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

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Have You Heard About the New Ownership Strategy for British Racing? I Bet You Haven’t

Towards the end of July full details of the 2019 Fixture List were published with all the powers that be in British Racing claiming it as a great example of the tripartite structure working together well to balance the different requirements of the sport and the betting industry. A quick summary is that there will be a record 1,511 meetings next year, three more than in 2018: 951 Flat fixtures, 596 Jumps; 23% of the total will be all-weather meetings with floodlit fixtures January to April starting at 4pm (including 20 at Southwell); there will be a three-week gap between the Cheltenham and Aintree Festivals. It was very easy to access and while not everyone agrees with the precedence of quantity over quality, at least it was an announcement with transparency and lots of detail. Well done to all concerned.

Unfortunately the so-called Ownership Strategy for British Racing appears to be at the other end of the scale for transparency, detail and ease of access. Indeed, has anyone actually heard of it? If you are an assiduous reader of the Racehorse Owners’ Association Annual Report 2017/18 you will have found a couple of pages on it, but it is devilish tricky to find out any more. Your diligent Owners for Owners blog writer has been sleuthing the case for almost a year now, with repeated email requests to the chief executive of the ROA, Charlie Liverton, but alas, to no avail. There is a total refusal to provide any meaningful insights or detail about the strategy, which is pretty scandalous because significant industry funds (almost £1m) have been committed to the strategy, its promotion and marketing, with the ROA as the lead body on behalf of the whole industry.

Owners for Owners has a particular interest in ownership strategy, not least because I was one of the unpaid volunteers who sat on the original strategy pillar team launched by the BHA, and spent a considerable amount of time examining ownership issues and requirements with substantial input going into the business case that proposed 1,000 extra horses in British Racing by 2020. That clearly counts for nothing with the ROA. You would have thought that my involvement in the pillar team would have guaranteed access to the latest strategy, and that is before you consider the large investment that OfO has made in bloodstock in recent years – indeed under various banners we are managing almost 30 horses in training and a substantial network of owners. Ironic that this doesn’t seem to count for anything with the ROA either. And then finally I’m on the committee of the Racehorse Syndicates Association which wants to work on an “inclusive” and “collaborative” basis with other stakeholders in British Racing to ensure that ownership strategies properly reflect the needs and demands of the ever-increasing numbers involved in syndicates. I put “inclusive” and “collaborative” in inverted commas because these are words much used across the tripartite structure of the BHA, Horsemen’s Group and Racecourse Association. With the ROA being central to the Horsemen’s Group, it is again somewhat surprising that they are not prepared to apply the same principles and values in their everyday dealings with owners whom they purport to represent.

Here is a summary of what the ROA terms their “development of a collaborative and inclusive ownership strategy for British Racing”. The ROA project highlights “the continued importance of the role of owners within racing. The strategy will give owners an enhanced brand and identity, emphasising their role as supporters of the sport in so many different ways.”

Apparently four work streams have been developed within the framework of the Ownership Strategy for British Racing:

• Retention: “the project focuses on the key elements of retention of existing owners.”
• Ownership Promotion: “investment in the development of a united identity for ownership will open the door to further simplification and streamlining of the ownership journey.”
• Trainers: “a key element of the project relating to trainers is about enhancement of the service and the improvement of information provided by trainers for owners.”
• Racecourses: “this work stream addresses owners’ racecourse experience on a number of levels. There will be a focus on creating minimum racecourse standards and assisting courses to deliver these”.

Nothing at all wrong with those four work streams. Bearing in mind that they have been described in a report dated 2017/18, then presumably all the different facets of the strategy have now been developed. What I am trying to find out are the specifics, i.e. exactly what initiatives are going to be launched, by whom, at what cost and by when, to achieve what specific goals? It is true that the ROA does flag up a number of goals, but they are far too woolly.

When I was a management consultant I was working with major companies where the problem wasn’t a lack of strategies, but too many. You would often find hundreds of strategies but scant evidence of their successful implementation. Indeed while I was working with one international bank they even had a strategy to reduce the number of strategies!! Seeing the rather comic side of this, I used to refer to “Yeti strategies” – much talked about, never seen. I do hope that isn’t the case with the one that Charlie Liverton is leading.

The intention after this blog is to approach all the leading executives across the tripartite structure, namely Steve Harman, Nick Rust, Richard Wayman, Charlie Liverton, Philip Freedman, Stephen Atkin and Rupert Arnold and see if they can help me obtain more details of the practical implications of this strategy for owners.

I’ll keep you posted through this 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.