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The Business of Horse Sports

The best of SportsPro’s coverage of the racing and equestrian sports industries from the last 12 months.

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SPORTSPRO | FOREWORD

BREAKING NEW GROUND Alex McLin, Secretary General of the FEI Welcome to this special SportsPro supplement dedicated to equestrian sport. In 2011, the 90th anniversary year of the International Equestrian Federation (FEI), we are entering a new phase in our existence. Since the election of HRH Princess Haya as President of the FEI four years ago, we have been engaged in a construction process. We have built a team of professionals and the capacity to address the needs of our sport in the longer term. May this year will see the inauguration of the most concrete example of our construction process, the new FEI Headquarters in the Olympic capital of Lausanne. Our new home, which complies with strict Swiss environmental standards, will provide a true place of leadership for equestrian sport by enabling us to host multiple committees, FEI members and stakeholder representatives and to be better in touch with our sport, the marketplace and the Olympic movement. The building will also house a state of the art museum offering the public an overview of the past and present of equestrian sport. Our sport is expanding rapidly throughout the world. In 2010, 3,332 FEI events took place in the eight disciplines we govern: Jumping, Dressage and Para-Dressage, Eventing, Driving and Para-Equestrian Driving, Endurance, Vaulting and Reining. There is plenty of scope for that growth to continue and the primary mission of the FEI is to advance it in an orderly way by promoting, regulating and administering humane and sportsmanlike international competition. The programme Princess

Haya was re-elected on focuses strongly on development, on unifying our Member Federations by empowering and supporting them, and on the resolution of transport and quarantine issues that hinder the organisation of equestrian events in certain regions. Our President’s programme is not just about the ad hoc delivery of certain items – it does not simply concern a development programme in one region or finding solutions to transport and quarantine issues for one event. Rather, it is about delivering systemic support and value to our sport and must be implemented in a way that is sustainable. Over the next four years, we will therefore concentrate on ensuring that the key initiatives on the presidential programme are delivered and on building an institution that lasts way beyond the current administration. It is vital that in doing so, we remain aware of the needs of our members and stakeholders. This is often a complex process, as the different interests involved are not always aligned. It is part of the FEI’s role to listen to its Members and provide adequate processes to ensure that every decision is made in the best interest of our sport. Like all sport, equestrianism derives its credibility and public acceptance from the concept of fair play, the idea that the best athletes should win fairly and squarely, after competing in equitable conditions and under fair and competently applied rules. As part of its ongoing commitment to ensuring that the rules governing fair play are strictly enforced , the FEI launched its Clean Sport Campaign at the beginning of 2010, with

a dedicated website, www.feicleansport.org. The campaign aims to provide all interested parties with the necessary information and tools for addressing the issue of doping and inappropriate medication usage through a coordinated effort at several levels, including education, communication and the professionalisation of key roles in the sport. In 2010, the absence of any doping cases at the FEI’s flagship four-yearly event, the Alltech FEI World Equestrian Games™, was a strong indication that the campaign has started well. This year, education programmes will give particular emphasis to targeting lower levels of the sport and our young riders. The FEI’s quality online television channel FEI TV (www.feitv.org) will continue to take the excitement of our sport to viewers around the globe with live coverage, interviews, special features and a video on demand service that gives users around the clock access to its content. Key events on the channel’s broadcasting schedule this year include the finals of the Rolex FEI World Cup™ Jumping, FEI World Cup™ Driving and the Reem Acra FEI World Cup™ Dressage Final. All these prestigious competitions take place in Leipzig, Germany from 27th April to 1st May. With another busy schedule ahead, which will see the beginning of the year countdown to the London 2012 Olympic and Paralympic Games, the FEI looks forward to working with our National Federations and the wider equestrian community towards our common goal of building a future of growth and prosperity for our sport. SportsPro Magazine | 3

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08/02/2011 13:48:06


SPORTSPRO | EDITOR’S LETTER

ON THE HOME STRAIGHT Change is afoot in the world of horse sports. Quarantine regulations are being updated, veterinary practices are improving, gambling restrictions are being relaxed and horse sports are being promoted effectively beyond the boundaries of their traditional fanbases. On an international scale, the movement of horses, the breadth and depth of competition, and the level of interest in not only racing, but its equestrian sport cousins of eventing, show jumping, dressage, endurance riding, reining, vaulting and carriage riding, has never been greater. Equestrian sports – eventing, jumping, dressage etc – and racing share a tradition that stems back centuries. Man has harnessed the power of the horse since time immemorial. Yet despite the history of the relationship, and the universal nature of horse sports – they can be and are, after all, practised in every corner of the globe – owning and keeping a horse for the purpose of sport has never been a cheap pursuit. Whether for equestrian disciplines or for racing, the cost of buying, training, moving and maintaining an equine athlete puts the practice beyond the financial reach of the masses. Nevertheless, significant steps are being made across the globe to broaden both the appeal of and access to horse sports. Last year, to great success, the FEI brought its flagship competition, the FEI World Equestrian Games, to America for the first time. Also in the States, interest was piqued with the ultimately failed attempt of Zenyatta to beat the boys again at the Breeders’ Cup. Both racing and equestrian sports are taking on an increasingly international outlook. South America and China, where a Meydan-style

super-track is in the pipeline, are both opening up as valid markets for horse sports. The increase in quality of South African horses, and the monumental leaps in quarantine procedures that have been implemented in that country, have meant that South Africa, where buying and keeping a horse is far more economical, is beginning to make a mark on the world stage. Even in established horse sports markets, ownership is beginning to become a realistic option for those who still have to look at their bank statements. Harry Herbert, who, with his Highclere organisation, pioneered the concept of ownership syndicates in horse racing, reports that more and more people are becoming stakeholders in the sport. Highclere keeps around 45 racehorses on its books each year and with a share-ownership structure which makes owning a top-class horse possible for as little as UK£7,000 (as opposed to anything from UK£150,000 outright), it is no wonder his outfit, which was responsible for the highest-rated horse of last year, Harbinger, has managed to rebuff the effects of the recession. “Basically,” he says “we’re proving that effectively you don’t have to spend a fortune to have the greatest thrill of all, that you don’t have to splash out vast sums of money in order to play, and play at the highest level.” The power of horse sports to affect social change should not be underestimated. Princess Haya, the dynamic president of the FEI, speaks elsewhere in these pages of the transformative and liberating effect that equestrian sports can have on marginalised members of society. As a woman and a member of a royal family in the Arab world Princess Haya would never have experienced

CHIEF PHOTOGRAPHER Graham Fudger With thanks to the FEI, our headline sponsor.

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BUSINESS DEVELOPMENT MANAGERS Elisabeth Grohlich, Nick Meacham, Richard Partridge, Jeremy Ramsden, Victor Solis

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Stuart Wright

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EDITOR James Emmett CHIEF SUB EDITOR

the type of freedom she enjoyed while competing as an equestrian athlete had it not been for the sport she now governs. The Hong Kong Jockey Club, whose chief executive, Winfried Engelbrecht-Bresges is also interviewed in this publication, is the single largest taxpayer in Hong Kong and one of the most generous charitable benefactors in the world. In 2009, charitable contributions from the organisation and its charities trust to the wider Hong Kong community reached US$2.7 billion. Of course, as well as running racing in the country, the Hong Kong Jockey Club also operates a betting monopoly that includes the national lottery as well as betting on several sports other than horse racing. Few racing organisations have such a luxury. In Britain, the racing industry derives much of its income through the age-old system of the levy, by which bookmakers, operating in a competitive market, agree to give back a certain sum to the sport on which they piggy-back each year. The system has proved consistently contentious, particularly in recent years. But even here the winds of change are blowing, as both the bookmakers and the British racing industry await a parliamentary decision (due just days after this publication was due to go to print) that should see fundamental changes, including the inclusion of offshore betting and UK bets made on foreign racing, made to the levy. Furthermore, with Racing for Change making significant headway and the new British Champions Series set to debut this year, it is an exciting time to be involved in the horse sports industry. James Emmett Editor

SPORTSPRO MAGAZINE IS PUBLISHED BY: Adam Nethersole

SportsPro Media Ltd Trans-World House, 100 City Road, London EC1Y 2BP, UK Tel: +44 (0) 207 549 3250 Fax: +44 (0) 207 549 3255 Email: anethersole@sportspromedia.com Web: www.sportspromedia.com

(SportsPro Media Ltd is part of the Henley Media Group Ltd - www.henleymediagroup.com) EDITORIAL COPYRIGHT: The contents of this magazine, both words and statistics, are strictly copyright and the intellectual property of SportsPro Media. Copying or reproduction may only be carried out with written permission of the publishers, which will normally not be withheld on payment of a fee. Article reprints: Most articles published in SportsPro Magazine are available as reprints by prior arrangement from the publishers. Normal minimum print run for reprints is 400 copies, although larger and smaller runs are possible. Please contact us at: info@sportspromedia.com

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21/03/2011 10:54:39


EUROPEAN BREEDERS’ FUND In the period 1984-2010 the Trustees of the British European Breeders’ Fund have provided over £23.6 million in prize money and breeders’ prizes (flat and jump). This money is raised through annual contributions from stallion owners/syndicates and Eligibility Payments from owners and breeders of US-sired horses.

“The British EBF’s contribution to racing in 2011 will match that of 2010 (over £1.2 million to 400+ races). Breeders STILL Backing Racing!”

