“Icebergs Ahoy!”, but are the Officers on the Bridge of the Titanic Looking Through the Wrong End of the Telescope? More Views on the Ownership Strategy.

Just back from a super, relaxing holiday in the relatively isolated north-west of Tenerife. If you like golf, do go and stay at the Hacienda del Conde and play golf at the Seve Ballesteros course at Buenavista. While there, I read a bit about the island and I certainly wasn’t aware that Horatio Nelson didn’t just lose a sea battle off Santa Cruz, but it is also where he lost his arm. Apparently it was a battle he should never have lost – it was all down to complacency, not marshalling his resources properly, incomplete information and the wrong analysis of the situation. A bit like British racing, as you’ll see in this blog.

I kept my eye on a number of racing topics (I know, I should get out on the golf course more), and once again the strategic snail of the ownership strategy caught my attention, largely through an article in the Racing Post written by Jonathan Harding. For over a year I’ve been frustrated about the lack of clarity and progress on this strategy even though, apparently, the budget for it is now £1.66m, with the Levy Board alone contributing £790,000. The only way to gauge whether we’re getting value for money from this substantial investment will be the outputs from the study, and its impact on the attraction of new owners into the sport while retaining current ones. A coherent strategic plan still hasn’t been issued, and it does look as though the ROA is just tinkering around with the Titanic’s deckchairs. Where is the over-arching strategic vision? What are the major strategic priorities being addressed? What are the strategic goals and specific objectives that can be measured over a 1 / 3 / 5 / 10-year time horizon? What are the detailed and targeted initiatives to be deployed, and what are the resource implications for the industry? None of these questions have been properly addressed. Apparently there will be a communication exercise in the autumn and nothing would give me greater pleasure than putting ticks in all the boxes, and seeing the Titanic steer away from the icebergs unscathed.

Most worryingly, the Racing Post article stated that the strategy is all about “evolution not revolution”. The ROA has prioritised retaining owners over actively recruiting them, and that sort of one-eyed strategy appears to be gross neglect. Also, they have chosen to treat prize-money as a separate issue, and again that is flabbergasting. Just keep moving those deckchairs around …..

It’s not as though the icebergs aren’t big, prominent, ugly and frightening:

• Sole owners are in significant decline, down from around 7,000 to 5,000 in the last ten years.
• There are now more owners aged over 80 than under 40.
• The returns to owners are dreadful, with 73% of those owners receiving less than £2,500 per year, due to both the quantum of prize-money and its allocation. It is far too concentrated at the top tier of the sport, which benefits hugely anyway from ongoing stud value.
• The betting industry is hurting. For example, William Hill’s profits are down 33% with 700 betting shops likely to close by the end of the year.
• Racecourses are increasingly forecasting “significant risk of falling income” and almost inevitably reduced prize-money as a result. Newbury, which already has woeful prize-money for the quality of its racing, issued a note to that effect.
• While Logician put in a superb performance in the St Leger (for a £700,000 pot, the second-most valuable British Classic after the Derby), throughout the festival there were many under-subscribed races, which wasn’t surprising in view of the poor prize-money. Day 1 had a meagre £149k and the last two races on Leger day were 0-110 handicaps with prize-money between £12,450 and £15,562, whereas similar races at the York Ebor festival were worth £70k. Owners and trainers are voting with their feet / hooves. Those two races at Doncaster had three and two runners respectively.

And yet the ownership strategy isn’t examining initiatives to bring new owners into the game, nor to boost the prize-money to sustain it. This beggars belief.

Meanwhile, of course, it is very different elsewhere in the world. The new Saudi Cup, to be staged on 29th February 2020 at the King Abdulaziz Racetrack in Riyadh will be the richest ever race, at US$20m. Even the undercard has US$7m of prize-money. The Times has a view that we are now going to see a “high-rollers’ triple crown”, with trainers targeting this race along with the Pegasus in the US, worth £7.4m, and the Dubai World Cup at £9.9m.

Oh, to be a high-roller operating at the platinum end of racing, whether globally or in the UK. For them, life is rich and rosy, and indeed the ROA’s magazine, Thoroughbred Owner & Breeder, reinforces that view with all the top trainers, horses breeders and owners being feted and now has pages of over-priced “fashion” drivel as well. It would be a nice magazine to read in the lounges of the Titanic, maybe alongside a copy of the ROA’s ownership strategy, when it finally makes its appearance.

Icebergs ahoy! Do we have any lifeboats?

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Harold Macmillan Said that Governments were Brought Down by “Events, dear boy, events”. Racing has had Two Big Events in February – Fast and Furious Response to Equine Flu and Now The Beckett Boycott Against ARC. Are They Appropriate Responses or Over-Reactions?

