 40% of all bets by UK customers on British racing are not contributing anything at all to the sport or its workforce. Normally on a £10 bet, about 15p makes its way into racing. At the moment there is zero contribution to the levy from the digital, offshore businesses, and that is an estimated £30m currently being lost. The effect of the haemorrhaging of levy in this way is likely to reduce the levy yield from around £100m to £50m or lower by 2017, which is clearly going to have a hugely significant impact on racing, not least on prize-money for owners, which as we know is already at the bottom of the returns on ownership in any of the racing territories worldwide.

With the negotiations having broken down, the matter has had to be referred to the Government in the form of John Whittingdale, the Minister at the Department for Culture, Media & Sport, for determination. This is the last thing British racing wanted, since it shouldn’t be the Government’s job to sort out our problems. Having said that, there is apparently a lot of support for racing and, indeed, the Chancellor, in this year’s Budget, pledged that the Government will support a new Horserace Betting Right to replace the outdated levy mechanism.

The 55-year-old levy scheme is clearly nowhere near fit for purpose. Some would even argue that it rarely has been, since it started. The way that it was set up and operated has enabled bookies to under-pay for decades. Increasingly they have put out a smokescreen that the racing betting product is far less important than it used to be, but Nick Rust, as an ex-Ladbrokes man, is now poacher turned gamekeeper and knows the inherent nonsense of that statement. Racing is the only sport that provides a 7-day, worldwide betting product. It is inherently profitable but has the powerful advantage of bringing in punters to bet on other offerings. It is that leveraging of revenue which is at the heart of potentially huge growth for bookmakers if they could move away from denial and squabbling over the levy to a far more strategic debate about how to stimulate innovation in gambling and harness the enormous global market into and through the best racing in the world.

However, the bookies must make an appropriate contribution to British racing. One lever therefore is ongoing persuasion and negotiation, but the other is to be more coercive. So another significant development over the last month shows the huge benefit of having a Tripartite Agreement. British Racing – BHA, RA, HG – has introduced a new designation of “Authorised Betting Partner” (ABP) for bookmakers who “have a fair and mutually sustainable funding relationship with the sport”. This comes in on 1st January, and there are three firms already with that status: 32 Red, bet 365 and Betfair, because they are paying voluntarily on their digital businesses or, like Betfair, have a commercial deal in place. That is not the case with the likes of Betfred, Coral, Ladbrokes or William Hill. Although there was a voluntary agreement several years ago under which bookmakers committed to £18m of such contributions, only £4.5m has so far found its way into racing. All of this demonstrates that racing cannot rely on voluntary payments, and it must be underpinned by legally binding funding requirements – hence the need for an enforceable Horserace Betting Right. In future, if a bookmaker is not an ABP, because they are not paying levy or an agreed equivalent on their digital business, they will be banned from taking out new sponsorship deals on most races and festivals. Encouragingly both Jockey Club Racecourses and Arena Racing Company, who operate half the UK racecourses and 60% of the fixtures, have already stated that they will not enter into new commercial agreements with bookies that are not ABPs.

While the structural side of all of this is clearly complex, the basic goals, levers and requirements are straightforward. As this blog was written mid-way through the Paddy Power meeting at Cheltenham, it is to be hoped that the bookmakers change their behaviour, finally get behind racing’s strategy for growth and accept the need for a proper, sustainable contribution. At the moment, taking Paddy Power as an example, their initial reaction has been to question the legality of the ABP sponsorship model. Who knows, maybe it won’t be that long before Cheltenham is looking for a new sponsor.

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.

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.

The Growth Strategy for British Racing, Part 2 of 3: Cuts are coming

In the last blog I looked at the overall context of the growth strategy for British racing, as presented by Nick Rust and Rod Street in early May as part of their road show around the UK. While lots of initiatives were outlined, there was also some doom and gloom …. and indeed only a few days later Paul Lee, chairman of the Levy Board, duly announced a £4m reduction in expenditure in 2016 (which is bound to affect prize-money) and more substantial cuts threatened for 2017 – a timely reminder that all the various parties in racing really need to give total commitment to the growth strategy. So in this blog, here is an outline of the recommendations. Doubtless other ideas and activities will be developed as the strategy is implemented, so this is not necessarily a complete list, but the main themes and pillars are as described in the presentation.