For more information, please contact us using the details below Telephone: (01638) 667960 Fax: (01638) 667270 Email: info@ebfhorseracing.co.uk Web: www.ebfhorseracing.com

British European Breeders’ Fund Stanstead House The Avenue Newmarket Suffolk CB8 9AA General Manager: Mrs Cheryl Caves

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07/02/2011 10:01:57


SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Kent J. Desormeaux rides Big Brown to victory in the 2008 Preakness Stakes at Pimlico Racecourse. The horse fell short of the prestigious triple crown but his breeding rights were still sold for a reputed US$50 million

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STill The SPORT Of kingS The significant costs associated with breeding, keeping and training horses are such that the horse sports industry might have felt the pressure of the global recession more than most. With thoroughbred breeding fees at record levels before the crisis struck, doubts arose as to whether the industry could sustain itself in the event of a sharp drop in worldwide revenues. Some two years on from the financial panic, against the odds, the industry has by and large weathered the storm. First published in July 2010

Although the horse sports industry comprises the disciplines of flat, jumps and harness racing, as well as the Olympic disciplines of eventing, jumping and dressage, the vast majority of the industry’s commercial wealth stems from flat racing – and the breeding operations that

supply it – as well as the gambling industry. Broadly speaking, the picture for the industry is much the same. Attendances are down slightly from the boom years leading up to 2008, while gambling on horse racing has increased, though lost out in terms of market share to other sports as the online gaming

industry continues to expand and diversify. In terms of prize money distributed, the USA and Japan are the twin beacons of the sport. According to the most recent figures published by the International Federation of Horseracing Authorities, the highest administrative body in international racing,

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Total distributed in prize money, breeders’ premiums and owners’ premiums – 2008

The magnificent new Meydan development has changed the face of the international horse racing industry and has established Dubai as a horse sports hub

Source: International Federation of Horseracing Authorities

Australia Argentina Belgium Brazil Canada Cyprus Czech Republic Denmark France Germany Great Britain Greece Hong Kong India Ireland Italy Japan Macau Malaysia Mauritius Morocco The Netherlands New Zealand Norway Peru Saudi Arabia Singapore South Africa South Korea Sweden Turkey UAE USA Uruguay Venezuela

€253,702,996 €45,777,817 €5,015,954 €10,952,279 €208,430,909 €10,448,000 €1,959,630 €2,090,239 €485,137,764 €24,143,040 €113,220,430 €15,662,738 €70,693,260 €13,581,708 €60,630,800 €154,119,715 €876,018,908 €16,820,820 €8,235,090 €2,514,830 €2,268,033 €3,286,873 €41,092,177 €29,995,446 €2,874,575 €6,170,472 €29,367,500 €22,438,409 €73,385,364 €82,427,800 €101,950,085 €26,559,617 €1,156,082,394 €3,612,957 €18,472,992

almost €671million in prize money was distributed in Japan in 2008. In the US, prize money for the year reached €1.02 billion. Edward Gillespie, the managing director of one of the UK’s principal racecourses, Cheltenham, and one of the most respected

men in the industry described flat racing recently as “merely the tip of the iceberg. The bulk of iceberg is the asset management of the breeding business, and the empires around that.” Gillespie currently presides over the Cheltenham Festival, the UK’s standout race meeting in March and the most prestigious National Hunt (jump racing) meeting in the world. Jump racing, although it does take place in Japan, USA and, to a lesser extent, Australia, is a distinctly British discipline and one that, in terms of revenue at least, pales in comparison to the financial juggernaut that is flat racing. “We’re the poor cousin of flat racing,” is how Gillespie puts it, “but we’re a much more entertaining cousin. We’re the much more amusing bloke to sit next to at dinner, in my opinion. The winner of the Gold Cup [one of jump racing’s most prestigious races] will be less valuable ten minutes after the race than ten minutes before, because his history will change and he’s very unlikely to win it again – and that’s all the value is. Whereas the winner of the Derby [one of the UK’s most important flat races] is worth, amazingly, exactly what it cost to insure the horse.” As with many facets of the sports industry, the stakes are highest in America. At the top end, a triple crown winner – a horse that wins the Kentucky Derby, the Preakness Stakes and the Belmont Stakes – can expect to command stud fees of around US$100,000. Although that is down from the peak years leading up to 2008, when Big Brown, who fell short of the triple crown when he failed to win the Belmont, had his entire breeding rights sold for a reported

US$50 million, it is still considerable. In Europe, while the fees aren’t as high as in the US, the situation has remained stable. France is a traditional racing heartland and has been a breeding centre since the 1800s. According to Capoucine Houel, who works at the French Racing & Breeding Committee (FRBC), the French equine industry has never been stronger. “In France, times are good for racing,” she says. “The prize money is still growing from one year to another. When there is money, that attracts a lot of people.” The FRBC is a not-for-profit organisation set up in 2000 to promote the French racing and breeding industry to a wider international audience. Funded by a variety of French racing bodies, its work has helped keep France as an industry leader in the face of increasing competition from all corners of the globe. “I think there has never been a better time to own and race racehorses in France,” Houel says. “The last sales, last weekend [in May], saw a 40 per cent increase. These are really good results because last year it was also an increase of 40 per cent too. Even if there is a financial crisis in Europe, we still have really good results at the sales. There are more and more owners in France, because we have a system of owner premium. The owner premium distributions in France are the highest in Europe. They consist of a percentage of the prize money received on top of the actual prize money in all the flat races run in France. If you buy a horse which has the French premium, usually they are French – born and bred in France – they get up to 75 per cent of the allocated prize

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money, for two years old; 63 per cent for three years old, and 48 per cent for four years old and up. That attracts a lot of foreigners to the sales and owners to take their racing in France because it’s really growing.” Indeed, while €106.3million was paid out in prize money in French flat racing in 2008, a further €36.3million was distributed in owners’ premiums. The unique situation in France has led to significantly reduced costs associated with breeding, keeping and training racehorses in the country. As of 2008, the cost recovery percentage per horse having run was 55 per cent – far more competitive than the 29 per cent achieved in Ireland, the next highest of the traditional European breeding centres. As things stand, France is home to 400 thoroughbred stallions and 8150 broodmares and has a thoroughbred birth rate of some 5,000 a year. Outside Europe, the Southern Hemisphere countries of Australia, New Zealand and South Africa are all big bloodstock centres. To put things in perspective, 1,700 horses are sold per year in South Africa. Peter Gibson, chief executive of Racing South Africa, the umbrella organisation that represents all the major stakeholders in the sport in the country, believes South Africa is on the verge of becoming one of the major suppliers of bloodstock on the world stage. “Last year and the year before,” he says, “foreign buyers accounted for between 25 and 30 per cent of the sales aggregate. So it’s quite a significant percentage in terms of our major sales. But I think what a lot of the foreign buyers find is that South Africa, certainly compared to the rest of the world, is the cheapest entry point. Average yearling sale price at our most expensive sale this year was about 330,000 rand, which equates to about UK£30,000.” The problem that South African exporters have, however, been faced with for some time are the strict quarantine laws in place to prevent the spread of African Horse Sickness. Racing South Africa supports a major veterinary institution, the Equine Research Centre, and Gibson is convinced that he has seen the considerable scientific advances necessary to relax the current export protocols. “Call it a five to ten year programme,” he says, “but we expect that with science and with regulatory changes,

things will change dramatically in the next couple of years. Our current quarantine constraints really do limit the number of horses we can export, and certainly there’s huge scope for us to sell into the Asian market, especially as most people believe China will come online one day. Once the protocols are relaxed, South Africa will increase its capability. We will become a kind of feeder business, pretty much like New Zealand, maybe like South America, whilst at the same time valuing the contribution of the industry as a sport and the benefits it provides the South African government through taxation and all the rest of it.” Once the quarantine protocols are relaxed, Gibson expects to be sending significantly more South African horses to Dubai, where the US$2 billion-plus Meydan development has changed the face of the industry having opened earlier this year.

A horse that wins the kentucky Derby, the Preakness Stakes and the Belmont Stakes can expect to command stud fees of around US$100,000. According to Henry Birtles, who heads up his own consultancy firm, HBA, having spent many years selling sailing and racing at international sports television producer Sunset + Vine, Dubai is one of the only racing regions that has got it right when it comes to making its mark on a global stage. “The racing federations have got to realise that it’s about exposure,” Birtles says. “Dubai certainly know it’s about exposure, and the Dubai World Cup [the world’s richest race at the emirate’s most prestigious meeting] got exceptional pan-regional coverage on the [terrestrial] networks this year.” A man who has racing in his blood, Birtles has a stark warning for the industry. He believes that, Dubai and Racing Victoria’s Melbourne Cup aside, racing has been complacent in the face of increasing competition from other sports. The sport of racing, he says, is in serious danger of slipping purely into the realm of the betting

industry. “I went to the Breeders’ Cup in 2002,” he recalls, “and most of the people there were saying ‘I’m going to play number seven,’ ‘I’m on number four’, ’I’m going to play number six,’ and I’d turn round and say, ‘number six is Rock of Gibraltar. Rock of Gibraltar has just broken the record for the most consecutive Group One wins in a season. This is a world champion; this is a serious athlete. This horse has a name. He’s not number six.’ And I went away with a real feeling of ‘God, this is the state of it here!’ We were at the Breeders’ Cup and people didn’t know the names of the horses!” Reiterating the views of Winfried Engelbrecht-Bresges, the influential chief executive of the Hong Kong Jockey Club, Birtles believes the disparate bodies and authorities responsible for the top race meetings around the world should align themselves in order to better promote the sport. “I think the industry should be budgeting,” is Birtles’ clarion call. “I think the international racing fraternity, the CEOs or heads of the federations, should get together and realise ‘hold on a minute, this sport really is in trouble.’ It is not a concern for TV programming executives around the world. It is not a concern for sports programmers. I’ve been to two Sportels [the international broadcasting conference] every year for the last 10, 11 years and I have promoted the sport of horse racing, and I can tell you, no-one mentions it to you, you mention it to them. No-one tries to buy it off you; you have to convince them, and if these racing federations were to get together and were to say, ‘OK, this is the reality. Let’s stop banging on about great international distribution because we’re on specialist racing channels. Anyone can get on a racing channel if they give their rights away. The sport is open to an agency and it bloody well needs one. The trouble with racing is it relies too heavily on itself, on its own considered expertise within the industry. It doesn’t look outwardly enough. If they were to use an agency who knows their sport, who knows its limitations, who understands and is enthusiastic about the sport, for who their sport is a priority, and that person or that company has experience in the TV industry, then we’ll get more real network coverage and the sport can really grow.” SportsPro Magazine | 9

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Faster, Haya, stronger HRH Princess Haya Bint Al Hussein became president of the International Equestrian Federation in its first-ever contested election in 2006. A pioneer in every sense of the word, she is now seeking re-election having transformed the federation from top to bottom. First published in September 2010. Princess Haya was re-elected FEI president in November 2010

