forum.sports-pro.co.uk

[jennywales]

THROUGH THE BINS

RECESSION WISE, RACING FOOLISH

It is almost impossible to take the whole of the complex business that is racing into account in one article – it would be too long, have too many strands, and ultimately be meaningless because too many factors would have to be taken into consideration. And in a way, this is a problem that the industry itself faces as it confronts what is possibly going to be a damaging recession (or at least, downturn). We already know that David Johnson is cutting back, and as one of the biggest NH owners, his decisions (particularly since his wealth is not inherited but acquired through decades of hard work and good business management) must reflect at least in part the possibility that racing will be badly affected by the new economic climate.

I have to say that this has not been reflected in the prices of bloodstock at recent sales (including Tattersalls) where high prices are still commanded, apparently, by high breeding. But lower down the books, I daresay that smaller breeders are getting less for their stock. In any case, the full impact of the credit crunch and the economic downturn has not yet filtered down to racing and other similar businesses. And I don’t think the question is “if” it does, but “when” it does, and how big that impact is likely to be.

To turn the argument on its head for the moment, is an economic downturn likely to have any good effects on racing? I think (perhaps heretically) that it might. To take bloodstock first. I think (and it is only an impression) that the bloodstock market has been over-valued for quite a while now. Anyone who has read the biography of Robert Sangster will recognise the process by which big money is suddenly withdrawn from the bloodstock market because people are no longer prepared to pay inflated prices, which have become inflated through possibly unwise competition between two or more large operations. If bloodstock fetches lower prices across the price range (or even lower prices at the lower end of the market) this might have the positive effect of driving breeders of poor quality stock out of the business. I have for a long time advocated some sort of limitation on the numbers of thoroughbreds being produced and brought to the market place, but found it difficult to envisage how that might be achieved – now global economics may achieve that for me! I am not saying that I am sure it will happen – but that if it does, it should be viewed as a positive not a negative.

The second good effect a downturn might have is to make a serious impact on the fixture list, both in terms of quality and quantity. People are quite right to observe that Irish racing (particularly NH racing) seems to continue to flourish (although again, this is a sort of wait and see situation) because prize money is relatively good, entries are numerous, and people wanting to go to the races, or have a bet, or both, are accommodated readily and with decent quality on offer. Not so in UK, where an overcrowded fixture list has diluted both the quality and the prize money, the latter, particularly in times of economic downturn, being a direct cause of the former. So slash the fixture list and redistribute the available prize money cash to better races on the better courses. OK, so some smaller courses may go out of business. Is that necessarily such a bad thing? I know that I would be sorry to lose Worcester, for example, but surely it is now becoming unviable. There are others (and it is no good complaining “well, that’s my local course”. If it can’t survive, it shouldn’t, because that’s what recession means.) In this regard, I think the fixture list has been driven far too much by the demands of the off-course bookmakers, in terms of all weather racing day after day after day, winter and summer alike. The BHA should square up to the bookmakers and say that if they want continued revenue from betting on horse races, that horse racing has to be of better quality, providing a balanced “menu” of races, and attracting better and more runners. The fixture list has been “dumbed down”, mainly at the behest of bookmakers, to the point where it is rendering itself unviable. The BHA should at least have the guts to stand up to the more outrageous demands of the off course chains. If they then turn their attention to other revenue streams, what does it matter? Welcome back the old-fashioned satchel-swingers at the course, the Tote which contributes to racing anyway, and the internet, which can offer betting on horse racing without the overheads of shops and staff. OK, it might be argued that not everyone has internet access or a telephone account to bet with – but I cannot see that betting shops, with their increasing emphasis on machines and casino games, are going to lose out much, if at all, from a refocusing of racing priorities. And if they do, well, then they are taking their share of the effects of the downturn, from which they surely cannot believe they should be enabled to remain immune.

An upping of prize money would also help the smaller owners who might be tempted to follow David Johnson’s example, but in their case get out of racing altogether, since they would probably only have one or two horses. With better prizes, the temptation to leave would be reduced.

