Half Way in the 100-Day Campaign and we Already have a Result – BHA Announces a Recovery of Racing Plan …. But There is Still a Chasm to Cross

On 12th July, Ged Shields and I launched our Blueprint for Racehorse Ownership in the UK: Making retention and acquisition of owners the number 1 goal of a racing recovery plan, and since then we’ve been lobbying all the key stakeholders across the sport to design, launch and implement one. An enormous amount of time has been spent on Zoom conference calls as well as successfully launching a micro web site, www.keepownersinracing.com, where we’re building up a bank of Zoom videos and blogs in pursuit of our cause. The whole motivation is to encourage the top table of racing to work collaboratively and kick on with urgency to launch major initiatives designed to retain owners in the sport. At the heart of that is a requirement for substantially improved funding of the sport, not least to boost prize-money and radical reform to capitalise on the opportunity presented by the pandemic. A major milestone was reached on 25th August when Nick Rust, the outgoing CEO of the BHA, announced the launch of a Recovery Plan. While this was an encouraging step forward, there is still a huge amount of work to be done and, indeed, many owners and pundits, such as the Racing Post, were less than complimentary because it seemed to be more a “plan for a plan” rather than a robust set of initiatives and actions. We’ll doubtless see the evolution of the plan through the autumn.

If you haven’t already done so, please sign up on www.keepownersinracing.com and you’ll receive all the blogs before they are publicly released. Here are four from the collection that clearly show where Ged and I are coming from.

SIGNING THE PLEDGE – AND WE’RE NOT TALKING ABOUT GOING TEETOTAL

At the heart of our Campaign to Keep Owners in Racing we have advocated a strongly collaborative approach to be adopted by all the leaders of British racing. Maintaining unity and common purpose is vital, but poses a considerable challenge. Racing has never been more fractured; vested interests and protectionism prevail; trust and transparency are noticeable by their absence; frustrations are building rapidly and threaten to blow strained relationships apart. The very last thing that racing needs after the damage already done by the pandemic is a self-inflicted wound of its own creation.

You only have to consider TLAs – the curse of three-letter acronyms – to understand the cat’s cradle complexity of our sport: BHA, RCA, THG, ROA, (HR)BLB, NTF, GBR, JCR, ARC, TBA, ABB, TRF, RSA, PJA. Corralling this lot is a complete nightmare and raises the question of whether it is even achievable, and whether racing needs fundamental restructuring of its governance: which we will revisit in the blog soon.

In the immediate future, Q3 / Q4 2020, our recommendation is for top leaders in the sport to produce a one-page Pledge summarising the way forward for British Racing, a statement on required collaboration and ten key actions, which all stakeholders must sign up to. Such a pledge provides much-needed vision and focus, and will be a real spur to leadership endeavour. The actions must be bold enough to enable our sport to recover from the crisis. We fear that many owners are already leaving the sport, or planning to do so, and this will cause real damage. Our call to arms is for a Racing Recovery Plan – RRP. Let’s get on with it – PDQ.

“MONEY, MONEY, MONEY” – IT’S A HORSEMEN’S WORLD

Our 100-day campaign to apply pressure on British Racing to develop a highly practical Recovery of Racing Plan broadly coincides with the first 100 days in office of the new Chairman of the Horsemen’s Group and President of the Racehorse Owners Association, Charlie Parker. Without any doubt he has the hottest seat in the sport, and we wish him well. What he achieves (or doesn’t) during Q3 / Q4, particularly on media rights transparency and apportionment, will have a huge impact on racing and ownership.

All roads, inevitably, lead back to the dire, unsustainable state of racing’s finances and the urgent need for cross-industry agreement on the most effective ways of harnessing new income streams. Without that, we all flounder. Mark Johnston, in our Perspectives in Racing film, argues that applying sticking-plaster to the problem has minimal impact and that we now need to be coming up with financial initiatives that “cross the gaping chasm”.