Despite her protestations, Princess Haya is a pioneer and has been all her life. Born into the progressive Jordanian royal family in 1974, she became the first Arab woman to compete at an Olympic Games when she represented her country in show jumping at the Sydney Olympics in 2000. In 2006, she was elected to the role of president of the International Equestrian Federation (FEI), having previously represented Jordan at the FEI General Assembly. A year later, she became a member of thr International Olympic Committee (IOC). She is the first Arab to occupy the position of FEI president and one of just three women to head up an international Olympic sports federation. As both an Arab and a woman, Princess Haya is indubitably a torchbearer in the sports industry. The daughter of the late King Hussein of Jordan and the wife of Sheikh Mohammed, the current ruler of Dubai, 36-year-old Princess Haya is one of the most powerful women in the world. Since that Olympic debut in 2000, she has been flying the flag for women in sport. That, however, is not a concept that sits easily with her refreshingly modest outlook. “I don’t spend much time considering it,” she says bluntly. “None of it is self-serving. It was the same when I was an athlete: if I’d gone into the ring thinking ‘I’m the first Arab woman to compete at the Olympic Games,’ I’d probably have fallen off at the first fence. But I was thinking ‘where is number one? I have to use my inside leg to get to number two; watch the horse’s shoulder, number three is coming up…’ That’s what you think about and you think like that in this job as well. So you think ‘I’ve got to get to development; what’s this national federation thinking; what’s this one saying?’ You don’t think ‘oh, I’m a pioneer’. Also, I think that being a member of a royal family, you know that if you read every day

the things that people say about you, both the positive and the negative, you start living in a false image of yourself. I grew up with that, so when you get into a job like this you just think about the job otherwise you start living a kind of pseudo-self.” As a high-profile and dynamic leader of an international sports federation, Princess Haya is in the vanguard of a movement that is in the process of elevating women to a level of parity with men in the field of sports administration. Her role is invaluable not only to the federation over which she presides, but to the spirit of equality that the world of

“President rogge has done a huge amount personally to promote and support the women that are in the [olympic] movement.” sport finally seems willing to embrace. Despite making all the right noises over the years, the sports business industry has remained decidedly dominated by men. Even in the Olympic movement, often hailed as the flagbearers for the rest of the sports world, the gender disparity is still palpable. Despite some tweaks to the makeup of the Games made in August last year – the addition of women’s boxing and more medal events for female wrestlers – there is still a significant gender discrepancy within Olympic competition, something former British Olympic minister Tessa Jowell called “an embarrassment in this day and age” shortly after last year’s changes. With Princess Haya playing much more than just a figurehead’s role at the helm of the FEI, and Kate Caithness, Marisol Casado, Molly Rhone and Jessie Phua – who Princess

Haya describes as “lovely, amazing women” – in charge of the World Curling Federation, the International Triathlon Union, the International Netball Federation and the International Ninepin and Tenpin Bowling Federation respectively, women are finally gaining some respect and influence in the upper echelons of the Olympic movement. Indeed, having received significant backing from IOC president Jacques Rogge, former Moroccan female hurdler Nawal El Moutawakel has become one of the most powerful members of the IOC, presiding over the evaluation commissions for the selection of the host city for both the 2012 and 2016 summer Olympics. Princess Haya believes the sporting world has reached a natural tipping point, brought about by a sea change that took place when her generation was growing up. “I think the fact that women have kind of bubbled up in sports comes from the fact that only in my generation major sports federations started to recognise [women],” she says. “I think it was a little bit in parallel with a social movement that took place that really understood that the world would be a better place if women received a proper education, that issues like population growth and family planning would be solved as a result of having healthy, welleducated, well-fed women globally.” As Princess Haya sees it, it was in her youth that sport began to be recognised as a platform to promote a healthy lifestyle in women. “Once they’d identified it and it was science-based,” she says, “it meant that [sports federations] did have serious programmes. Fifa, Fiba [the international governing bodies of soccer and basketball] and some of the rest, they gave incentives to national federations and teams who promoted women’s sport and women started bubbling up.” Princess Haya’s own introduction to sport has been well-documented. When her

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HRH Princess Haya Bint Al Hussein photographed with her horse, New Approach, which won the prestigious Epsom Derby in 2008

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sPortsPro | THE BUSINESS OF HORSE SPORTS

Princess Haya with her husband, Sheikh Mohammed, ruler of Dubai, at Ascot on Thursday 17th June 2010

mother died when the young princess was just three years old, her father gave her a foal whose mother had also died. Princess Haya went on to find great solace in a sport she saw as a great leveller. “Now,” she continues, “this generation has actually come from the fields into administration and I think as long as that drive continues, that will continue to happen.

I’m not talking about myself, but that is the kind of woman you want in administration because it means they’re someone who really understands the job that needs to be done and not people that are placed there because of patronage or because of the women’s issue or the women’s quota. That would be a bad service for womankind.

“It is important to say that from the Olympic Committee’s standpoint, President Rogge has done a huge amount personally to promote and support the women that are in the movement. We have a lot to thank him for. I think he’s very visionary and has the ability to really make a difference. I think it is one of the things that will separate his administration in Olympic history.” When Princess Haya says she is not a pioneer, in some ways she is right. The history of the FEI has a distinctly royal and female feel. Princess Haya was preceded by Infanta Doña Pilar de Borbón, of Spain, and Princess Anne, of England, before her, while a member of a royal family has presided over the federation since 1954. At least nominally then, Princess Haya is nothing new. The attitude with which she has approached the role so far, however, and the results she has already achieved, have been both fructifying and transformative. “In my first election, one of the things that stood most against me was the fact that the national federations wanted to know that they would have a hands-on president; they recognised that they no longer wanted a figurehead and they in fact kept telling me ‘we don’t want a princess; can you promise us that you’ll work?’ I didn’t take that personally at all! I promised to work for something that I really wanted to do. I didn’t need it for my CV; I really did want to get involved. In fact, I was very, very lucky to be on a ship where everybody else felt the same way. It’s changed in every way.” Working an average of 14 to 16 hours a day, alongside her other multifarious commitments, Princess Haya instigated root and branch changes across all levels of a federation that was distinctly backward-looking before her election in 2006. While there was resistance at first – Princess Haya says she counted 76 times in her first week that the phrase ‘but this is the way it’s always been done’ was used – she insists that “staff in headquarters were really passionate. Everybody was keen to get to a positive place.” The governance system has been reformed and made much more transparent – the appointment of ex-general counsel Alex McLin to the role of secretary general in early 2008 ensured a much more rigorous and professional structure at the organisation; the federation’s

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John Whitaker, of Team GB, competing at the 2010 Meydan FEI Nations Cup event in Rotterdam on Friday 18th June

communications strategy has been vastly improved, while the commercial operations have been completely revamped and upgraded; and a brand new home for the federation in Lausanne is also almost ready. “I think [the FEI] has changed hugely,” says Princess Haya. “Mostly the culture is very, very different and the atmosphere is different in the office. When I was being elected, during the process the year before, I really made it my job to go out and listen to the federations and try to see what they wanted to do with the sport and what direction they wanted the governing body to go in. [The FEI] had followed its natural evolution and then all of a sudden it mushroomed into something a lot bigger. It wasn’t so much that I had to promise to grow the sport, it was the fact that the sport had grown and it had to be governed with modern-day instruments and really be part of the 21st century in order to survive.

“I think when I came in,” she continues, “they were really ready for change. They elected me as much on that as on the manifesto I produced. It was based on six pillars: governance, welfare, development,

“I feel strongly that the national federations will judge me on my performance rather than my rhetoric. I kind of mean to minimise the campaign and just do my job.” national federations, commercial development, and our place in the Olympic family.” Having increased transparency within the federation, provided more financial information and three-year financial forecasts, improved personnel procedures

and created an operations manual, taken significant steps to combat corruption and doping, and brought commercial revenues to a level at which they supply about half of the federation’s income, Princess Haya believes that 80 per cent of what she set out to do has been achieved. As such, she has put herself forward for another term in the FEI presidential election in November. Running against two other candidates, it is a mark of Princess Haya’s presidency that this will be the first contested FEI election with an incumbent (incidentally, the first contested FEI election ever was Princess Haya’s in 2006). In line with the new spirit of transparency and regulated governance at the federation, the election will be run by the FEI’s chair of audit and compliance, the head of the tribunal and the head of nominations, allowing Princess Haya to concentrate on the quotidian affairs of the federation. “The day-to-day work of the FEI is really my SportsPro Magazine | 13

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Princess Haya and SportAccord The last week of April this year saw the culmination of several months of frenzied work. In her role as the head of the SportAccord local organising committee, Princess Haya was responsible for bringing the world’s largest sports convention to Dubai. The event, which included meetings and discussions between all the Olympic federations, was unanimously deemed a great success and, despite not being keen to take on such a massive task again too soon, Princess Haya believes that Dubai is already feeling the benefits of the week-long conference. “I have recognised now that my future doesn’t lie in event organisation!” she jokes. “If I lose my job as a princess, I don’t think that would be my chosen line of work. The stress I don’t mind, it was the sleep deprivation that was key! It was enormous fun though.” Hosting the world’s top sports administrators for a week was crucial, insists Princess Haya, not necessarily to show Dubai off, but to allow the fledging Dubai sports industry to benefit from the experience, knowledge and ideas of the best minds in the sports world. “I discussed with His Highness Sheikh Mohammed what would be the best face for Dubai in SportAccord,” she says, “and we really wanted to show that we understood where the sport family was, literally; that it had just been through the [IOC] Congress in Copenhagen; that it had just finished with [the] Vancouver [Olympics]; and that people were tired; also the fact that we were normal human beings and Dubai was always a place associated with money and this false ceiling of reality, and we wanted to make it a meaningful event for people who understood how the country was made, priority,” she says, “and I feel strongly that the national federations will judge me on my performance rather than my rhetoric. I kind of mean to minimise the campaign and just do my job to the best of my abilities and if they see that I’ve done a good job then I’d hope that they’d re-elect me.” One area that Princess Haya has had

Princess Haya with Kofi Annan, the former secretary general of the UN, at SportAccord in Dubai

how it would be sustained and what our value system was. So it wasn’t about the wow factor, it was about really providing a nice atmosphere that was conducive to networking, and that’s really how our country was built. I think that that was probably achieved because we’ve had a lot of feedback and interaction with people since then and it’s gone beyond the event itself. But I’m positive about what it was. But when you decide to work like that, it means a hell of lot more effort and that’s what makes the difference, rather than just throwing a budget at it. “Actually what made it very tiring,” she continues, “was having to organise the event and to run around and try to pick up everything at the same time. Having that array of minds and intelligence in our country that were looking around and throwing ideas in the air about what could be done, that was something that

was absolutely priceless for all of us. The point was to see how we could benefit from the best structures and to manipulate the structures to create something for ourselves that was absolutely tailor-made to our region. We don’t have the same model as South America, Africa or Europe, and from that point of view, it was necessary to take a bit from everywhere and to really see how we would build our foundation in the Gulf and that was the process that was happening in real time. That was very tangible. We’ve been working since SportAccord on restructuring the sports council there and really laying out the foundations while it’s still fresh in our minds – we’re beavering away on that side. That’s not under me, it’s under His Highness Sheikh Hamdan bin Mohammed, but I’m happy to help where I can. But I do have to say that Hein Verbruggen and the SportAccord team were just the best. We had a really great time.”

unarguable success in is the commercial development of the federation. Revamping and centralising the federation’s offering, introducing an official broadband television channel, an iPhone application, awards programme, magazine and computer game, as well as changing the federation’s web address from horsesport.org to fei.org – “because I’m

dyslexic and I kept seeing ‘horses port’ rather than ‘horse sport’” – has seen commercial revenues swell. Over the course of the last five years, top level sponsors Rolex, HSBC, Alltech and Meydan have come on board, more than doubling the FEI’s commercial revenues from around US$4.5 million in 2005, to just over US$12 million last year.

