“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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A Turning of the Tide on Prize-Money in 2018 – New Year’s Resolutions Being Put Into Practice

Firstly, Happy New Year, and may it be a truly successful one with lots of winners for all our owners. May the horses all be happy, healthy and improvers. One of the horses we are closely involved in running – Buckle Street, with Martin Keighley and the Condicote Clan – definitely fits into that category, putting in a really game performance to win at Catterick over 3m 2f. That was a super Christmas present for all. While up there, a number of us had an excellent discussion over a beer with the BHA’s Chief Executive, Nick Rust, whose horse Paddling was also running. This horse won at Catterick the following week, so well done to Nick and his co-owners. Indeed, he was the first person to come up to me in the winner’s enclosure to congratulate the Clan.

During the discussion with him, he flagged up the imminent announcement that prize-money in Britain is likely to reach a record £160 million in 2018, an increase of £17 million from 2017. This is a really welcome development, particularly as it follows on from an autumn announcement that £8 million of central levy funding is being channelled into grass-roots racing. Readers of the blog will know that I believe raising prize-money is the number one issue in British racing, because without it the risk is that the sport is in a downward spiral, with owners not being attracted or retained, the number of horses in training declining, and through that a lack of competitiveness in the sport that is the lifeblood of gambling.

Although the discussion with Nick over a pint and a very unusual-coloured and flavoured Catterick lamb curry was anything but formal, his statement to the press on this announcement was rather more measured. He said: “It is very important for all those involved in our sport that we are due to see such significant prize-money increases in 2018. Although there has been a gradual recovery in total prize-money in recent years, driven by increased investment from racecourses, the returns to our sport’s owners and participants have not been sufficient, in particular to those who are not competing at the top echelons. The support we received from the government and, indeed, all political parties in establishing the new levy has been crucial and means that we can target support towards those operating at the racing’s grass roots. The increased prize-money on offer in 2018 does not resolve the sport’s prize-money situation outright, but it is a step in the right direction. We hope that this good news will serve as an incentive to racehorse owners who are thinking of putting horses in training, and provide a timely boost to jockeys, trainers and stable staff, who rely in part on prize-money for their livelihoods.”

I can only raise a glass to Nick and the BHA for both the extra money and the sentiments expressed. Having said that, there will probably be a wry smile on his face when he sees the prize-money summary after deductions on the next BHA or Weatherbys statement relating to Paddling’s win at Catterick, which as an independent is definitely not the most generous of courses with its prize-money.

At the same time as this announcement, a couple of racecourses also confirmed the way the tide is now flowing. A few years ago I took issue with Newbury on a number of fronts, and like to think that I was one of the pressure points for change that led to the previous CEO being dismissed. I have a lot more time for the latest CEO, Julian Thick, so was pleased to read that prize-money is set to exceed £5 million in 2018 following an injection of £250,000 by the racecourse. As a result, total prize-money at all the track’s 29 fixtures will amount to at least £50,000, with the feature race at three-quarters of all meetings offering £20,000. Thick commented to the press that: “As an independent racecourse, Newbury is committed to ensuring prize-money levels increase as and when we can afford to make additional investment, and 2018 will see a continuation of that policy with our own direct prize-money spend increasing …. Since 2013 we have increased our executive contribution by over £1 million and 2018 will see us break the £5 million mark for the first time …. This is a reminder of our commitment to reinvest in the sport, and complements well the substantial capital investment we’ve made on fabulous new facilities for horsemen in the past three years.”

Time therefore to raise the glass again to Julian and his team at Newbury. A couple of years ago we ran our horse Shantou Magic in the Challow Hurdle, and I complained strongly to Newbury that the prize-money was less than it had been ten years previously, so it is great to see a reversal in that trend. Also for those who haven’t been there recently, the new Owners’ Club is superb. Great to see this track being improved so radically, and it is now a course that owners really like to go to, even if the preponderance of “luxury executive apartments” is not to everyone’s taste.

Finally another glass to be raised to the very progressive Chief Executive of Perth, Hazel Peplinski, who is increasing their prize-money by 35% this year to nearly £1.25 million. That also includes a new appearance money scheme across their 15 fixtures with average prize-money per race increasing to £11,500 from £8,500, with the hope that it will stimulate a rise in field sizes. Personally I am going to do everything I can to support Perth this year and will be suggesting to our trainers that if we have suitable horses, we take them there.