We believe that there is a need to generate £200m+ of annual income and that there are three principal ways of achieving that goal. Firstly, work with government at ministerial level on a second round of Levy development and reform. That was on the table in 2018 and some of racing’s leadership, for whatever reason, made a disastrous decision not to pursue it. Secondly, devise a much fairer revenue-sharing deal with the racecourses on media rights by the end of this year and then extend it into a much stronger media pooling operation. Thirdly, develop a betting strategy that targets the global gambling market through betting innovation and Tote co-mingling with other countries. And, of course, do everything possible to retain owners with the promise of more prize-money.

There is no shortage of income to be picked up – as we say, “Money, money, money”. Racing’s leadership needs to stop falling out over dividing cakes and get on with producing a radical new funding plan that bakes an altogether bigger and different one.

THE BASE OF THE PYRAMID CRUMBLES – IGNORE AT YOUR PERIL

British racing is a big industry, and at the top tier of the sport a considerable amount of money can be made. In the Blueprint we examined the profitability of all the stakeholders. In 2019, the aggregate of the top five yearling sales in England, France and Ireland made £250m for their consignors. The annual income earned from the top stallions at Coolmore, Godolphin and Juddmonte exceeded £200m. Despite all the aggressive noises being made by certain Flat trainers, the top 20 trainers in the UK make significantly more profit than the bottom 20 racecourses. It would be easy to conclude, perhaps unfairly, that the most vociferous members of the training community wish to maximise their returns even further. The platinum layer of the sport is being run by the few, for the few, with an over-concentration of income in the hands of those who don’t just make significant money every week of the year but also sit astride the downstream value chain that accrues from breeding rights.

How different it is at the bottom of the pyramid. The grass roots of our sport cover the vast majority of trainers, breeders, owners and horses. If the financial returns were terrible pre-pandemic, then they are nothing short of catastrophic now and the situation is only going to get worse. The majority of trainers and breeders are either technically insolvent or teetering on the edge of it unless they have other sources of income, and of course the vast majority of owners whose horses are running primarily at classes 4, 5 or 6 are losing on average 93p in the £ every year, with the returns not even covering the raceday costs of getting horses to the track.

These owners are spending £527m a year, to lose a collective £428m. If our forecast is correct, there will be a 20% contraction in the owner base over the next five years, which will lead to an immediate loss of £124m. But the far bigger damage is the 1:7 multiplier that leads to a much greater financial hit of £868m as the ownership contraction ripples through bloodstock, levy yield, media rights, racecourse attendance and the whole ecosystem of suppliers connected to training and racing.

Racing ignores the grass roots at its peril. This is where the contraction will be most felt, and hit hardest. We implore the leadership of the sport to produce, with urgency, a Racing Recovery Plan. Without that, the pyramid crumbles.

9-POINT RECOVERY PLAN FOR BRITISH RACING – A BIT OF A CURATE’S EGG

In the 1890s, Punch magazine ran a series of cartoons about a timid curate eating breakfast with his bishop. On being told by the bishop that he seemed to have a bad egg, the curate piped up: “Oh no, my lord, I assure you! Parts of it are excellent!” Seems an appropriate comment for British racing’s recovery plan, which made its appearance on Tuesday 25th August.

When we launched the blueprint in mid-July we challenged the top table of racing to produce a post-pandemic recovery plan, with retention and acquisition of owners as its #1 goal. Behaviourally we wanted the stakeholders to work collaboratively, proactively and urgently on it; analytically they needed to create a comprehensive, wide-ranging, multi-faceted plan of action with two clear phases of immediate initiatives in Q3-Q4 2020, and then longer-term, more transformational change in 2021-2025; and most importantly, it had to be operationally deliverable through practical, robust, well-defined projects. It couldn’t just be about papering over the cracks – there is a chasm to cross, because the only way in which British racing can be properly sustainable is through securing at least £250m of additional income while fundamentally reforming the sport. The pandemic presents a one-off opportunity to reimagine the future and embrace the “next normal”.

That the key stakeholders, within 50 days of our challenge, have produced a recovery plan is commendable and we applaud their efforts. However, rather than a set of very practical actions, Nick Rust, outgoing CEO of the BHA, launched nine broad goals, which unfortunately disappointed a lot of owners and certainly the pundits of the Racing Post, the editor Tom Kerr being quite caustic in his comment that: “as with Coronavirus itself it is not the diagnosis but the cure that is of utmost significance. For that, the wait continues.” To be fair to the stakeholders, while the nine goals seem to be “a plan for a plan”, there will doubtless be more specific recommendations for action soon – not least the publication of the long-awaited Ownership Strategy, under development since 2017. It had better be good!