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The capture of Meydan as a major sponsor is particularly significant. The new Dubai racing brand, comprising the gleaming new Meydan racecourse as well as the city being built around it, is now a key partner of the federation as well as the title sponsor of the FEI Nations Cup, an eight-event show jumping series that culminated this year at the world famous Dublin Horse Show on Friday 6th August. On more than one level, the Meydan signing has demonstrated a tangible link between equestrian sports and the racing industry. It is a link that Princess Haya, as a racehorse owner and the wife of one of the most prominent figures in the racing industry, herself embodies. “I think that people in the general public refer to the motor racing industry and say that rally car driving is different from Formula One, even though the common denominator is a car,” she says. “But in our case, because of the issues that we have like transport and quarantine, the links are an awful lot stronger because the common denominator is an animal that needs to be cared for in the same way regardless of what discipline it goes in. So from that point of view, our nature-based links are very strong; our scientific links are very strong – there’s a huge overlap in these industries. Traditionally, though, we were looked on as the poor cousin of racing and we weren’t really an equal partner at the table. And I think that recently, maybe a little bit as well to do with the recession, a lot of people have started realising that not everyone can ride a race horse, but every little girl has a picture of a pony or a princess riding a pony somewhere.” Enforcing that link, the Alltech World Equestrian Games, the FEI’s flagship quadrennial event, will be held outside Europe for the first time this September, in the USA’s racing heartland, Kentucky. “It’s a momentous occasion for horse sports in general,” says Princess Haya. “I think what they’ll give to horse sports is immeasurable. Really the fact that it’s in Kentucky is huge. Sport belongs to the globe and federations that accept or agree that they should have a global reach are going to be the federations of the future.” Having brought equestrian sport so far, the two major dots left on Princess Haya’s radar are increasing the commercial revenues further – “50 per cent isn’t where I want to be; I would like to see that at 70 per cent, that would just be starting to be healthy” – and

aiding the development of the sport across global boundaries. Princess Haya aims to find solutions to transport and quarantine issues across the world, something that will aid the growth of all horse sports. “Many of the issues we face – ‘unclean sport’ – come from the root fact that people are competing in such an overcrowded space,” she says. “If the world opens up to them, then they won’t have to cheat. They will be able to earn a living. [We had] our first Olympic Games in Beijing – Hong Kong for us, but we were still able to open a road to mainland China thanks to the legacy the IOC gave us, and now to look to the future of Rio: for me it’s an inspiration and an added propulsion to sort out transport and quarantine, the main issues facing our national federations now. We’ve been going through research numbers now about what horse-based statistics we have that affect the

“not everyone can ride a race horse, but every little girl has a picture of a pony or a princess riding a pony.” GDP in different countries, and we came up with one stat that for one horse you have four associated people who are given a job. That’s in Europe. If you just think about if we’re now able to open a door to China, and horse sport becomes big there, what that will mean not just to our national federations, but to the breeding industry and the horse owning and training industries as well.” While her role within the FEI has become increasingly outward-looking as she seeks to redevelop a sport that has already scaled the heights in its past, Princess Haya has been equally instrumental in her role at home in Dubai. As a prominent Olympian, she is of course a natural proponent of the importance of growing sport in the Middle East. Dubai, she believes, is now at a crucial stage of the development of a plan her husband conceived almost a decade ago. “I think that many people don’t realise that His Highness Sheikh Mohammed always had a strategic plan for sport in his country and it

came from a necessity really: the fact that the fast-changing lifestyle in the Arabian Gulf has led to us having a young generation – and we’re looking at statistics in healthcare – that has a 40 per cent rate of diabetes in children. There was a growing trend towards buying or renting athletes so that sport became spectator sport. The face of modernisation was also happening so quickly, so he really felt that he had to identify the key sports that had historical roots in the area and that that would protect the younger generation and protect their values through such a speedy development. Obviously the same man knew exactly what he was planning to achieve and I think if anybody else had known what he was planning they would have been shocked. But he did; he picked the right package of sport to do that. I had the benefit of understanding what he had in mind, and early on he did have to attract high-class events. And to a large extent, people started to have this image of Dubai and other large countries in the Gulf as just being about staging top events. It was really an image that was synonymous with money; that you can buy an event and it’s all about the biggest prize money. But actually that was the fastest way to enter the market, and to enter it at the top of the pyramid and build the pyramid down, so to speak. And it’s very smart. But really we’ve come to the middle tier now, which is building the thinkers and the knowledge base there.” As soon as that pyramid is complete, Princess Haya believes, Dubai will be in a position to host an Olympics of its own. She doesn’t know how long it will take and insists that there is no point bidding if a valuable legacy doesn’t immediately spring to mind. “I believe you need to finish building the pyramid and then you’re capable of saying ‘I would like to think about a Games’. The ultimate answer is that I don’t know a natural legacy right now. How fast we’re able to answer that question… could be months, could be weeks, could be days, could be years.” Months, weeks, days or years, as soon as the base of the pyramid is built, Dubai and the Middle East could do a lot worse than have Princess Haya at the helm as the Olympic pioneer that brings the Games to the Gulf. SportsPro Magazine | 15

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Clearing The hurdles Alex McLin, general secretary of the International Equestrian Federation, has been instrumental in the structural overhaul that has transformed the fortunes of equestrian sports over the last five years. Over that period, commercial revenues have more than doubled and the federation’s flagship event has been taken out of Europe for the first time. First published in July 2010

Ask someone to tell you their first impression of horse sports in the Middle East and invariably they will make a stab at the improbably high figure it took to design and build the world’s most magnificent racing venue, the oasis in the desert that is Dubai’s Meydan Racecourse. Thanks largely to Sheikh Mohammed, the horse-mad ruler of Dubai, the region has been making waves in the racing industry for some time now. Lesser known, however, is the fact that the region has become the de facto home of equestrian sports as well. In May 2006, Princess Haya Bint Al Hussein, wife of Sheikh Mohammed, was elected president of the International Equestrian Federation (FEI), becoming the first Arab to hold the post. Having excelled as an equestrian athlete in the 2000 Sydney Olympics, where she was Jordan’s flag-bearer, and at the 2002 World Equestrian Games, where she was the first Arab woman ever to qualify and compete at the championships, Princess Haya’s participation has been a breath of fresh air for the FEI. Today, she remains one of the only women at the head of an international Olympic sports federation and, having become a member of the International Olympic Committee in 2007, she combines a dedication, vision and political clout not seen before in the world of equestrian sports. Indeed, in the four years she has been in charge, Princess Haya has revamped the sport’s governance and ramped up its commercial activity to such an extent that the federation that exists today bears only a passing resemblance to the one that operated just five years ago. Key to that transformation was the appointment, two and a half years ago, of American lawyer Alex McLin to the role of general secretary. The fact that McLin was not

a keen horseman – indeed, he doesn’t even ride – raised eyebrows across the equestrian world but was a sure sign that the federation was serious about reform. As McLin himself explains: “I’m more of an administrator than a horseman myself. That’s actually been an advantage because the horse world is often populated and governed by people who have multiple interests. It’s not uncommon to see somebody who’s an owner, a rider, a veterinarian, a course designer or any combination thereof, which means objective decision-making becomes important. The major change that’s occurred over the course

“The horse has a role in all levels of society and we seek to ensure that the exclusivity doesn’t become a barrier.” of the last five years is that the FEI used to be a place that you came to work if you were passionate about horse sports and you did what needed to be done. Now it’s really about making sure, like in any other modern organisation, that we’ve got the right skill sets and that we’ve got the right balance. Clearly we have policy makers that are sportsmen, that are active on the ground and very much involved in the sport, but we also have an administration that can work objectively.” McLin and his staff of 60 are based in the FEI’s headquarters in Lausanne, Switzerland. They work closely with a parallel structure of committees and international volunteers to develop and enforce the rules of the seven different disciplines of equestrian sports - show jumping, dressage, and three-day

eventing, all of which are Olympic sports, as well as endurance riding, reining, vaulting and carriage driving. The administrative structure of equestrian sports is such that the FEI rules more with a guiding staff than an iron rod. “We have 133 national federations,” says McLin. “We’re a federation of independent national federations. It’s not our role to get involved in national issues. Where we come into play is we administer, we regulate and we promote the sport globally. But it also means that at times we act as arbiter and we have a tribunal for cases that arise at international events. That tribunal takes decisions on matters that affect athletes, but only at the international level. We will issue and regulate based on taking into account national concerns but we’re only active at international level.” This policy is no more evident than in the issue of doping that his gripped certain elements of equestrian sport in recent years. A year ago, the German Equestrian Federation took the unprecedented step of disbanding its national teams in the three Olympic disciplines in response to a string of accusations of illegal doping and medication use that stemmed back to the Beijing Olympics in 2008. Leading up to those Games, where Germany won three gold medals, one silver and one bronze, German teams tested positive for several banned medications. “We had to do something so that our riders wake up,” was the response of Sönke Lauterbach, the German Federation’s general secretary, following the discovery of the win-at-all-costs mentality. An independent commission was set up to probe the doping and the teams would simply not be reinstated until measures had been taken to ensure that such systematic doping could not take place again. “It’s obviously very relevant,” says McLin of the German affair, “and it’s something