I’m definitely a believer in credit where credit’s due, so it’s most encouraging to be able to start the year on a positive note on the prize-money front. Don’t worry, I’ll still be applying pressure on those tracks that don’t yet seem to have picked up the message that prize-money really matters.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.

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

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


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

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

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

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

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

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

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

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

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

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

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

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.

Northern Racetracks and Part 3 of Dealing with Owners Exiting from Syndicates

It was really interesting talking to a number of our owners who went up to York for the Ebor meeting. There was a really strong consensus that York’s flagship racing festival manages to get almost everything right, and owners and race-goers are really well looked after, not least with the best value Champagne of any course in the country. Perhaps more importantly, they bumped up the prize-money this year by another £0.25m to a record of £3.5m and guaranteed place money down to 6th for all 25 races, thereby ensuring that each race was worth not less than £40,000. Well done to everyone involved in this at the Knavesmire. If only this could be copied by other so-called “festival” meetings, as owners we’d have a bit less to grumble about.

At a much lower level, also well done to Thirsk which has also boosted prize-money recently, and with a few exceptions every race there is now worth at least £5,000. Even beautiful Beverley is doing its bit for the owner experience, their latest idea being a wide selection of home-made cakes in the O&T bar. Go racing in Yorkshire! Which all adds to the reasons why we’re such positive supporters of Karl Burke in Middleham.

In the last couple of blogs I’ve been looking at some of the issues involved in terminating syndicates and exiting from horses. I’ve been arguing that partnership agreements must have an indication of the likely term of the syndicate, and that there are reviews, particularly after two years, that enable owners to leave. I am particularly against open-ended syndicate agreements where horses are kept in training even though they are distinctly moderate, but are really only running to generate fees for the syndicate manager.

One of the difficult situations to deal with, though, is when most of the owners want to stay with the horse, but one or two want to leave. This is particularly compounded when an owner decides to exit regardless by giving an ultimatum to co-owners, normally along the lines of: “I want out and I don’t intend to pay any more money.” It definitely helps if the written agreement maps out a number of principles and scenarios, such as:

• If one partner wants to end their involvement, they should at their cost attempt to sell their share to a third party, provided it is offered to other partners who have first refusal.
• If several partners wish to do the same, then again they can try to sell their shares privately, but if not the horse can go into a public auction to establish its market value (and it will be up to the continuing partners to buy it back if they want to).
• If one or more partner(s) want to sell their share(s) without going into a public auction, then two independent valuations need to be obtained, with the average of the two valuations being the basis for share buy-out, again with the cost borne by the partner(s) wishing to sell. There is no obligation on the other partners to buy the share(s).
• In all of these scenarios, there should be a requirement to continue paying training fees for a defined period, e.g. three months, or until the next available suitable sale.
• Finally there can be the very unpleasant scenario where an owner backs out precipitately, leaving the rest of the owners to pick up the pieces. This is clearly unacceptable. It should be made clear that they forfeit their share of the horse, but that will be ineffective if the horse is moderate and has little or no value. In that situation there are then only two remedies: legal pressure to pay (with threat of court action), or getting the non-paying owner on to the BHA’s Forfeit List, thereby ensuring that they will not be allowed to become an owner in British racing again.

The more explicit agreements can be, the better. However, the real key is everything to do with the horse, its training and wellbeing being actively communicated on a regular basis and at the same time, keeping very open communication with all the partners so that if anyone is becoming disillusioned and wants to terminate their involvement, it can be discussed as early as possible, in the most constructive way. Alas, however, human nature being what it is, there are always some individuals who adopt completely unreasonable behaviour. Hopefully you don’t encounter them in your syndicates or partnerships!

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.

An Owners for Owners Prize-Money Challenge – Step Change in Champions’ Days with the Launch of a Triple Crown and Real Collaboration Across the Racing Territories

As you know, in the last few issues of the blog I have been examining British racing’s prize-money (or rather, lack of it, in terms of its quantum). While I congratulated the Arena Racing Company (ARC) for the launch of their all-weather series, at the end of the day it is only a drop in the ocean, and it was disappointing that they have failed to sign up to a deal sharing more of their media rights money with racing. We need to double or triple the total amount of money that is being made available for owners and through them, trainers, jockeys and stable staff. I’m also more than happy to acknowledge the magnificent contribution of Qipco and the Qataris, and the way in which Ascot’s Champions’ Day has been promoted by all the authorities. People such as Charles Barnett at Ascot, David Redvers with the Qataris, together with the Great British Racing team and the BHA, have brought in individuals of real wealth who are injecting considerable sums of both cash and enthusiasm into our sport. Hats off to all of them.