1. Racing Structure & Governance

Like it or loathe it, racing does not operate through a conventional integrated structure with clear lines of authority. Consensus and collaboration rule the day, despite the considerable downside that this can lead to lengthy delays in decision-making and also allows stakeholders to exercise negative authority by blocking much-needed changes and reform. Nick Rust emphasised the need for racing to help itself and pursue “one journey: one voice”. Hear, hear! There is going to be a governance change with a tripartite arrangement between the BHA, the Horsemen’s Group and the Racecourse Association. There will be a members’ agreement, a members’ committee to steer strategy, and executive committee to make the key decisions. This is a challenging arrangement which will need “collaboration with teeth”.

2. Critical Success Factors: Transformation vs. Incrementalism

One way of evaluating any strategy is to look at the recommendations which are essentially incremental vs. those which are genuinely transformational. This is not in any way to knock incrementalism, but there is normally a need for significant innovation in a small number of key areas to drive successful change. We will return to that theme in the third blog, with a more critical appraisal.

Four clear, quantifiable targets / CSFs were highlighted: 1,000 new horses in training and racecourse attendances to be at 7 million by 2020 (vs. 5.8m today); betting revenues to rise by 5% and a minimum of £120m of extra income to flow into the sport by 2018.

3. Racing and Betting Pillar

Vital need to reverse negative trends. Incremental recommendations included: connecting better to betting consumers; setting up a Racing and Betting Forum; improving sectional timings; closer alignment in race timings and broadcasts between GB and Ireland; and introducing an “Own Thursday” day, where betting can take place free of many of the other sporting distractions. Transformational recommendations: there weren’t any.

4. Customer Growth Pillar

Incremental recommendations included: developing better customer insight; using customer data more effectively; setting up a national survey; better promotion through social and digital media; seeking more sponsorship. Transformational recommendations: there weren’t any, although the vision of 7m racegoers may well need some.

5. Horse Population, Ownership & Breeding Pillar

Incremental recommendations included: simplifying owner administrative processes to lower the cost and complexity; liberalisation of colours; framing minimum standards for trainers, racecourses and the administrative experience; launching a data project on owner experience and owner churn rates. Transformational recommendations: although there weren’t many specifics, there is a clear intention to put funds behind the goal of 1,000 additional horses in training by 2020. That will be a centrally-led drive.

6. Ultra-High Net Worth Pillar

No real detail here, other than saying there is a need to “integrate and optimise new and existing resources”.

7. Integrity & Regulation

Strong commitment to maintain the world leadership reputation of British racing, and for there to be “impactful, cost-effective targeting of risk areas”. Incremental recommendations such as a plan to simplify and make more transparent the rules of racing; continued targeting of corruption, but making sure that the authorities are aware of “the danger of sledgehammers to crack nuts”.

8. Welfare & Training

Not many specific recommendations, although there will clearly be greater emphasis on integrated recruitment and learning and development; injury rehabilitation and broader education on relevant subjects such as nutrition for jockeys.

9. Funding

Running right through the presentation and discussion were continued references to “Where is the cash going to come from?” Part of that is the “need for fair and sustainable funding between betting and racing on a reasonable basis”; part through the introduction of the Racing Right; and part through the need for racing to be far more open to ideas for investment from outside the sport. A lot of that will have to be transformational.

Doubtless you will have your own views about the coverage and relevance of all these various ideas and recommendations …. together with key elements that you may feel have been neglected. More about that in the next blog.

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.

Lamborghinis, Bingo and Beer – and Encouraging News on the Prize-Money Front. Plus a Few Reflections on the Cheltenham Festival

If you didn’t already know it, you can tell I’m a retiree because I watched the budget live, and was extremely pleased with some of the announcements made by the Chancellor, George Osborne. I suspect I won’t raid my pension pot too quickly for the Lamborghinis, but not surprisingly, it may well help fund a couple of new horses for the Autumn. We’re planning to buy one with both Charlie Longsdon and Philip Hobbs during the Spring / Summer – if you’re interested in joining either or both of these new partnerships, please let me know. I didn’t really mind the Chairman of the Conservative Party taking the mickey with his “beer and bingo” tweet, but I did celebrate the budget with a few pints of Donningtons’ Old Grobbler in the Plough at Ford.

However, the really encouraging news in the Budget from the horseracing industry’s perspective was a clear commitment from the Government that it intends to address the key issue of the levy and racing’s funding. The levy is going to be extended to cover offshore bookmakers (which ought to bring c. £25m back into racing over the next year or so) and a “Racing Right” will be introduced, which can readily be enforced as part of levy reform. As an example and putting this into context, over 60% of betting with William Hill is now offshore. It significantly boosts their profits but does nothing for racing. That will change under the new regime, which will now be worked on in detail by the Government, in conjunction with racing’s stakeholders.