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Alex McLin has been a key figure in the development of the International Equestrian Federation

that we pay close attention to, but the issue is not Germany-specific. What we’ve done over the course of the last year is thorough, comprehensive work on the issue of doping and medication and issued new rules and taken a number of new initiatives, which we’ve identified as being best practices and that we hope will also inspire national federations to act accordingly. From a regulatory standpoint, there are mandatory provisions that national federations need to adopt within a certain timeline, so we do set the standard. But in terms of specific issues going on nationally, that’s not for us to intervene in.” When it comes to the doping issue, McLin knows what he’s talking about. When he was brought into the FEI in 2005 as general counsel, he was tasked with implementing a clearer legal policy on the matter in the wake of controversial doping incidents at the Athens Games of 2004. He established a legal department that could act as an in-house prosecutor for cases and represent the interests of the federation as a whole before the Court of Arbitration for Sport, where cases end up if they are appealed. In line with the World Anti-Doping Code, the FEI tests both its human and equine athletes in and out of competition, but it concentrates the bulk of its efforts on the horses. Under McLin, the FEI has launched a ‘Clean Sport’ initiative, which not only deals with doping, through a private investigatory arm called the Integrity Unit, but also addresses the issues of conflicts of interest and fair competition within the sport. Worryingly, however, the nub of the doping issue lies not strictly in performance-enhancement, but in general welfare. “One of the things that’s been difficult to deal with, in terms of what we commonly refer to as the doping issue, is that why we’re so concerned about it is that it’s a welfare issue. The FEI equine athlete is probably the most scrutinised athlete in the world in terms of trying horses out to see whether they’re fit to compete. The list of substances is extremely broad. For example, while a human athlete could take a Nurofen or something, a horse could not take the equivalent. Why? Because that may mask an underlying welfare condition. We don’t want the horses to compete on welfare grounds as opposed to performance-enhancement SportsPro Magazine | 17

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grounds. And that has, I think, inflated the degree of the issue. I think the welfare issue and the communication of that will continue to be a challenge. The horse’s welfare is paramount to what we do.” While it is perhaps too early to see whether McLin’s anti-doping initiatives will root out an issue that has been scourging the sport since long before he arrived, his commercial plans have already borne considerable fruit, and for that he reserves great praise for Princess Haya. “She’s been quite crucial,” he says. “She really was a breath of fresh air for the federation in many ways. She really came in with an intent to modernise, to focus on a number of commercial aspects which didn’t receive quite so much attention before. She’s brought a new view that has generally challenged the status quo and it’s been very healthy for the federation as a whole.” The new health of the federation is reflected best on its bottom line. According to McLin, commercial revenues at the FEI have grown from CHF5 million (around US$4.5 million) in 2005 to CHF14 million (just over US$12 million) last year. “Perhaps most significantly,” he explains, “the proportion of our revenue that comes directly from commercial activity at the FEI level has increased from 29 per cent in 2005 to 49 per cent last year, which means this year is essentially the tipping point at which the majority of our revenue will come from direct commercial activity, which is sponsorship, licensing and so forth. We believe that that’s something we need to continue. It’s our duty to ensure that the cost of governing a sport isn’t borne more than necessary by the sport itself, so that we can become a direct contributor to the efforts of those that are trying to stage events, so that it’s a win-win for everyone.” That tipping point could well be reached as and when the FEI signs a new broadcast deal with the EBU, whose current contract expires this year. FEI TV, a web-based television platform set up over the last two years, has been gaining in popularity and the federation has recruited IMG to work on the sales and distribution. “We’re looking at different approaches and making sure that we’re evolving with the times on the technology side,” says McLin. Much of the increased revenue, however, has come from standout sponsorship deals

The Fei’s leadership HRH Princess Haya Bint Al Hussein The daughter of the late King Hussein of Jordan and the wife of Sheikh Mohammed Bin Rashid Al Maktoum, the ruler of Dubai, Princess Haya is one of the only women at the head of an international Olympic sports federation. She was elected president of the FEI in May 2006, having previously served as the FEI General Assembly representative for Jordan. An accomplished horsewoman in her own right, Princess Haya represented Jordan in equestrian sports at the 2000 Olympics in Sydney and again at the 2002 World Equestrian Games in Jerez, Spain. A torchbearer in many senses of the word, Princess Haya’s work away from the equine world is as considerable as it is within it. In September 2007, the UN secretary general, Ban Ki-Moon, appointed her as a UN Messenger of Peace. She is president or honorary president of numerous with prestigious brands such as HSBC and Rolex, and synergetic organisations such as Meydan and Alltech, a US-based animal nutrition company. Key to the federation’s

“it’s a vehicle for sponsors who want to be associated with the equestrian niche to be able to have access to those markets and to make their brands known to a new public as well.” commercial performance has been McLin and Princess Haya’s ability to tie the sponsors to events across the FEI’s vast and varied calendar. The key series on that calendar are the Meydan FEI Nations Cup, a jumping competition that runs from May to September across nine European countries; the Rolex FEI World Cup, an indoor jumping series for the winter season; the HSBC FEI World Cup in eventing; and the HSBC FEI Classics,

organisations within the UAE, chief among them the Dubai Business Women Council, the UAE Nursing and Midwifery Council and the Princess Haya Biotechnology Centre. Alex McLin 38-year-old Alex McLin officially became FEI general secretary in November 2009, having served as acting general secretary since September 2007. A legal expert, McLin studied at Duke University in the US and is a member of the New York bar, beginning his legal career at Baker & McKenzie in New York, where he practiced litigation and international arbitration. He joined the FEI in 2005 as general counsel having previously worked for both the World Economic Forum in Switzerland and as general counsel for the data-licensing division of technology company CNET Networks. a series that unites all the top-level eventing competitions. Whereas in the past the commercial philosophy might have been a little introspective, with sponsorships limited to little more than industry suppliers, McLin and Princess Haya have recognised the cachet that equestrian sport represents and have embraced, at least commercially, the sport’s elitist nature. “Whether it’s Rolex,” says McLin, “or whether it’s newer brands like Meydan, where there’s clearly an affinity with the sport, really what they get to access through their partnership with the FEI is a very particular niche – whether it’s from a hospitality standpoint or other marketing efforts, it is a very special niche; it’s also an association with a sport that has a very particular aesthetic, that values this partnership between horse and rider and it offers something different from the more, I’d say, obvious opportunities in other sports where perhaps the packages might take a little less effort to tailor. But on the other hand you have this very particular value which is sometimes hard to quantify. “In a way,” he continues, “there is a component of, yes, exclusivity to the sport and that will always remain and that is part

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Penelope Leprevost of France riding Topinambour at the Meydan Nations Cup leg in La Baule, France on Saturday 15th May 2010

of its attractiveness. On the other hand, the horse in itself is accessible to all and the horse has a role in all levels of society and we seek to ensure that the exclusivity doesn’t become a barrier to entry for those who do wish to participate in the sport and provide opportunities for them to do so.” Indeed, part of the federation’s partnership with HSBC is a commitment from the bank to fund development programmes across the world. “We have a big focus on youth,” confirms McLin. “This last year has been the year of youth in the run up to the Youth Olympic Games. We do have a development programme and our focus is really on essentially helping our national federations and helping at the regional level, creating opportunities for those regions to help themselves develop competition series, find sponsors locally and so forth; helping to find solutions to create opportunities at a regional level – that’s a big part of our activity indeed.” Aside from the Olympics, which McLin describes as a “cornerstone of the calendar; the importance of the Olympics cannot be overstated,” before adding that Olympic television revenue accounts for “somewhere below the 15 per cent mark” of the federation’s total revenue, the blue riband event in equestrian sports is the FEI World Equestrian Games. Held every four years, in non-Olympic even years, this year’s event represents two very significant firsts for the federation. Firstly, in Alltech, a title sponsor has been secured for the event for the first time. Secondly, in Kentucky, USA, a non-European

venue will host the event for the first time. “It’s very significant,” confirms McLin, “in that it’s a world Games and it previously hadn’t been outside of Europe. Obviously the logistics involved in putting together an event such as that, with seven disciplines and we have, at this point, 61 national federations who’ve signed up to take part, and we anticipate in the neighbourhood of 700 athletes, and when you factor in the horses and when you factor in certain disciplines such as driving where you’re talking about moving five horses per team, it is a very considerable effort. Given that the heartland of the sport has traditionally been in Europe, it means that putting that together elsewhere is quite a big achievement so we’re very happy about that being in the US. Kentucky is an equestrian centre within the US and what’s interesting is that we can see links being made through some of our sponsors – Meydan is sponsoring the FEI Nations Cup, it’s also sponsoring the endurance events at the World Equestrian Games. Rolex are also sponsoring the jumping events and so forth. It’s a vehicle for sponsors who want to be associated with the equestrian niche to be able to have access to those markets and to make their brands known to a new public as well.” While the US undoubtedly represents a major market for the FEI, McLin is keen to point out that the Games were awarded to Kentucky not as a result of any particular marketing strategy, but simply because they had the best bid. Going beyond this year’s event, taking place over two weeks in September, and even the 2014 event which

will take place in Normandy, France, McLin is eager to set the wheels in motion on the bidding process for the right to host the 2018 World Equestrian Games, the decision on which will be made in 2013. “Obviously we’re going to try to increase the commercial value of the event from one edition to the next,” he says, “but it’s not our absolute primary driver. Really what we’re seeking to do is to ensure that the event is run well and that participation can increase and the opportunities are provided for the sport to grow. It’s quite a technical process by virtue of the nature of the event. That limits the pool of potential candidates to a certain extent. What we’re doing now is trying to raise awareness and to just inform potential bidders as to what’s involved because we haven’t been as proactive as we might have been in the past. As we all know a lot of value comes from ensuring that there’s proper information in the market place. So we’re looking at really streamlining our bid process for 2018 and getting a lot more information out there earlier on.” As he oversees the Games’ first move away from their traditional European heartland, McLin seems eager to break new ground again for the 2018 edition. “I think the nice thing about the horse is that it’s universal,” he says. “You can find them anywhere. What’s important, like any sport, perhaps with the added complexity of the horse, it’s important that development happens not only from the top down, but from the bottom up. We’re, I’d say, a little bit opportunistic because sometimes the timing needs to be right and you need to make sure that key individuals can be onboard in the regions and make the process happen. But I would say there are opportunities in the traditional growth markets and there’s a lot of activity going on in South America and eastern Europe. China is waking up. There’s no shortage of opportunities for growth. In terms of the demographic, the key point there is really making sure we remain relevant and attractive to youth and to the young community so that the sport can continue to grow and adapt to that demographic and that we don’t become a sport that’s associated with the past given that there’s strong traditions and roots that go far back, but you have to find the right balance and make sure you remain relevant to the up and comers.” SportsPro Magazine | 19

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

BRITISH RacIng’S RenaISSance

Rod Street, chief executive of Racing Enterprises Ltd and the man who heads up Racing for Change, pictured at his London headquarters on Wednesday 10th November 2010

British racing is undergoing something of a revolution. An industrywide effort to revamp the presentation of the sport, Racing for Change, is beginning to reap dividends, and a major new flat racing series is set to debut this year. First published in March 2011