We will scrutinise these ongoing developments and fervently hope that we don’t have to echo Punch, in the final issue in 1992 before it went under, when the cartoon was updated with a considerably more emboldened curate, who replied to the bishop: “This f***ing egg’s bad!” For racing’s sake, it can’t be.

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Why Cheltenham Should be a Five-Day Festival – Even Though My Knees, Liver and Wallet will Struggle to Cope

When you’re in the stands at Prestbury Park and look across to Cleeve Hill, you’ll see the radio masts at the top. Travel a few miles beyond them in a straight line and you’ll get to my house. I sometimes say (though it isn’t strictly true) that if you slip the hand-brake on my car, it’s downhill all the way to the members’ car park. I’m here primarily because I adore Cheltenham Races and the Cotswolds. So do most of my friends, many of whom I am going to antagonise with this blog, so apologies in advance.

Here is my prescription for a proposed new Festival – make it five days; have the Gold Cup as the centrepiece on the Saturday; reduce the number of races to six per day; frame extremely valuable handicaps to end each day; ensure that these races enable grass-roots owners to have runners; and set a target for 300,000+ attendees.

In an ideal world, my personal preference would have been for a two-day, concentrated event – a National Hunt Breeders’ Cup meeting, or something similar to the superb Dublin Festival of Racing at Leopardstown in February. Putting all the top races together in a two-day extravaganza would be fabulous, but there is clearly no chance whatsoever of that occurring. Cheltenham over the years has quite rightly made the event bigger and broadened its appeal. All the arguments against this on the basis of dilution appear pretty weak, and really we have to regard the Festival as one of British Racing’s most valuable assets. Let’s make it bigger and better, as soon as possible.

The starting point is to do with the bigger picture of British Racing, which seems to be in decline in terms of ownership and racecourse attendance. Owner numbers have been on a steady downward trajectory throughout most of the past decade, and despite the ambitious goal of seven million racecourse attendances by 2020 – set as a key target of racing’s Strategy for Growth – the reality is unfortunately that numbers have dropped, to 5.62 million last year, from 6.13 million in 2015. There are doubtless quite a few structural factors behind this, and it is likely to be impossible to reverse these declines without significant change on a broad but targeted front. Attracting new racegoers into the sport is absolutely essential, and the demand appears to be strong for festivals and marquee days, which is something that the racecourse groups can’t afford to ignore. Without going into too much detail, why doesn’t racing incorporate a programme of top-quality Saturday events throughout the year, designed to appeal to this demand. One of the arguments will always be that it would clash with football or other sporting events but, for starters, how about a sequence of even bigger racedays for the Aintree Grand National, Epsom Derby, York’s Melbourne Cup (aka the Ebor), Ascot’s Champions’ Day, Haydock’s Betfair meeting and, of course, Cheltenham and The Festival (which I’ve noticed is now trademarked, with by-lines such as The Best Spectacle in Sport and In March, the Only Place to Be.

From the ownership standpoint, all roads lead to Cheltenham. It’s incredible that for this year’s Festival there are 928 entries for the 10 handicaps alone, including 156 for the Martin Pipe, 148 for the Coral Cup, 99 for the County Hurdle and 96 for a race that I can’t even remember what it’s now called – the Plate. All owners, and particularly those at the grass-roots level, want to be part of the Festival. For trainers it is a symbol of success to have runners, never mind winners, and for staff it is hugely motivating to lead up the horses in the famous Cheltenham amphitheatre. The ideal would be to frame races to enable broader participation, and it would be terrific if every day there were hugely valuable handicaps that put significant winnings into the hands of lesser trainers and owners. It wouldn’t be difficult to design races to facilitate that. Indeed, I’ll be at the forefront of a campaign for a syndicate series that has its final at the Festival. These types of races could also be linked in with nationwide qualifiers that would spread the wealth and increase field sizes at the lesser tracks.