In the past I have been quite critical of the BHA, but I think they have done an excellent job here. One of our owners is Steve Harman, Chairman of the BHA, and I know that he has put considerable effort into developing stronger relationships between the BHA and key politicians. The Budget announcements clearly signal that we now have much greater Government support for our industry. This is a significant step forward, and in many ways a necessary precondition for levy reform. I am hoping that Steve will write a blog for us in the not too distant future, covering some of these issues.

Also in March, another organisation of which I have been critical in the past – Arena Leisure Company – decided to end their stand-off with the Horsemen’s Group and sign a three-year deal, underpinned by the BHA, which should increase their prize-money by 25%.

So at the moment it looks as though there will be an excess of £123m of prize-money for 2014. This is a record amount and shows what can be done by more proactive lobbying and negotiation.

Not that I’m going to stop being critical – an immediate target being the five courses that haven’t signed up for the Horsemen’s Group Prize-Money Agreement: Catterick, Hexham, Plumpton, Redcar and Towcester. Hopefully they will be shamed into action. If not, as owners, we should stop sending our horses there.

Finally, a few reflections on the Cheltenham Festival:

• Happiest trainer award: must go to our trainer Jamie Snowden for gaining his first Festival win. An experiment was conducted at the Festival: heart monitors were put on a trainer, an owner and a jockey to see what happened to their pulse rate. When the result of the stewards’ enquiry came through and the race was awarded to Present View, Jamie’s was 196. There were lots of ribald tweets and emails afterwards about what else might cause his pulse rate to reach these heights.

• Unhappiest trainer award: alas, must go to Martin Keighley whose Any Currency was beaten in a photo finish by Balthazar King, trained by another of our trainers, Philip Hobbs. He provided the TV image of the meeting as the frustration spilled over and he threw his race programme to the ground in disgust.

• Oddest quote award: Michael O’Leary, when he said, “I couldn’t care a rat’s backside what people will think or say”. Anyone who has flown Ryanair well understands this. But this was in the context of the doping investigation at Philip Fenton’s yard, and his horse Last Instalment running in the Gold Cup.

• Quirkiest image award: to the Racing Post reporter who said that being in the Guinness Village reminded him of penguins keeping warm in the Arctic: hardly seeming to move, but somehow finding their way from the cold outer edges to the warm and cosy centre, and then back out again.

• Best horses award: a three-way photo finish for me between Sire De Grugy and the joy of the Moore and Preston families; Vautour for the scintillating way that he won the Supreme Novices; and the beautifully laid-back More Of That in the World Hurdle. Mind you, there were a few more horses who should probably win awards for bailing me out on the betting front!

• Stingy b******s award: to Cheltenham Racecourse itself, for daring to be so greedy that they charged Owners for Owners £90 for additional owners’ badges, just so that we could stand in the paddock for one race. We thought the figure was £75 but it was increased even further on Gold Cup day when Shantou Magic ran in the Martin Pipe. Not even a free cup of tea! I think I’m going to write to Cheltenham asking when they intend to introduce a soup kitchen for impoverished owners. We invest so much money, and to be treated like this at the NH Olympics is an absolute disgrace.

On to Aintree now. It’s just a pity that Doncaster and the start of the Flat intervenes with such a whimper.

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.

“Little e” Resolutions for the Racing Industry – but I can see the pigs flying over Woolley Down

Despite the shocking weather, lots happening on the horse front. Quick Decisson wasn’t able to go to Wincanton when the hurdles / bumpers were abandoned, but will hopefully go to Exeter on 10th February; Shantou Magic had a really good workout at Lambourn during the week, and is only a couple of weeks off coming out; and Houndscourt did us proud with a game 2nd at Lingfield in a jumpers’ bumper. Two runs so far for Owners for Owners – a 1st and a 2nd sets the standard for whichever horse comes out next. Great to see both Timeform and Racing Post very complimentary: “plenty to recommend him on pedigree and should progress over jumps, with his long-term future likely to be over fences” and “ran a fine race on his first start since arriving from Ireland. A point winner at Tinahely in October, he would probably have found the trip on the sharp side, and rates as a decent prospect”. All very encouraging.

In the last blog, I flagged up a number of big recommendations for the racing industry. I’ve been in touch with the BHA about them and had what you might call an “interesting” discussion. More on that in the next blog.