“The number one objective – our reason for getting out of bed in the morning – is to attract a bigger audience. That has to be the fundamental thing.” The words belong to Rod Street, the charismatic chief executive of Racing Enterprises Ltd and the man at the head of Racing for Change, the pan-industry body set up in 2008 to reinvigorate British horse racing. Britain has long been a bastion of horse racing. The sport has enjoyed crossgenerational, class-transcending popularity in the country that stems back centuries, and British racing’s standout events – the Guineas,

“The marketplace has simply become more crowded and I think racing has lost its space and its relevance.” the Derby, Royal Ascot – are internationally synonymous with the glamour, tradition and prestige that the sport has come to symbolise. In recent years, however, racing has lost its way somewhat. Its feet stuck in the mud of tradition, it has lost popularity and media relevance as other sports and entertainment propositions have raced past it, capitalising on the ever-changing media landscape. Even its status as the number one betting sport in the country is now under threat, as online bookmakers find ever more various sports for their punters to gamble on. Recognising the need for a revamp, key constituents of the racing industry, which

has not generally been known for its faculty for cooperation, formed a vehicle to bring about that revamp in 2008. Funded by the sale of racing data, Racing Enterprises Ltd is responsible for the Racing for Change initiative which is comprised of an eight-man board and represents the interests of owners, trainers, breeders, jockeys, racecourses, bookmakers and the British Horseracing Authority (BHA, the governing body of British horse racing) under one banner. “There are two things that need to change really,” explains Street. “It’s been a sport predicated on betting since the dawn of time. And until quite recently it was the dominating factor in betting. So if you walked into a betting shop 20 years ago to have a bet, you’d most likely be having a bet on a horse. So if you were a punter, you were by definition a racing follower. What we’ve seen in the last two decades is exponential growth of gaming in all sectors. People now can bet on football, play online poker, bet in running on all sorts of sports; they can play lotteries. So racing is now just one of a number of betting offers. The marketplace has simply become more crowded and I think racing has lost its space and its relevance in that market. That has quite a big cultural knock-on: racing has a very, very hard core of regular supporters, many of whom have been educated through initially being a punter on racing. And we’re no longer educating those numbers in the way that we were 20 years ago.” The second key problem, says Street, is that racing is now competing in a very crowded leisure marketplace. “People are spoilt for choice,” he says. “Time is at a premium.

Racing, like all business and industries, is fighting for space. Our broadcast rights evaporated to being worth next to nothing, and racing ended up paying to be broadcast on Channel 4 every Saturday. Since 2008, we’ve been paying to be on television. The message we’re being given by broadcasters there is that your product isn’t worth anything. So racing had to ask itself some questions as to why it hasn’t got the value, why it isn’t compelling, why it’s not a must-have for a broadcaster.” With so many different constituents, many of them entrenched in their own ancient tradition and often with diametrically opposed interests to each other, the first challenge facing any move for change was to galvanise a collective spirit and will within the racing world. Key to that was the full cooperation of the Jockey Club, the most prestigious and

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powerful racing body in Britain. As the owner and operator of 14 racecourses (out of a total of 60 nationwide), including seven of the top 12, as well as the National Stud and training grounds at Newmarket, Lambourne and Epsom, not to mention media interests that include the biggest stake in Racecourse Media Group, the organisation that handles the rights for 30 racecourses around Britain and runs racing-dedicated television channel Racing UK, the Jockey Club is by some distance the most powerful commercial operator in the running of British racing. Very little of any significance happens in racing without the Jockey Club, which was founded in 1750, giving its blessing. Fortunately for Racing for Change, Simon Bazalgette, the Jockey Club’s dynamic chief executive and quite possibly

the most powerful man in racing, has been a driving force for the initiative. Bazalgette’s first taste of racing administration came when he became the founding executive chairman of Racing UK in 2004. With a background in music and broadcast media, Bazalgette has had his fair share of experience at galvanising disparate stakeholders into one united body. “In the music business, I ran what was effectively a cooperative of Sony, Time Warner and EMI for the greater good,” he says of his spell as the chief executive of Music Choice Europe. “And Racing UK was set up and owned by 30 racecourses. So we know how to make sure a cooperative goes hand in hand. “Racing for Change was always going to be a difficult job,” he continues, “but hopefully Rod has had the support of people like us

and people like the BHA.” Having brought key representatives of the sport’s different stakeholder groups to one table, the next challenge that Racing for Change set itself was to undertake an industry wide analysis, using external consultants as well as canvassing thousands of opinions from within racing’s every nook and cranny. A Deloitte report into the economic state of racing was also commissioned. At the beginning of 2009, Street and his team began to pull together all the thoughts and ideas that had come from the consultation period and to look for common themes. “We acted as a filter for all that feedback,” he says, “and that led really to the first stage in a long-term strategy for racing to make itself more relevant.” Underpinned by a consensus that a new, SportsPro Magazine | 21

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Racing in numbers Source: BHA/Deloitte

A Deloitte report, published at the beginning of 2009, revealed that British horse racing was worth some UK£3.7 billion to the UK economy in 2008. Other headline numbers include: · 5.7 million – total 2008 racecourse attendance · 4 – the number of race meetings in the top eight attended events of 2008 · 18,600 – full-time jobs in the core racing industry · 52,000 – full-time jobs in the onshore betting industry · UK£367 million – horse owners’ gross 2008 expenditure · UK£207 million – estimated 2008 expenditure of the British breeding industry · UK£361 million – generated by British racecourses across 2008 · UK£325 million – contributed in tax in 2008 wider audience needed to be attracted to racing – “it makes you more relevant in the media; it increases your potential broadcast values; attendance on racecourse brings more income,” – Street and his team came up with a ‘four pillar’ concept: Explaining the sport better; improving customer service; addressing the loss of market share in the betting market; and promoting racing’s premier events. “We need to tell our stories better,” explains Street. “Where racing has got a hell of a lot to be optimistic about is that it’s got fantastic assets; it’s got tradition, which is valuable; it’s got spectacle; it’s got great drama; it’s got great colour and excitement; it’s a 52-weeks of the year sport over flat and jumps; we’ve got remarkable horsemen. We’ve got all these assets and we rarely get our great stories out of the racing pages. There simply hasn’t been a force at the centre of racing promoting the sport. We simply need to do significantly better PR.” To that end, Racing for Change has been behind a number of initiatives that resulted not only in a small percentage rise in on-course attendance last year (no mean feat in the midst of a worldwide recession), but, more

Racing for Change’s work is underpinned by a consensus that a new, wider audience must be attracted to horse racing

importantly, greater exposure for the sport in non-traditional racing outposts. University racing clubs were formed to bring a younger generation into the sport; racing ‘ambassadors’ were appointed with the aim of explaining the sport better to casual spectators; several racecourse were signed up to a ‘free week of racing’ campaign in April that saw 40,000 more race-goers than the comparable week the previous year; decimal odds were trialled (although to little success); a racehorse was given to popular soccer magazine show Soccer AM; professional media training was given to jockeys and trainers; a concerted and successful campaign to promote the sport’s leading exponent saw AP McCoy voted as the BBC Sports Personality of the Year at the end of 2010; and articles were placed in mainstream publications throughout the year. “This year we placed 50 major features across the national media on jockeys and trainers, focusing on the sport so people see jockeys as sportsmen and trainers as providers of great sport, perhaps in the way that team bosses are in Formula One,” says Street. “That’s stories off the racing pages. We don’t count what’s in the racing pages because that’s our own community. The message is getting through that if we promote ourselves better, if the sportsmen within racing put their best foot forward, actually not only does it increase the sport’s profile and value, it increases their value.”

Such was the reticence of the sport’s stars to dedicate time to the PR push that the racing authorities took the unusual step of compensating jockeys and trainers for media commitments they undertook for non-traditional racing outlets. “We incentivise the jockeys to help build the sport,” explains Bazalgette, “because unlike a lot of sportsmen, they’re not retained by clubs. We recognise that we have to incentivise them to go above and beyond the call of duty. Hopefully we’ll get to a stage where they’ll start to benefit from that with wider endorsements and actually it will become a self-fulfilling prophecy.” The logic behind the idea of coaxing jockeys into more media engagement is clear: they will promote both the sport and themselves and then everyone’s a winner. The reticence, however, may come from the fact that jockeys are perhaps the most hardworking, underrewarded sportsmen on the planet. “Your average jockey is up at the crack of dawn riding out,” explains Street. “He’s doing a morning’s work before he goes to work. In the summer, he’s probably doing an evening meeting as well, so a jockey’s day can be 6am until midnight, and in the height of summer they can be doing that six days a week with only a small breather on Sunday evening. So they don’t feel valued. We would never advocate them charging to talk to racing journalists on course because that’s the day job. But for them to go and sit

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Rod Street Former stand-up comedian Rod Street was made chief executive of Racing Enterprises Ltd in February 2010. Project director of Racing for Change since 2008, he began working in racing in 1994 when he was appointed as assistant commercial manager at Uttoxeter Racecourse, owned by Northern Racing. From a one-racecourse company, Northern Racing grew to nine tracks and he was appointed group managing director of the company in 2002, prior to its flotation on AIM in 2003. “As a teenager I was a bluecoat at holiday camps and that led into leisure and entertainment,” he says. “I used to promote comedy at clubs, promote bands and perform comedy. down with the Observer or to sit down and do something with the Mail on Sunday magazine, we’re actually paying them, and I think that’s made a difference because I think it’s given them a commercial value.” To give jockeys more time to promote themselves and the sport, cuts to the fixture list have been discussed, but cons outweigh the pros as far as racing’s administration is concerned and the fear is that the lost fixtures will simply be replaced in the betting marketplace and the sport will never get that space back. “I think maybe the answer is for us to focus more on a tiered structure,” says Street, “so we start to think more of a premiership of racing, a championship of racing and then, if you like, a conference of racing.” Despite the phenomenal workload, the gruelling dieting regimes, and the regular and regularly horrendous injuries, jockeys are perhaps the most accessible of all sportsmen to their fans. “There are no other sportsmen that get as close to their audience as jockeys,” says Bazalgette. “They walk through the crowds; they shake hands and talk with people. You won’t see footballers doing that, certainly not Premier League footballers. Although at my team, Brentford, we get a bit of that. It’s swings and roundabouts. I think racing people feel closer to jockeys than fans of any other sports do to their sportsmen because they can reach out and touch them.