Many will characterise the expansion of the Festival as commercial greed, designed to “milk” the racegoer and punter. There are already lots of events and sideshows around the Festival that a lot of people dislike. It won’t be everyone’s cup of tea to participate in The Park, which is, apparently, “a totally unique area ….. offering an alternative experience ….. the Insta-worthy place to be” (whatever this might mean). But we shouldn’t belittle the marketing talent that is going into the Festival, and the considerable contribution made by Jockey Club Racecourses to prize-money as a result. In 2010 this was £13m per year, and by the end of the decade it has climbed to £27.1m. Hats off to JCR!

Over to Martin St. Quinton, the new Chairman of Cheltenham, not only to grab this commercial opportunity with both hands but to bring in a broader audience of racegoers, especially when the Gold Cup is on a Saturday. If a few of the traditional fans reduce their attendance or even drop by the wayside, so be it. As one of them, I’m sure I’ll adapt, even if the physical demands are becoming more onerous with age. But doubtless the Cheltenham roar at the beginning of each day will make attendance worthwhile …. and when one of my horses wins the Syndicate Final on the Saturday of Cheltenham, I’ll be in seventh heaven. Bring it on!

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“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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New Brooms in the Leadership Cupboard, but Will We See Any Sweeping Changes?

When you look at the quality of racing at Ascot on King George day and now Glorious Goodwood, it’s very easy to feel that all is just fine and dandy in the racing stable. It isn’t, of course, and this blog flags up a few priorities for the new leaders who have recently stepped into various roles in racing and at Westminster.

But first, the racing. I was lucky enough to see Grundy beat Bustino in the King George V1 and Queen Elizabeth Stakes in the 1970s, and for my money Enable’s win, beating Crystal Ocean, is one of the best performances I’ve ever seen. She has now won her last 11 races, £708,875 last Saturday and a total of £9,141,226 during her career so far. Last Sunday Karl Burke’s super filly Laurens got back on the Gr.1 trail again, winning the Prix Rothschild in Deauville. That was her sixth Gr.1 and she has now bagged £1,704,500. Then on the first day of Glorious Goodwood, my favourite horse in training, Stradivarius, added another £283,000 on to his winning tally which is now well over £2m, and of course there is probably going to be another million to come from the Weatherbys Hamilton £1m Bonus.

Wouldn’t you like to be a trainer?? The answer to that question is “absolutely not”, as it is such a tough, stressful and economically precarious way to earn a living, as the current Flat trainer statistics show. So far, 521 trainers have had runners on the Flat this season in the UK; 11 have won £1m+, 22 £½m+, and 109 in total £100k+. Now for the killer stats though – 412 (79%) have won less than £100k in total prize-money earnings; 227 (44%) less than £10k; 170 (33%) less than £5k; and 87 (17%) less than £1,000. The trainer winning percentage is 10%, so 79% of all the trainers in the country who have raced on the Flat so far have earned less than £10k. At the same time, when you consider the small amount that goes into pool money for stable staff, the returns to the vast majority of the training ranks and their staff is derisory. I genuinely believe that the greatest strategic risk to British racing is that the base of the racing pyramid crumbles.

Weatherbys Hamilton, if only you’d spent your £1m on a “Proud to Support Grass Roots Trainers and Stable Staff Stakes” series, I’d willingly switch my insurance to you. Imagine the impact of 100 races at £10k each, going into the grass roots. The impact of that would have been immeasurable compared to handing over all the money to an elite owner who doesn’t need it and wasn’t seeking it.

Who are the new broom leaders, then, and what should their priorities be? In the blog on 1st June I mentioned Annamarie Phelps, the new chair of the BHA. We also have a new CEO of the Racecourse Association, David Armstrong; Delia Bushell is taking over from Simon Bazalgette at the Jockey Club; and Rebecca Pow MP will be supervising horse racing and gambling as the new parliamentary undersecretary of state for arts, heritage and tourism at the Department for Digital, Culture, Media & Sport. There are some big questions and challenging dilemmas that these individuals will need to address.

