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jennywales

RACING AND THE RECESSION – A VIEW SIX MONTHS IN

There should have been a great intake of racing’s breath. There wasn’t. Last year when banks were collapsing left right and centre, when pundits were predicting general economic implosion, when American, European and UK firms of all sorts were reluctantly but realistically facing the probability of major downturn, when Governments were bailing out failures to the tune of trillions of dollars/pounds, racing was doing……precisely nothing. Or rather, looking sideways at the imminent collapse of growth economics and saying “Might this affect us?” Of course it will!

The first direct and obvious signs that all was not well with racing, as with the economy generally, were the difficulty some courses had in finding sponsors for their races after some sponsors had pulled out, and closure of Great Leighs. This Essex-located a/w track was the first racecourse of any sort to open in UK for about 70 years. Its fare was low-class, all weather racing both day and evening. When it opened to the public the public areas (including the grandstand) were not completed. The racing experience was clearly not good enough, in any sense, to attract sufficient public support, the BHA intervened to suspend the course’s license to race when it became clear that it was about to go into administration, and as yet the situation (April 2009) has not been sorted out. So a new course opened and closed again within a year. What changed during that time to cause such a poor outcome?

First, there had always been a question as to whether Great Leighs could become a viable track. Low class a/w racing needs something other than low class a/w racing to sustain it. The old arguments about opportunities for smaller owners and for bookies (particularly the Big 4 with chains that open in the evenings) were deployed to no avail. There was simply not enough money, or interest, to sustain the track. The recession, arriving when it did, could not have helped – so I think it would be fair enough to say that the Great Leighs fiasco was generated by two things – its non-viability in a racing context, and its non-viability in an economic context brought on more quickly by a drastic change in the general economic climate.

Did racing sit up and take notice? Apparently not.

Speaking of new courses, it will be very interesting to see how Ffos Las does. This is the second new course to open since Taunton in 1927. With Great Leighs going under and as yet no sign of a rescue, the situation at Ffos Las will be watched with eager anticipation, not to say apprehension amongst those of us to whom a course in West Wales will be a real bonus. But there are differences. First, Ffos Las is a mixed NH/Flat course on turf only. It is located in an area where racing is hard to come by. Irish and summer visitors are a good part of the expected crowd profile. The course is supported in a major way financially by a wealthy local businessman who also owns racehorses (including Snoopy Loopy) and whose enthusiasm knows no bounds – and the ownership of the course is with Northern Racing, which firm does not lack either experience or financial stability. So with all year round racing and with an established audience, as well as several high profile trainers with yards relatively near, it should on all accounts be a success despite the recession/depression/downturn, or whatever it is we are supposed to call it.

It does of course depend on people getting their sums and predictions right, as well as the work finishing on schedule. So we shall see…..

But what of other racing? What of sponsorship? What of the fixture list?

It is obvious even to a non-economist like myself that a recession will in one way or another affect everyone; whether it is having less disposable income, less flexibility to spend, stricter budgets or being made redundant. The effect of a recession on racing will probably be felt in stages – first, sponsorship will diminish as firms cut back on their advertising budgets (and therefore prize money will also diminish – see below about owners!) Then corporate hospitality will be affected because firms will regard it, in times of constrained or no profit, as a luxury rather than an essential. The Cheltenham Festival was this year 10% down on corporate bookings, and about the same amount down on overall attendance. Owners will, particularly the smaller ones and probably particularly NH owners, look again at the economics of keeping horses in training and may decide that they can’t any longer justify it, especially if prize money stays the same or even gets smaller because of lack of sponsorship. The market for bloodstock at the weaker end of the spectrum will dry up – at least one sale on the US calendar (Fasig-Tipton) has already been cancelled for lack of interest. Welfare issues will become more prominent as horses already racing are “laid off” or “made redundant” – there are already reports (possibly alarmist, possibly not) of racehorses being abandoned or sold to the meat men – which latter may be in all conscience the better option as long as the slaughtering process is humane, which is probably extremely doubtful.

So if the pinch is going to be felt, then where will it be felt and what can be done to lessen the pain?

First of all, the BHA needs to take a grip of the fixture list. This might seem irrelevant, but it isn’t; in fact, it is absolutely crucial, because upon the fixture list (determined by the BHA against bids from courses) depends an awful lot else. Too many fixtures mean that too little butter is being spread over too much bread. Prize money will stay the same or lessen. People who formerly went racing at their small local course won’t do so any longer because they don’t have the disposable income. Or they will save up to be able to afford the big meetings instead – I know that I have been racing less often “locally” this past 6 months, having saved up for a real binge at Cheltenham. If many more people are doing this some smaller courses will soon become unviable. I include in this Worcester (for additional reasons to do with flooding), Redcar (ripe for the developers), Newton Abbot (now almost exclusively providing summer jumping), Catterick (very poor infrastructure), Warwick (ditto) and maybe even Carlisle. Towcester is under threat because it’s in private ownership and has now been put up for sale, as has Ayr. All of these courses have competition from bigger ones, or from more prominent meetings. I think we need (or for that matter the BHA need) to recognise that some form of rationalisation/reorganisation (otherwise known as cutting ones’ coat according to ones’ cloth) must take place. Because otherwise, all of racing’s support and financial basis will gradually drain away, leaving behind a sadly diminished and outmoded “sport” with no stability and no or little public appeal.

A “rationalisation” (cutback) of fixtures will provide more butter for less bread. It will provide more prize money for higher-class racing (thus encouraging owners with the financial ability to continue, and those without to get out of racing because in times of recession any sport needs the total commitment of its supporters, without which the sport will not survive). Fewer courses will mean (if the rationalisation is geographically sound) higher attendances, a better class of racing, less breeding of poor stock formerly destined to hack around the smaller courses for a year or two before being consigned to the failure box, therefore less welfare problems.

The bookies should not scream if this happens, and if they do they should be ignored. The Levy will get smaller (because less betting turnover on horse racing), but at the same time it will be funding fewer meetings. The high street chains are fond of saying that their main profit/core business isn’t now racing anyway – so have the guts to call them on that one! Abolish the Levy and reinstate a modest level of betting tax, so that everyone who has a bet on the horses puts something back into racing. More radically still, get rid of the bookie’s involvement in racing altogether, and establish a Pari-Mutuel system as in the States or France, where all betting on horseracing is run by the State (in our case the Tote) and which contributes to racing. No doubt there will be screams and yells from the free marketeers, but their policies have in some measure been the reason why we have ended up where we are, and I don’t see that in racing terms the free market is necessarily any better than the Tote, taken by and large. And in that bastion of capitalism and the free market, the USA, it has been accepted as a normal part of racing for decades, and there is no impetus to get rid of it.

Let’s face it, people who bet on horses will go on doing so regardless of what betting opportunities are available to them. And if their betting can contribute more to racing itself, then whyever not?

Last of all, let us please encourage the BHA to get out of the bookies’ pockets. Great Leighs was established, and the fixture list expanded year on year largely at the behest of the bookies who wanted more racing so as to maximise their profits on small time, low class events, particularly in the evening (I have always been astonished at how blatantly this process has operated – in 2008 one of the specific reasons given for agreeing to more evening a/w fixtures was to provide betting opportunities for evening shop opening.)

The recession can bring good things to racing, if only the nettles are effectively grasped. It can increase the quality of racing generally. It can ensure that what money is available is spent wisely and with an eye to the future. It can affect the bloodstock industry positively, by discouraging over-production of poor animals who will end up as welfare cases or meat. It can make racing what it really should be, the sport of Kings that is accessible to everyone.

© JennyWales 10 April 2009