They’re right amongst them.” Of course, once the sport’s key players spread the message wider and deeper and attract more spectators to watch them in action, those new spectators need to be given an experience that will keep them coming back. Racing for Change has, to this end, put a strong focus on enhancing customer service across British racecourses. “I think it’s fair to say that the racing experience could be

“I think racing people feel closer to jockeys than fans of any other sports do to their sportsmen.” described as a curate’s egg. It’s good in parts, but there are aspects where we could learn from other sectors who do customer service brilliantly – from where people eat and drink, where people park, to how information is shared on a race day. Customer care isn’t about one thing, it’s about 1,000 small things that make the experience better. So that’s been a huge focus,” says Street. The betting market represents the third pillar in the Racing for Change strategy. Outdated legislation and annual battles between the racing industry and the bookmakers notwithstanding, the levy, the method by which

I think that’s given me an instinct for bums on seats because everything I used to do was about getting an audience to come and giving them a good time. And you develop a thickish skin.” As the face of Racing for Change, a movement that has taken some flak from the industry it is trying to revamp, Street has needed that thick skin, as Bazalgette explains: “Rod has stickability. If you want to deal with any industry where you have people as passionate as in horse racing, you have to stand up and take the smooth with the crunchy, as they say. And both Rod and Karl Oliver have shown that they can do that and they’re getting on with the job.” the bookmakers invest an agreed sum back into horse racing each year, is a crucial revenue stream for the sport. While the marketers in the movement for change are understandably trying to push racing on its sporting merits, they recognise that it would be disingenuous to suggest that the sport was not predicated on betting. “The two are inextricably linked,” says Street. “Racing and betting are absolutely wedded. We’ve got to address how we can reverse the trend in the decline in market share and make betting on racing more appealing. Something that we have to accept and face up to is that the new generation have less time. People like things fast and simply packaged, and we’re not going to get a whole new generation of people becoming those form experts that perhaps has been a great luxury for the sport for the past 40 to 50 years. We’ve got to make racing more immediately accessible; we’ve got to explain our language. As one of our external consultants rightly said, you ask people to learn two languages when they go racing: the language of racing – ‘on the bridle’ and ‘pulled up’ and all of that – and the language of betting. That’s quite a big ask. At least when you introduce people to another sport they’re only learning one language. So there’s a big focus on just explaining the product better and making it more accessible. We’re incredibly realistic about that. We don’t think we’re going to create millions of new aficionados in betting shops becoming SportsPro Magazine | 23

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

form experts, but there’s no reason we can’t have occasional punters who dip into racing now and again as their bet of choice. Betting income comes directly back into the sport via the levy, so getting people betting on racing has a direct effect on our financial health.” Aside from raising awareness of the sport, which is necessarily an incremental process, the ‘pillar’ that Racing for Change has implemented most radically has been in repackaging the sport to make its best events more prominent. “It’s about putting our best stuff in the shop window,” explains Street. “It was felt that one of the things that racing did as a sport was not really put its best foot forward and it rather hid its light under a bushel. To the wider consumer, beyond the aficionado, people looking at racing weren’t really sure what they were looking at. Tune into Channel 4 over the 52 weekends; if you’re not an aficionado, you might not know you’re watching the very best chase that month or the most important flat race in the summer. It’s really about creating frameworks to push our premier products in the way that other sports do successfully. We can’t copy other sports necessarily; it’s very hard to have leagues in racing in the way you have leagues in other sports, because the horse racing industry is not structured for that because the ownership of horses is so fragmented. But to actually have a framework that presents the product in a much better way, to say this is the good stuff and that’s why it’s the good stuff, is a key thing.” The most obvious initiative conceived from this pillar is the new British Champions Series, set to debut this year. Essentially a repackaging of the 35 best races in the British flat racing season under one banner, the new series, explains its chief executive Karl Oliver, who was involved as an external consultant in the initial canvassing period undertaken by Racing for Change, “is a united effort on behalf of the industry to take the sport to where it wants to be.” Starting in April this year, the series will encompass British racing’s key festivals, including the Guineas Festival at Newmarket, the Epsom Derby Festival, Royal Ascot, the Newmarket July Festival, Glorious Goodwood, the Ebor Festival at York and the Doncaster St Leger meeting. The total prize pot for the new series will be in excess of UK£13 million,

Simon Bazalgette and Karl Oliver, pictured at the Jockey Club headquarters in London on Friday 28th January 2011

with a British-record UK£3 million on offer for the series climax, the newly-formed British Champions Day at Ascot in October. British Champions Series Ltd, the new company set up to handle the administrative and commercial interests, is owned and funded by all ten of the series’ courses – one of the largest shareholders being the Jockey Club – as well as Racing Enterprises Ltd. While there has been substantial criticism from some corners of the racing world – corners that don’t like to see their time-old fixtures fiddled with – the new series is a majority-backed attempt to inject those

ingredients most prized in the modern day world of commercial sports: structure and narrative. “This is an opportunity for us to showcase the very best of the best,” says Oliver. “And whenever anybody sees the name British Champions Series attached to a race, they will know they’re watching the best of the best. It is the Premier League of British horse racing. It is the Formula One of British horse racing. I think that’s what the sport has lacked for many years – that very simple, easy to understand, easy to follow, clear championship narrative.” With the BBC already signed up as the

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Simon Bazalgette Simon Bazalgette has been called the most powerful man in British racing. As chief executive of the Jockey Club, a position he has held since 2008 when the organisation adopted a corporate structure to align with its new solely commercial role in racing, Bazalgette heads up the biggest and most important commercial entity in British racing. An accountant at KPMG in the early part of his career, he has considerable experience in the music industry, having joined Music Choice, a joint venture between BSkyB, Time Warner and Sony, as strategy and business affairs director in 1993. By 1999, he had risen to the role of chief executive. In

2004, he became the founding executive chairman of Racing UK and was responsible for a number of successful start-up media propositions therein. A naturally progressive businessman, he was not a hardcore race-goer before taking the Jockey Club role. “I was a typical person who would go horse racing occasionally and not really understand it,” he says. “I would always enjoy the day. In fact, I haven’t met anybody who’s had a bad day at the races. And now I’m hooked. I own shares in racehorses. I take my family racing, even when I don’t have to go and schmooze people. It does become addictive.”

Karl Oliver Karl Oliver was appointed chief executive of British Champions Series Ltd upon its inception in September last year. Having spent time in the entertainment industry as a marketing and sales director at Universal and Paramount, Oliver has a strong sports sponsorship background. “My first job was sponsorship, using Listerine, of the British Touring Car Championship,” he says. “Then I was with Unilever for four years working on Flora’s sponsorship of the London Marathon.” Oliver became managing director of Swatch UK in 1994 and was instrumental in the company’s decision to sponsor the Olympic Games broadcaster and international distributor for the new British Champions Day – a twoyear deal reported to be worth a six-figure sum – the new series has already begun to reap dividends before it has even begun. “The starting point is about engaging a new, younger, upscale audience,” explains Oliver. “That will be one of our primary objectives and it will, in time, result in increased media rights value for our property.” An overarching series sponsor is expected to be found before the start of the series and both Oliver and Bazalgette are expecting strong competition. “This is a unique

in Atlanta. He was also responsible for repackaging the International Cricket Council’s commercial and broadcast rights for the cricket World Cup for the 2000 to 2007 period: a blueprint, he says, which led to the generation of over US$500 million for the ICC. “Sadly I wasn’t on commission,” he adds. Having set up and then sold his own consultancy, The Rights Business, by 2007, Oliver says he was looking forward to an extended period of rest before the phone rang: “I got a call from Simon Bazalgette, asking me to have a look at this interesting proposition in horse racing.” commercial partnership property that we can take to market,” says Oliver. “This is the first time in the history of something like 300 years of racing that it has been able to take its very best product to market under one brand, and give a commercial partner the opportunity to engage on multiple occasions through the very best of the British flat racing season with the wider consumer.” “We want somebody who’s committed to the idea and wants to work and grow with us,” says Bazalgette. “Because we know this is a new championship and therefore we’re not going to get everything right in the first year

and we’re not going to have the ability to do everything in the first year. We want somebody who’s going to be a genuine partner and wants to grow the series and the events within the series. We want somebody who’s going to stick around; somebody who’s got marketing power and marketing nous to think about what’s really going to work to build this series to where it needs to be. It’s not just words; we’re saying this to potential partners. “I think everybody will benefit financially from this,” he concludes. “We’d like stakeholders in racing to give this a proper chance. They’re passionate people in racing and I’m sure they’ll be keeping a close eye to make sure we’re delivering on what we’re saying.” In a sport where resistance to change is almost second nature, the work that Racing for Change has already achieved has been nigh on revolutionary. To create the new climax to the flat racing season, Newmarket, a Jockey Club racecourse, gave up a meeting so that Ascot could host British Champions Day. “To the outside world,” explains Street, “it might not seem like we’ve been radical enough. Yet just to move a race from Newmarket to Ascot, in this traditional game, was an immense move. In the Jockey Club and Ascot, you’re talking about institutions steeped in history that were giving things up to make something happen.” Street believes that, should Racing for Change prove successful, that success will only truly be recognised in hindsight. “I think that’s pretty common in most industries,” he says, “sport particularly. The best we can hope for in the short term is if the British Champions Series is a roaring success that lots of people will say ‘oh, I always said that should have happened.’ From the outset we said we think this is a five-year plan.” “I think Racing for Change has already moved a hell of a long way,” Bazalgette opines. “We’ve done a hell of a lot and we will continue to do a hell of a lot. We’re starting to expand the horizon for racing and I think that’s absolutely critical. Has everything that Racing for Change tried worked? No. But frankly that’s marketing. We’re perfectly aware of the famous saying, ‘half of your marketing is wasted, but you never know which half.’ I think Racing for Change has probably had a better hit rate than that, but unless you get on with it, you’re not going to get anywhere.” SportsPro Magazine | 25

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Richard FitzGerald photographed at Racing UK’s headquarters in central London on Tuesday 9th February, 2010

BREAKING THE BROADCAST MOULD With terrestrial coverage on the wane in Britain, a new breed of horse racing-dedicated channels has stepped in to fill the breach. One such channel, Racing UK, entirely owned by the courses it covers, has risen from the ashes of Setanta’s demise to play a key role in shaping the industry. First published in April 2010