Some of the top priorities (not comprehensive and not in order of importance necessarily) should be:

#1: Funding and finances. The 1st June blog summarised the £115m of extra funding for racing that could easily be secured. Steve Harman, Annamarie Phelps’ predecessor, discussed with the government the £50m a year that could come from self-help opportunities and £65m from levy development work. I still believe that Steve’s “call to arms” for the BHA to address this as an urgent priority is right. Getting close to government is obviously a prime enabler and I hope that the right relationship is established with Ms. Pow.

#2: Media rights income. It looks as though racing is going to lose £40-60m in media rights income and, apparently, each betting shop that closes results in the sport losing £30,000. Unfortunately there is woefully inadequate transparency on this income, which has been an ongoing source of tension with the Horsemen’s Group. I can’t vouch for the figures, but it is believed that £940 of income is generated per runner, per race, with the racecourses taking most of the media rights and only a third going into prize-money. That has incensed the NTF president-designate, Ralph Beckett, who has been nothing if not vociferous with phrases such as “owners and trainers provide the show; tracks just put it on” and “racecourses and the bookies will drive the grass roots out of business”.

#3: Fixtures and racegoers. The key dilemma, at a time of declining racecourse attendance, owners and horses, is whether fixtures and the race programme should contract or expand. There has been a token reduction from 1,511 meetings in 2019 to 1,491 for 2020. David Armstrong is leading an “economic modelling project” to assess ways of squaring this particular circle. We wish him well on that one. The other big challenge is clearly with attendances, which have now fallen for three years running. The Strategy for Growth goal set three years ago was to have attendances at seven million by 2020. It was 5.77m in 2018, the average crowd per fixture is 4,000 but the median is only 1,567 and a paltry 806 on the all-weather. Thinking caps on, with this one.

#4: Welfare and integrity. Racing can hold its head high on most of the welfare front, and with the right positioning and presentation to government the level of risk (with one notable exception) is quite low. Our sport has a strong and steady licence to operate from the population at large. Integrity though is much more of an issue. I’ve often said that an investigative journalist with a hidden camera could trigger a catastrophe in our sport if three areas were closely examined: the corruption at bloodstock sales; the fate of many racehorses when they retire; and the lack of regulation of syndicates and racing clubs. A report will appear in September examining the first of these. Some potatoes are getting hotter!

I wish all the individuals mentioned the very best of success. While their in-trays are full to overflowing, positive progress on a small number of key priorities could have a huge impact on the sport. Be lucky.

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.

Welcome to Annamarie Phelps, New Chair of the BHA. Top of the In-Tray – Finances, Funding and the Levy. Oh Yes, and Racing’s Leadership Behaviour and the Need to Curtail the In-Fighting.

Annamarie Phelps commences her new role today as Chair of the BHA. I’m sure everyone in British Racing wishes her well and is hoping for a really successful new phase for British Racing under her stewardship. She is a former Olympic rower, current Vice-Chair of the British Olympic Association, and replaces the temporary incumbent, Athol Duncan. She is a recognised UK sports figurehead and, when she was appointed, the BHA underlined her main expertise “in dealing with complex political, regulatory and multi-stakeholder projects and initiatives” through her “impressive leadership skills and astute grasp of the issues facing major sports, including their engagement with government”.

I’m sure she doesn’t need me to teach her anything about leadership, but I’ve never forgotten the chairman of a major pharmaceutical company who raised his left hand in front of me one day in my consulting career and explained that you never need more than five fingers to prioritise the key strategies for any business. His view was that the challenge in a new chair’s first 100 days was to identify the three critical strategies that would really make a difference to the organisation, and then to drive them forward through the two main enablers of leadership and any necessary changes to the operating model. Rather menacingly, he then raised his right hand and said that over the 100 days you always discover the five leaders who are the blockers, robber barons and doom merchants. Indeed, I can still remember one hapless individual at this chairman’s leadership conference who, during a plenary discussion, announced that there was no way he was going to support a particular initiative: “over my dead body”. The chairman gave him a withering look and proclaimed, “It can be arranged!”

So I’ll be very interested indeed to follow the impact of the new chair during this initial 100-day period. I’ll be even more interested to find out whether any changes occur in the leadership of our sport. Unfortunately over the last 12 months there has been a shocking outbreak of in-fighting and negative behaviour within the top echelons. Although the chair of the BHA has limited authority over most of the stakeholder groups, there is certainly a need to knock a number of heads together and focus on the key priorities and opportunities.