I’m sure everyone has their own list of more immediate changes that could be easily made. Here are my “starters for 10”. As I’m writing it, I can see a flock of large pigs flying over the Woolley gallops!

1.  Racecourses and bookmakers complain of races with seven or fewer runners, particularly novice chases. Why don’t they target the problem ones and have prize-money down to eighth?

2.  Racecourses have done a great job recently with special initiatives, setting up jumpers’ bumpers, switching abandoned races to other tracks etc. Hats off, but why isn’t it done more often?

3.  Racecourses such as Chester have a fabulous Owners and Trainers facility, superb lunch etc. Others are simply shocking. Surely any track should provide something more than a stale bun and a cup of coffee, when we’re often spending £200-£500 just to get a horse to the course?

4.  Integrity of racing is critical. No problems with a crackdown on corruption – there will always be serious breaches, such as the the case of Andrew Heffernan. But two trainers I know very well, Karl Burke and Jim Boyle, were both dealt with very badly indeed and their livelihoods threatened during needlessly protracted and poorly handled investigations. Why do they take so long? I’ll examine Jim Boyle’s case in more detail in a later blog. It’s a disgrace.

5.  Prize money, and the trickle down into the racing industry, has to be improved. All of us should rally behind initiatives from the ROA and the Horsemen’s Group. Why wouldn’t we support them?

6.  Joint ownership, partnerships, syndicates etc. now represent a huge part of the industry. Yet we’re often treated as second-class citizens. How about racecourses targeting us all with special deals, much better facilities and a series of “syndicate races” with big prize money, only open to us?

7.  Racing for Change often talks about “bookending” the season. So why doesn’t that happen properly? Why have the start of the season at Cheltenham clash with Ascot’s Champions’ Day? Why is the start of the Flat such a damp squib nowadays?

8.  The administration and form-filling in being involved as an owner is simply shocking. Every form also has to have a cheque attached to it. I fear that it is a revenue stream for Weatherbys. Why can’t we have one payment (say, £100) and one form that covers everything involved? And online?

9.  The bookmakers are now evading the taxman with offshore gambling to the tune of several billions of pounds a year. How can HM Treasury allow that to happen? Put the legislation together, crack down on evasion and introduce a transaction tax on every bet struck online.

10.  Find a way of putting the welfare of horses and stable staff more centre stage. How do we do that? Don’t have any answers, but would welcome views.

I think I’ve only scratched the surface with these ten! Still lots of pigs flying out there ....

Worcester Sauce

What did you think to the boycott co-ordinated by Charlie Mann that enabled Moulin De La Croix to walk over at Worcester on 11th July? Personally I’m very much in favour of the approach adopted by the Horsemen’s Group, particularly when they are targeting courses owned by companies such as Northern and Arena who persist in putting up sub-tariff races. But I also feel sorry for the local management at Worcester. Indeed, some friends and I took a box and sponsored a memorial race there recently and they went out of their way to make it a really enjoyable occasion, and it is a decent track, even if the facilities are not the smartest.

It was definitely a source of lots of comments, with the Racing Post blog capturing a wide range of views, one being “Prize money is terrible and something needs to be done”; but another saying, “Owners are fulfilling a hobby, no more, no less, most people fund their hobby themselves, why are racehorse owners any different?” So there may be grassroots support, but also little genuine understanding about why prize money needs to increase, how it benefits trainers and their staff as well as owners, and its broader impact across the whole racing community.

I think Rachel Hood, President of the Racehorse Owners Association, strikes the right note when she argues that “an appropriate share of racing’s revenues should go into prize money”. The challenge is how to apply a proper strategy to secure that share, while working with all the major stakeholders to grow the revenue pot. Alas, I think racing tends to focus too much on dividing up that pot, rather than maximising the revenue from the global betting market, media rights, racecourse attendance and sponsorship. A theme that will doubtless be covered again in this blog.

Just to show that prize money isn’t everything, our mare, Ursula, has now been sold and will go to stud in Ireland. The day before the Worcester débâcle, she won a Class 5 at Southwell and the huge pot of £2,264. Everyone was thrilled for her and the new owner, and also for the Burke family. Ursula was well ridden by Michael Metcalfe, who is a really promising rider at Spigot Lodge and enjoying a great strike rate for them at the moment, and the horse was led up by Lucy Burke who has looked after her for most of the last five years. A superb result for everyone. Despite the shocking prize money.