If I ever take part in a pub quiz on racing (which is extremely unlikely), at least I’d be able to ask the question which was “Which National Hunt horse won the first race back after the great equine flu epidemic – which didn’t happen – of February 2019?” Easy, really – it was our horse Acey Milan, who won over an inadequate trip at Plumpton on 13th February. Well done, Ace!

Either side of the weekend of 9th and 10th February, British racing had introduced a six-day lockdown of 174 yards following the discovery of a US strain of equine flu at the yard of Donald McCain in Cheshire. A fast and furious wave of biosecurity activity took place as thousands of horses were tested for this highly contagious virus. No racing took place in the UK; yards were disinfected, either through low-tech spraying or high-tech fogging machines; horse movements were curtailed; and an enormous range of views expressed. A number of trainers, such as Charlie Mann, Nigel Twiston-Davies and Nick Williams, became very hot under the collar, saying that it was a “massive over-reaction” by the BHA and not even the vets seemed able to agree on the appropriateness of the lockdown and various measures. The Veterinary Committee of the BHA played a straight bat and were highly supportive, whereas some of the grass-roots practitioners such as Peter Ramzan of Rossdales in Newmarket and Ben Brain, the UK’s foremost wind surgeon, were very sceptical. After six days and a huge amount of coverage in the media, racing resumed and fortunately only a total of ten racehorses tested positive. Normal service was resumed – other than for the trainers who had not had their animals vaccinated in the past six months. This caused some resentment, as it meant that some top-class horses missed their Cheltenham preparatory races, and because there was no grace period, the BHA had in effect changed the vaccination rule overnight. In their defence, they had issued an “advisory” notice about vaccination earlier.

My personal view is that one of the BHA’s primary objectives is properly to protect racing’s future, and one key element of that has to be equine welfare. The horse must genuinely come first. Without the extensive testing of horses in the lockdown period, it would have been impossible to gauge whether the UK was on the verge of an epidemic; fortunately that was not the case, but imagine the public outcry if we had been. It may well be that a very small number of horses always get equine flu, but it goes undetected or unreported. The whole episode certainly demonstrated that “racing matters” in the eyes of the public, and not just for racegoers and punters. A lot of column inches were dedicated to the equine flu cases in all the newspapers, as well as extensive reporting on TV. The general consensus seemed to be that temporary inconvenience through the lockdown was far better than having an epidemic on your hands. The BHA took the right steps to contain it even if, with hindsight, it might have contained itself.

And then at the end of February another “event” broke out, this time a major row over prize-money as a result of ARC’s precipitate decision to cut its prize-money allocation by £2.7m while, through its actions, excluding itself from accessing a further £4.5m from the Levy Board through the Appearance Money Scheme. The last time there had been a boycott of racing was at Worcester a few years ago, when trainers withdrew all their horses with the exception of one, who had a walk-over for Nigel Twiston-Davies who then allocated the prize-money between all other trainers in the “race”. This time the President-Elect of the National Trainers’ Federation, Ralph Beckett, orchestrated an aggressive response to ARC with the withdrawal of horses in a couple of novice races at Lingfield before proposing a second wave attack with trainers being persuaded not to make entries at Fontwell, Lingfield, Newcastle and Southwell next week. Anyone who saw Ralph being interviewed by Nick Luck last Sunday could not have failed to be impressed by his cogent attack on ARC and his barely concealed anger. It was definitely a case of Bombardier Beckett in the trenches with the pins out of the grenades, ready, willing and able to go over the top on behalf of racing, and particularly the grass-roots owner.

I have every sympathy with the stance being taken by the NTF and indeed had instructed all the Owners for Owners trainers not to enter our horses in any races where the total prize-money is less than £4,000, unless there is a compelling reason to do so. I’ve just ensured that our horse Sojourn is withdrawn from Fontwell next week and will race at Wincanton instead, while Melekhov also won’t go to Fontwell but be switched to Taunton. When these decisions were made, the prize-money was over 50% higher at the non-ARC tracks. Since then, ARC has made what appears to be a “concession” by temporarily reassigning prize-money from more valuable races to those of lower grade, thereby unlocking levy funding. This doesn’t strike me as much of a concession, as no new money is being found; it’s just a different way of slicing the prize-money cake.

Direct action, boycotts, aggressive attacks on fellow stakeholders isn’t really the way to manage British Racing, and it’s really necessary for the current tripartite structure to contain the aggression and re-channel it on to problem-solving and solutions. The macro-economic reality is that while no-one knows the precise figures, the government’s decision to reduce the stakes on fixed-odds betting terminals to £2 is guaranteed to lead to the closure of a substantial number of betting shops thereby significantly reducing levy yields and media rights payments. Some commentators believe that £40-60m of annual income could be lost, which puts the ARC reductions into perspective. Racing, as a matter of urgency, needs to create a strategic plan of how it is going to boost income from the middle of this year onwards, or a lot more grenades are going to be thrown around.

Harold Macmillan would surely have identified with the way that “events” can blow up in your face, just like grenades.

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.