Two very interesting articles appeared recently in the Racing Post, one by the former chairman of the BHA, Steve Harman, entitled Time to talk up racing’s future and kick on with levy development, and the second from trainer Jamie Osborne, Funding farce underlines urgent need for racing to conduct a radical re-think. Steve’s article was both optimistic and a notable call for action with regard to the next stage of levy development, while Jamie advocated the need to “stop the blame game and start thinking radically”. I’m sure both were designed to coincide with the arrival of the new BHA chair.

Steve’s article was persuasive and compelling. While some pundits in racing have dwelt on the “black hole” of the cut in FOBT stakes and its impact on media rights, his focus was on the need for racing to concentrate on £115m of funding that can readily be secured through self-help opportunities exceeding £50m per year and levy development worth a further £65m+. It certainly convinced me, and is definitely one of the fingers on the strategy hand. It is worth examining in more detail.

Without doubt, one of Steve’s most important contributions as BHA chair was the development of excellent relationships with the many politicians who are now key advocates of racing, both inside and close to Westminster. These include prime ministerial candidate Matt Hancock; Jeremy Wright, his successor as culture secretary; Mims Davies, Sports Minister; former Sports Minister Tracy Crouch; Helen Grant, Vice-Chair of the Conservative Party; and George Freeman, ex-Head of the Prime Minister’s Policy Unit. In particular, Matt Hancock had assured Steve that racing would not suffer as a result of FOBT changes, and gave a strong commitment to examine further levy development once the FOBT changes had bedded in. However, and crucially, to trigger the next stage of that development there were conditions that had to be met. In particular racing had to show self-help in a number of designated areas: building a strong global Tote, making further progress in industry recruitment and retention, further developing the equine welfare and staff welfare agenda, improving the balance of British-bred horses, pooling media rights, growing participation in the sport and meeting good governance standards.

Throughout Steve’s piece there was frustration that racing isn’t delivering on what is required to trigger further developments to the levy. It is almost as if racing doesn’t believe that Westminster will keep its word and ensure that racing doesn’t suffer financially from the changes made to FOBT stakes. The need for speed and leadership came through strongly if racing is not to stumble into a crisis of its own creation: “ …. we should be talking opportunities and growth. This industry has proved what it can do regarding levy reform. Racing needs to articulate a compelling message about growth and jobs, with great campaigning supported by quiet lobbying with our influencers.” Furthermore, “The clock has been ticking. Jobs in this industry depend on this. Anyone doubting the promises, prospects or scale of levy development needs to be corrected.”

Jamie Osborne’s concern was the lack of transparency and finger-pointing between racecourses, bookmakers, owners, horsemen and regulators. Without any doubt the financials of racing are far too opaque, and opening them up to scrutiny in a more coherent manner would be one heading in the operating model of a new racing strategy. Jamie also argued for “a radical re-think on the balance of commercial power”, which is code, I’m assuming, for scrutiny of the amount of money taken out of the sport by bookmakers and racecourses, leaving so many at the grass roots of the industry impoverished. The key message was that our funding model isn’t working well and there is a tremendous need to make the “revenue pie” bigger - another initiative for the strategy hand.

In the next blog I’ll examine a number of other priorities for British Racing, as well as the constraints that may severely limit the new chair’s freedom to act. This will also examine how the commercial value of racing is created, and the tensions that now exist in the way in which it is apportioned – definitely subjects for the left hand of strategy.

So as one former rower (indeed, having won the Mays bumping races at Cambridge and rowed for the Varsity) to another, I wish Annamarie well.

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Hats Off to the Mighty Mullins and the Punchestown Festival. Great Racing, But Are Duopolies Good For the Sport?

Well, yet another National Hunt season drew to a close last weekend. Personally I didn’t think it was one of the best we’ve experienced in the UK, marred as it was by terrible weather, the lack of the best horses running frequently against each other and in particular Messrs. Henderson and Nicholls’ domination of small field novice races, particularly the chases. The main reason though is that we’re now obviously in an era where the Irish completely dominate the sport.