In common, though, with many of our owners, most of us were at Cheltenham for Showcase Saturday (after a particularly fine “Meet the Trainer” morning, hosted by Martin and Belinda Keighley at their yard, and fortified by a heart-stopping breakfast in the Plough at Ford) rather than at Ascot for Champions’ Day. Why on earth do we have the end of the Flat clashing with the start of the Jumps? Utter nonsense. But then, with the current structure of the racing calendar, there is not a lot that the authorities can do about it.

Cheltenham as always was deeply enjoyable, although it is hard not to feel that this is a meeting that also needs to raise its game with far more prize-money. But it certainly focuses the mind on to the thrills ahead, and the dénouement of the Festival itself. I can already hear the roar before the Supreme Novices. Alas, while watching Ascot from Cheltenham, I don’t think you could ever envisage a similar roar occurring before the start of Champions’ Day. Indeed, the general consensus was that it was a fairly low-key day, with the Queen’s horse Estimate setting the tone with a most disappointing 7th place behind the Johnny Murtagh trained and ridden Royal Diamond. It is also pretty difficult to have champion sprint racing on soft ground, and Slade Power won from a seemingly weak field. Olympic Glory’s success in the QE2 Mile was a great result for Sheikh Al-Thani, and the horse obviously loved the going. But of course he had been beaten in the Prix Jacques le Marois by Moonlight Cloud.

Without any doubt though, Ascot did produce a candidate for “Race of the Season” in the 1½ mile Champion Stakes. This was Farhh’s last race, and will definitely have brought a smile to the faces of all the Godolphin connections after the torrid and controversial year they have endured – a great race, with Cirrus Des Aigles and Ruler Of The World a few heads behind.

But what really caught my eye after this race was the difference in prize-money. I thought that Treve’s performance in the Arc was the champion performance of the whole season. Simply breathtaking, and to win by 15 lengths, quite extraordinary. She won £2.25m, with superb prize-money down to 5th at £111,000. Compare that with the Champion Stakes - £300,000 to the winner and £14,000 for 5th. Says everything. Champion quality racing …… but ten times greater prize-money in France!!!

So, here is an Owners for Owners idea. Why not get all the racing authorities and the richest sponsors together and lay out a European Triple Crown? Kick it off in Ireland at the end of August / early September; move on to Ascot three or four weeks later; and then on to Longchamp for the Arc. Make it the richest sequence of racing in the world. Give the sponsors huge publicity. Tweak all the race terms so that trainers can go for at least two of the three meetings with their absolute top horses from anywhere in the world. Put massive marketing clout behind it that positions Europe in the early Autumn as the only place to be for top-quality Flat racing. Use it to capture the imagination of all the stakeholders in racing and, obviously, the general public as well as racing’s core enthusiasts. To make this work, there would need to be a transformation in collaboration and major changes in race planning. If it could be made to work, it would be absolutely magnificent.

2014 Prize-money – Both Good & Bad News with Arena Racing Company (ARC)

I’ve always loved Private Eye as a magazine, and have long been a follower of Lord Gnome. Much of the content has varied over the years, but as many of you will know, some themes have remained the same, with the hardy chestnuts of HP Sauce, Rotten Boroughs, Nooks and Corners, Colemanballs, Pseuds Corner …. and the immortal Glenda Slagg with her ability to argue both ways at the same time. Over the last week or two, there have been a few Glenda Slagg moments in terms of prize-money – both good and not so good.

ARC was formed from the merger of Arena Leisure and Northern Racing in 2012. They control 15 tracks and 40% of the racing calendar. The former leader of the Conservative party, Michael Howard, is chairman and Tony Kelly is the MD. The company is owned by the extremely astute Reuben brothers.

