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BUSINESS
Racing and the Recession The reckless gambles of banks across the globe may have caused the recession, but far away from the city’s financial districts, it is training centres across Europe that are feeling the pinch. By Katie Roebuck
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OR many the joy of owning a racehorse is a luxury and not a necessity, so when money is tight it’s one of the first things to go. It is a different story for trainers though; this isn’t a hobby which can be put on the back burner until things pick up. These are challenging times. Leading flat trainer Mark Johnston has been affected by the recession; his Always Trying syndicate is not quite full and he has noticed the smaller private owners are cutting down on horses in training. Johnston said: “I am also more reluctant to buy yearlings on spec. I usually buy about 45 to 50 on spec, but for the first time in 20 years I have been left with horses I haven’t sold.” National Hunt trainer Oliver Sherwood said he has more horses going to the sales this spring than ever before. “The problem has come when syndicates and individuals have decided not to replace. With what is going on we can’t expect anything else”, Sherwood explained. “It’s not just syndicates. If some individuals were getting a five or six percent return, now they are getting zilch. Invested money which used to go on racehorses has now disappeared.” Tom Dascombe agrees. He is in his fourth season as a flat trainer and each year he has trained more winners than the last. But selling horses on has become a tricky business. “I have found one to two horses specifically have been difficult to move on. People feel quite rightly if a horse was worth
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£50,000 six months ago and it is not worth that now then it becomes difficult to sell”, he said. “We used to have a lot of partnerships and syndicates, but now it’s more sole owners. In my experience a working man who can spare three or four grand a year for a 10 per cent share all in probably can’t afford that now.” But it’s not all doom and gloom. Richard Gibson trains near Chantilly. He thinks France’s finances are in better shape as there is less of a credit culture in the country, which has had a positive effect on racing. “The surprising statistic is there have never been more horses in training in Chantilly for 25 years. I have more French owners making enquires and more first-time owners than in previous years. Marketing is based on the French premium, but if you take that away prize money remains exceptionally attractive.” Owners of French-bred horses receive a premium for all places which get prize money in races in France. According to the French Racing and Breeding Committee, France leads the way when it comes to prize money and cost recovery per horse, above the UK, Ireland, Germany and Spain. But breeders’ premiums offered in any country are not the preference of everyone; certainly not at the expense of open competition offering prize money which is lucrative in its own right. Eamonn Cullen from Irish Thoroughbred Marketing heartily believes if you strip away the French premium, Ireland’s prize money
is just as attractive. This is despite it dropping by 6.5 percent this year. Cullen explained, “Look at the figures, look how much it rose in the last ten years, no one could s ee the downturn coming and the banks going bust. In the last five years prize money has been on the up and that is a fact, it’s not as bad as everyone thinks.” In the UK after a two year slump, the Levy Board’s allocation to prize money has returned to 2006’s figure of £62.5 million. According to racing director David Bradshaw a further £900,000 is expected to be added for the 2009 calendar year. “Any effects which will result from the economic downturn will probably affect us in 2010; that is not impossible and we will have to look at prize money in that year. Beyond that we like anyone else are subject to the financial situation and the income of bookmakers, but it paints an uncertain picture.” If the UK wants to maintain its position