The concentration of buying power in the hands of a small number of billionaire owners such as Michael O’Leary and J.P. McManus has led to the whole supply chain of top horses being routed into a small number of top yards. The virtuous circle of acquiring these horses and then harvesting the top races with them appears to have moved to an altogether new level in the last few years. There’s probably never been a period when the grass-roots owner has had less chance of acquiring a top horse. As readers of this blog know, it has forced a major rethink of how Owners for Owners purchases its NH horses, as we’ve deserted the ready-to-go but very expensive ex-point-to-pointer in favour of foals, yearlings and store horses. So far we’ve been very lucky with Acey Milan and Melekhov, but I suspect we’ll find that the prices of these youngsters will steadily climb as many owners and trainers do exactly the same as us. I’m expecting the 3yo store horse sales to be very competitive indeed this Spring / Summer.

You only have to look at the prize-money of the top Irish trainers to see what is happening. Mullins finished the season on c. €6 million of prize-money, Gordon Elliott c. €5 million, then a long way behind them Joseph O’Brien (€1.5m), Henry de Bromhead (€1.3m), Jessica Harrington (€1.3m), Noel Meade (€1.2m) then a huge gap to Charlie Byrnes in 7th place with only €400k. In effect the lesser trainers can no longer compete and it must be extremely dispiriting coming up against the Elliott and Mullins juggernauts day in, day out. It’s hardly surprising that there’s been a continuous decline in the Irish NH trainer ranks as so many throw in the towel and quit the sport. Indeed, as another graphic example, Willie Mullins started the Punchestown Festival on Tuesday €0.5m down on Gordon Elliott yet finished €800,000 ahead, which is quite extraordinary. In fact if he’d only started the season on Tuesday, with no previous winners, he’d have been 2nd in the trainer ranks five days later. This was Willie’s 11th successive season as top trainer.

Almost every day at Punchestown there were startling and head-scratching performances by Mullins. He won six of the seven races on the second day. In the Champion Novice Hurdle, all nine runners came from Mullins and Elliott (actually that’s a lie – one was from Margaret Mullins!) I was very interested in this race as it was won by Dortmund Park, who I bought two years ago but then didn’t go ahead with the purchase because he was failed by the vet. The Champion 4yo Hurdle was the third time in a season that a Gr.1 race was contested only by the two major yards. There were seven runners and the first three home were all Mullins’. Gordon Elliott had set a trainer’s record earlier in the year for the number of runners in one race when he saddled 13 in the Irish Grand National; Mullins then topped that with 15 runners in one of the races. Apparently this is a world record and in my book, a very discouraging one.

You just have to ask whether this duopoly domination is good for the sport. I think for many of the betting public it probably has no effect, as they often revel in a head-to-head in the training ranks and on the track. There was certainly a lot of media hype going into Punchestown, and the overall quality of racing at the meeting last week was superb. Wasn’t it magnificent to see the mighty machine, Faugheen, bounce back to his best? That certainly stands out as one of the season’s best performances for me. The others would be Native River in the Gold Cup; Tiger Roll in the Cross-Country and Grand National; Altior unbeaten; and the horse I most enjoy watching, Samcro, when he strolled home in the Deloitte Novice Hurdle at the new Leopardstown Festival. I do hope they keep him hurdling and go for the Champion next year.

It’s impossible to see the dominance changing soon. In the world of business the academics argue that companies compete through their networks of suppliers and partners. In racing the key networks now are the small number of the very top trainers working with their agents and breeders to ensure that the very best bloodstock, regardless of price, ends up in their yard. While this has always been the case in Flat racing, it now unfortunately seems that the same applies to National Hunt. All sports need competition and diversity. While there is obviously going to be superb competition on the racetrack, as we saw at the Festivals that now dominate our sport – Cheltenham, Aintree and Punchestown – there is a risk that the lesser owners and trainers become discouraged and we end up with a two-tier sport. Not surprisingly, nothing would give me greater pleasure in the new season than our young horses Acey Milan, Lord Condi, Melekhov and the as yet unnamed 4yo Presenting managed to compete in the premier league. Everything crossed for the next year.

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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.