Much of the lowest grade racing in the country is under ARC’s auspices. With notable exceptions such as Doncaster, prize-money is lamentable – over 70% of the Flat races run at ARC tracks carry total prize-money of £4,000 or less. The good news though is that they have pushed up prize-money by 18% in 2013, 24% in 2014 and are now committing to a rebranding of all-weather racing, including £2m extra annual prize-money as part of an initial three-year commitment to improve the sport. 52 new Class 2 and Class 3 races are going to be included and they are launching (in conjunction with their partners Ladbrokes, Coral, 32 Red and Bookmakers.co.uk) an A/W championship series between 26th October 2013 and a new fixture on Good Friday, 18th April 2014. Horses can take part in “win and you’re in” A/W qualifiers at their Lingfield, Southwell and Wolverhampton tracks as well as at Kempton Park, owned by the Jockey Club. The Good Friday bash will have six championship categories, with each race worth £150,000, including a 7f 3yo race, 6f sprint, mile and middle distance races and a 2m marathon. It will be the richest A/W card ever staged in Europe.

Lots of people are dead against the Good Friday meeting. Traditionally there has been no racing on that day, and it is when Lambourn and Middleham hold their popular open days. Personally I thought it inevitable that this would happen, and am more than prepared to support the ARC initiative. If it raises the overall quality and prize-money throughout the winter, then that is all to the good, even though it is not a form of racing that I particularly like – not because of its being run on the all-weather so much as the dreary quality of it. I see it as just dross racing for the betting industry, but if it drives revenue and people want to support it, then why resist it? This subject will get an airing in the next blog.

So where is the bad news? Philip Freedman, Chairman of the Horseman’s Group, and Rachel Hood, President of the Racehorse Owners Association, have been working for some time, together with the authorities, on collaborative negotiations with the racecourses to secure contractual commitments linking the rapidly increasing media revenues to prize-money contribution. These negotiations have gone well ….. or at least they were doing until ARC announced, on 9th October, that they were not going to sign up to these prize-money agreements. This is a major blow, with all the key players “extremely disappointed”.

Unless there is a change of heart, this is going to put ARC at loggerheads with the industry, and may well lead to sanctions. Race fixture allocation over time can be changed so that fixtures go to the racecourses that have signed up to the contracts; bonuses such as the European Breeders’ Fund and the Racing Post Yearling Bonus Scheme can follow suit; and of course trainers and owners can vote with their feet and not support ARC courses. Collaboration has a lot going for it, but it now seems as though ARC just doesn’t want to play ball at the moment. I’m sure there will be a lot of negotiation going on behind the scenes.

Glenda Slagg would probably say: “Hats off to ARC. Can’t wait for Hunky Howard, the man in the big Chair, to put me under starter’s orders. He’s my long shot, I can tell you!! Always welcome for some late-night negotiation round at Glenda’s gaff ….. Seen the new ARC deal. What a car crash ??! Hateful Howard. Couldn’t run the Tories and can’t run a racecourse. What a loser – all bets off for me!! Send that nice John Gosden round and we’ll soon get collaboration cooking. Byeee!!”

(Get back to your blog. You’re fired. Ed.)

A One-Eyed View of Racing – Revenues Up and Costs Down

Throughout my consulting career I always made sure that clients worked hard to concentrate on both sides of the business equation – put in place the strategies and innovations to grow sustainable revenues while doing everything possible to reduce costs in a similarly sustainable manner. Incredibly, I often found many clients would only concentrate on one half of this equation, and I termed it the “one-eyed view of the world”.

I don’t know why, but I read two things recently about racing that made me twitchy and, if I’m honest about it, somewhat irritable. Racing quite rightly is determined to increase its slice of the sports and betting pie and grow overall revenue so that more money flows into the sport. For owners, the big worry is that not enough comes back to us through prize-money. And yet the sport doesn’t really seem to concentrate on the cost base. Indeed, from an owner’s perspective, I think we are often seen as a cash cow, there to be well and truly milked. So what irritated me?

I noticed that on 20th July Haydock Park was (in its own words) “turning itself into a House of Fun”, with a “fantastic summer’s night of action-packed racing and live music”. Well, the “action-packed racing” was an exceptionally dreary card with only 37 runners and most of the fields not big enough to allow each-way betting. Madness topped the bill. Maximum ticket prices were £60 and, amazingly, 19,000 people turned up, thereby generating revenues well north of £1m. Win prize-money on four of the races was less than £3,000. Doubtless everyone who paid a premium price loved the music, and it has put a lot of money into the racecourse’s coffers. But as owners, will we see any of it? Great that revenue was up, but the racing was awful. If Haydock Park is first and foremost a racecourse rather than a music venue, how do we gain anything from it? Don’t get me wrong – I’m very much in favour of using racing’s assets in a way that maximises revenue, but there must be a risk that the main experience and its raison d’être is diminished. If so, Madness.