What about trainers? I think the days of yards with over 100 horses are probably mostly over. As a downturn bites, people are going to look for better value for the money they are already spending, and smaller yards will have an opportunity to grow a bit (but not too much, because one of their main selling points is exactly that they are smaller). I would expect the Richard Lees and Victor Dartnalls to expand in response to demand (but not much, because the point would be lost) and the Nicholls and the Pipes to retrench somewhat. But with better prizes these movements probably won’t matter. I don’t know what the break-even number of horses in a stable with no other income is, but it can’t be much less than 20. So a redistribution of horses from larger trainers to smaller may well take place, which is probably no bad thing for all sorts of reasons. There may also be a consolidation of other equine-related services (e.g. pre-training, otherwise known to the older-fashioned as breaking and schooling!) Some veterinary operations may have to scale down or close – but the extra competition might mean more innovative, better managed and modern approaches which practices would have to adopt to stay afloat, and the same with all the other peripheral businesses. OK, smaller stables means fewer staff (which might be attractive since it also means a smaller wage-bill). Yes, some stable staff may well end up leaving racing, but even that may not be such a bad thing, because trainers will want to keep the good staff and let the less good go, which can only be to the advantage of the horses!

So what about you, me, the gatepost and all those whose custom actually at the races helps to support the courses? If courses want to remain viable, and this is assuming that both the fixture list and prize money issues are dealt with, and those courses that no longer remain viable close, what can and should the ordinary customer expect?

First, they should expect somewhat better facilities. And that means doing away with the overpriced food and drink that is such a bone of contention – if the course catering firms can’t produce decent food at a decent price, they should be got rid of and the work re-tendered to local companies and local outlets. I am frankly fed up with the Lethebys and Christophers of this world producing poor grub at outrageous prices. (I make an honourable exception for the Golden Miller restaurant at Cheltenham, where you can eat a very tasty and high-quality meal for a price that seems reasonable for what is on offer). Second, course managements should so far as possible provide decent toilet facilities, an improvement to which might range from a lick of paint to a total rebuild! Third, there should indeed be more “family friendly” days, although they should not be allowed to elbow out days which are “for” all racegoers, families or not. I think the attempt to provide racing and a “fun day out” (whatever that is) at the same time, unless restricted in the number of days on which this is offered, might backfire in terms of fewer “ordinary” racegoers attending. I don’t know enough about the detailed economics of running a course to be able to assess whether courses’ pricing policies are appropriate for a new economic situation, but no doubt the courses will find out in due time. And this might also have the effect of lowering prices, not increasing them – I suspect (with no real evidence to support the speculation!) that courses have been charging at the top of their range (since most have shareholders to satisfy); that expectation may not be so easily fulfilled in the new climate.

There are several other issues, including the question of whether there should be an obligation on trainers to enter and run horses in specific races. I have to say that on reflection I am against this, both on the general grounds that this might interfere with decisions based on the welfare of the horse, and also because as the people who pay, owners and trainers as a team should be given the option to run or not to run as they think fit. I also think that the various linked sponsorship deals (e.g. Betfair Million, Order of Merit) are not only likely to militate against welfare but have not so far fulfilled the purpose for which they were conceived (presumably, to try and ensure that the top class horses meet each more often over a season) – this could be achieved much more simply and with less welfare implications by upping prize money; the sponsorship that comes with “series” is obviously welcome, but sponsors are also likely to be cutting back, and so their money could be better spent on sponsoring specific races.

I am not, however, sure whether the racing authorities have either the vision, the guts or the administrative skill to make these desirable changes, insofar as they are in their hands, happen. In particular, the question of the fixture list and the BHA’s apparent enslavement to the off-course bookmakers renders it unlikely that they will be either able or willing to take hard decisions. But racing is resilient, and I daresay, with some changes forced by economic circumstances and some (I hope) put in place by courage and forward vision, our sport will flourish and even improve.

So a recession/downturn may not be all bad for racing, and in some scenarios may actually be good for it. But if the BHA finds itself unwilling or unable to meet the challenge faced by the fixture list as it stands at present, then all the bad things resulting from a downturn will remain, and none of the good things will be able to happen.

© Jennywales 2008