Secondly, in the latest Owner & Breeder magazine, I read about Noel Chance retiring. Great trainer, two Gold Cup winners. Jamie Snowden is now in one of his former yards, Folly House. Noel said of being a trainer, “It’s a wonderful life. I never had a bob, but I didn’t eat in a bad restaurant or stay in a bad hotel. It’s a surreal existence training racehorses. You’re dealing in vast amounts of money belonging to other people, and you tend to lose touch with reality to a certain extent. You tend to lose the value of money, particularly when it is other people’s” (my emphasis). It is that line that irritated me.

In Owners for Owners, we’ve gone out of our way to find trainers that we admire, respect and trust. So the comments I am about to make do not apply to them. They wouldn’t be on our roster if they did.

But I do think that racing authorities, many trainers and agents most definitely do not think enough about the cost base and forget that they should be husbanding owners’ hard-earned cash and doing everything possible not to waste it. At the moment, the average return on owning is less than 20%, i.e. 20p in the pound, which is a fraction of what we find in many other countries. And yet racing only really concentrates on trying to take revenues up. Maybe it should also concentrate on bringing costs down. Lots of ways of doing that: simplify the administration; rationalise the charges; avoid wasteful multiple entries; share the transport (not charging 100% for each horse when there is more than one in a box); cap training fees (they can range anywhere from £30 to £70 per day, and yet staff costs are relatively constant); refuse to bid up sales prices to ridiculous levels (aided and abetted by the agents who love the buzz of buying the top lots); making sure there is no luck money or hidden kickbacks; and avoiding bottom-of-the-barrel syndicates that double or treble the value of horses they have bought cheaply and passed on to naïve and gullible owners.

A bit of a rant, that. I did say I was irritated. I think I should discuss all this with The Curmudgeon who has been in hiding recently. I’ll find out his views over a few pints of Donnington’s fine ales here in the Cotswolds.

The Road to Righteousness isn’t Via the All-Weather

One of our owners sent me an email recently pointing out a ride on the all-weather. I had a close look at it and I thought that without any doubt it was a blatant example of a horse being pulled. I’m not prepared to name the horse, jockey or trainer, but I definitely agree with a comment by Graham Cunningham recently on Channel 4’s Morning Line, in the context of Andrew Heffernan’s 15-year ban, that we now appear to have an integrity problem with low-quality all-weather racing. Indeed, he asked, “Is it worth the bother?”

A friend of mine up in the North of England has a wonderful Victorian stylised painting entitled “The Road to Righteousness and Salvation”. It shows a couple going through a gate at the foot of the painting. They are then confronted with two alternative roads to follow. One takes them up through the foothills of godliness into the kingdom of Heaven, while the other leads to eternal damnation. They are faced with ten temptations, at each of which they could divert from the straight and narrow way. The reason why this painting is always pointed out to me is that the first trial is to do with “cursing and use of strong language”, the second, “partaking of alcoholic liquor”, and the third, “gambling”. Well, that certainly damns the 70,000 or so who will be at the Cheltenham Festival in a few weeks’ time. By the way, the other seven temptations aren’t bad either.

So this had me wondering what ten “temptations” might be on the All-Weather, and why this is becoming an ethical concern.

1. Trainer deliberately runs the horse down the weights into a 0-55 race.
2. Keep the horse unfit and not able to perform satisfactorily.
3. Put on a claiming rider with no strength, who can’t ride one side of the horse never mind
   two.
4. Run it over the wrong trip.
5. Run it on the wrong A/W surface.
6. Put on or leave off headgear, depending on what the horse actually needs.
7. Come out of the gate slowly and get boxed in.
8. Alternatively, run it really wide on all the bends.
9. Dope it.
10. Pull it.

Nine of these appear to be becoming more common. Alas, it is hardly surprising with the lamentable state of prize money. The only way many small trainers and their owners can secure any sort of return on investment is to land a touch, and with the quality of much of the all-weather racing it has become the obvious target. What needs to be done about it? Personally I’d like to see much higher scrutiny of the performance of certain trainers and jockeys, and for that to be reflected in the readiness or otherwise to reduce official ratings. And obviously, a big increase in prize-money is essential, otherwise there will be more people in the racing fraternity departing from “The Road to Righteousness”.

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.