“If you’re a real enthusiast, it’s a must have.” So says Richard FitzGerald, chief executive of Racecourse Media Group, the organisation that runs the standalone racing channel about which he is speaking, Racing UK. Launched in 2004, the channel focuses on live racing from 30 of Britain’s 60 racecourses, as well as the top

events from around the world. “Our job is to show them all and to showcase them,” says FitzGerald. “As our motto says, ‘pure racing entertainment’. But we’ve got to create that interest. We do that not only through the live racing, but also through a really strong team of pundits and talent. We have a significant slice of the quality end of the racing – 85

per cent of what is shown on terrestrial with Channel 4. Obviously, we show every single race, and that’s the real key value of Racing UK to our customers.” As opposed to At The Races, the other racing-specific network in Britain that covers the other racecourses and is operated by Sky, Racing UK is fully owned by the thirty SportsPro Magazine | 27

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Racing UK is owned by the 30 British racecourses from which it broadcasts

Racing For Change – Ten steps to modernise a sport Racing For Change (RFC) is an industry-wide body, set up towards the end of last year, with a mandate to modernise racing and make it more accessible to a wider audience. All of the sport’s key stakeholders are represented in the organisation, chaired by Chris McFadden, chairman of Racing Enterprises Ltd. At the beginning of January, RFC revealed an initial list of ten trial measures designed to bring “positive change for the sport and its customers.” The initiatives will all be implemented in the first half of 2010 and although none will bring profound changes, the idea is that they will herald a new atmosphere in racing ahead of more fundamental structural reforms to be announced later in the year. Chief amongst the initial changes is a move away from the age-old system of fractional betting odds. The new decimal odds, though unfamiliar to many gamblers, have already been popularised by Betfair and are, in truth, a lot easier than fractions to get to grips with as a novice. Another significant step is the decision by RFC to give media training to jockeys and trainers, and to set aside a budget to pay fees for individuals who make appearances

venues it represents. As well as showing all the action from the courses through Racing UK, Racecourse Media Group represents the media rights for all of its courses as well as holding a significant stake in TurfTV, which broadcasts directly into 10,000 bricks and mortar bookmakers across the UK. Having forced its way into a market previously operated by a monopoly in 2007, TurfTV has come through a quagmire of litigation to establish itself as a genuine player in the lucrative bookmaker-specific broadcast market. “It’s a very successful entity for racing because it’s actually half owned by racing,” says FitzGerald. “So significant revenue streams will go back into racing. We believe it’s a big step forward.” The same can be said of Racecourse Media Group as a whole. Uniquely, it is entirely owned by the racecourses it represents. “It’s

a slightly different structure to certain media organisations,” confirms FitzGerald, who took over the reins in 2008 having spent 18 years with IMG. “Certainly in terms of live action,” he explains, “obviously you’ve got the likes of Man Utd TV, which is partly owned by Manchester United – they’ve managed to get back to majority ownership – but I certainly think in terms of full exploitation of those rights by the venues for ownership of live, yes, I think it’s very unique. Our corporate governance and our board are very strong. One of the real powerhouses of the organisation is the input from our non-execs. They’re very clear and they’re very together and they understand the industry and their business. So actually the decision making process is very easy.” A recent study by the Sports Business Group at Deloitte, The Economic Impact of

outside the mainstream racing media. In a move away from the traditional protocol still championed by the longer forms of cricket, jockeys and trainers will both soon be listed on racecards by their first and second names, rather than by their initials. While steps are being taken to make the sport easier to understand, active measures are also being made to attract a new audience. Eight racecourses across Britain will offer free admission over the final week of April, while a free club for “younger adults” will offer discounted admission to tracks as well as shares in horses. A specially designed website will be set up with basic information about the sport and the best way to get involved. Both new and current racegoers will hope to benefit from a scheme to “encourage” on-course bookmakers to offer standard each-way terms, while RFC believes “race names should be simplified and racecourse announcements modernised”. There will also be an attempt to bring some of the excitement of line-call challenges at top tennis events to the racing experience, with the outcome of photo finishes displayed on big screens as the judge announces the result. British Racing Report, found that horse racing was the second biggest sport in the country after soccer ‘by many measures’. The report found a core industry with annual expenditure of over UK£1 billion and a total economic impact of UK£3.4 billion. Total spectator attendance at racecourses across 2008 was 2.08 million. Having traditionally filled its Saturday afternoon schedules with racing from across the country, Britain’s national broadcaster, the BBC, has spent the last few years dramatically scaling down its racing coverage. Indeed, the broadcaster will now show only 13 key racing days a year, focussing on the headline events of Royal Ascot and the John Smith’s Grand National. Against that backdrop, the notion of a subscription-based horse racing-dedicated channel in Britain seems like a lucrative one. However, almost from the moment he first set

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Gold Cup winner Ruby Walsh has been signed up to promote Racing UK

foot in his new Racing UK office, FitzGerald was faced with a potentially business-crippling problem. Having started life as a standalone channel in 2004, Racing UK was soon bundled into a package offered by the doomed Irish broadcaster Setanta. When that went under in June last year, Racing UK, along with several other sports channels, was faced with the daunting challenge of starting afresh and building a subscription base basically from scratch. “No problem,” FitzGerald recalls of the situation, with a smile, before blowing a dramatic sigh of relief. “To be fair, we half expected Setanta’s demise; it was pretty signposted. Within reason, once Setanta had got themselves into problems, they were quite upfront about their issues, so we could at least plan for it. I think it was unique on the basis that you had seven channels going down in a day. We had to secure an Ofcom licence. And you can’t apply for an Ofcom licence if the channel’s already got one. It was a bit messy, but to be fair we got a bit of a head start on that and I was certainly very pleased with how the team delivered, both on the production side and on the marketing side. “The pleasing thing for us was that the subscribers actually went up,” he continues. “The key thing for us was the price point. We had decreased our price as part of the Setanta package and with special offers and such you could get nine sports channels as well and we never had to take a view on that. And actually we did go for UK£20 a month and we’re not planning to discount on that – maybe the odd special offer – but generally we’re going to stick at that. We’re thrilled that the subscribers have come back and actually we’ve grown it

to around 40,000, which we’re thrilled with.” Not only has that subscription base grown, but it has grown by some margin. Prior to joining Setanta, the channel had some 33,000 subscribers. 85 per cent of the company’s revenues come from subscriptions – the rest is made up largely from the limited number of onscreen partners it allows itself, notably its four premium betting partners, Victor Chandler, Ladbrokes, Skybet and Blue Square. Since leaving Setanta, FitzGerald is delighted that his marketing team, headed by Nick Mills, has apparently hit upon a winning formula. “The easiest way to describe to you,” he says, “is that in the old days on Setanta our marginal revenue for a subscriber was maybe UK£3. It’s now UK£14 a subscriber, and that’s just on the residential; the pubs and clubs business is obviously considerably more. Therefore marketing is the lifeblood of what we do, and we can justify greater spend and greater effort.”

“It was a bit messy, but to be fair we got a bit of a head start on that and I was certainly very pleased with how the team delivered” To that effect, FitzGerald has been at the forefront of a movement to make more of the jockeys – rarely seen as the real protagonists in horse racing – in the media. A unique partnership with Aidan Coleman – a giant of a jockey at six foot – signed last year has been followed by a three-month deal with Cheltenham specialist Ruby Walsh. “Individuals make the stories as well as the horses,” says FitzGerald. “They’re the hardest working professional sports people and I don’t mean that lightly. These guys work bloody hard. We’re going to introduce media training for jockeys. We’re going to start speaking to jockeys when they’re weighing in and after the race – just making sure they’re not running away.” FitzGerald, who has a stake in a race horse in South Africa but admits that prior to joining the company he was not a racing fan, is keen to approach the industry from a media

business perspective rather than necessarily a sporting one. “We do have some issues,” he says of the industry as a whole. “The 21st century is different from the 20th century – the way people consume media and everything else. But attendances are holding up and people are working very hard. The BBC will be doing the Grand National in HD this year, which I’m chuffed about, and we’re putting a programme in place at the moment to have all our racing covered in HD by 2011. It is a big initiative and it is a significant investment by racecourses in racing.” While the BBC’s decision to drastically reduce its racing coverage might have been good news for Racing UK – which has become the only place for racing fans to watch many of the meetings they might previously have viewed for free on the BBC – it wasn’t for Racecourse Media Group as a whole, being, as it is, responsible for selling the courses’ rights to the terrestrial networks. FitzGerald and his team, however, were able to negotiate a new three-year deal in July last year that guaranteed around 200 jump races and 80 hours of coverage across both the BBC and Channel 4. With the gradual reduction in terrestrial hours, key figures within the sport have rallied to form a united body intent on modernising racing for the greater good of the industry. Racing For Change, as an organisation, incorporates representatives from every discrete part of racing life. Its mission, to bring the sport to a new audience, is something that FitzGerald absolutely supports. “I think the concern is that for someone coming into the sport, we have to make it understandable,” he says. “If I can take it back to football, which we try not to do too much, you’ve got the Premier League and then the Championship, then division one and division two. We need to help people understand a little bit more about the different levels of horse racing. I think there is a huge amount of knowledge in racing. If you’re an enthusiast, you really understand the way the races fit together, but for somebody you’re trying to bring in you need to get some clarity. It is difficult to understand how this race differs from that sometimes and some of the intricacies of these races. I think that’s the one area of racing that we’re all aware needs to be changed.” SportsPro Magazine | 29

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sportspro | THE BUSINESS OF HORSE SPORTS

JockeyIng for posItIons Dave Roberts is often described as the most powerful man in National Hunt racing. As agent to 34 professional jump racing jockeys, he is the man responsible for matching the sport’s top athletes with their equine equivalents. First published in July 2010

As the commercial juggernaut of global soccer gathers ever more pace, and ever more dollars, the role of the agent has become ever more lucrative, and ever more notorious. Seen by many as parasites creaming off a handsome living by doing little more than hawking their clients around to corporate sponsors and clubs, to many members of the general public ‘agent’ has become a dirty word. So-called super-agents, the likes of Pini Zahavi, have made personal fortunes on the back of their connections to players and clubs. In 50-year-old Dave Roberts the British horse racing industry has an altogether different sort of super-agent. Described by many as the most powerful man in racing, Roberts does not go in for slicked-back hair, ostentatious suits and self-promotion, nor does he have time to cater to the commercial interests of his clients or even to attend events in the sport he purportedly controls. In fact, as agent to 34 professional jockeys, Roberts spends up to 15 hours a day in his office just outside London, juggling four phones, the Racing Post and the one button he needs on his remote to switch between Racing UK and At The Races. It is Roberts’ job to secure the best rides he can for his jockeys. Though many of them are retained by owners to ride certain horses, as some of the hardest working athletes in professional sport, no jockey can ever ride enough winners. With as many as eight race meetings around Britain a day in the busy times, Roberts has no small task. “When it’s busy, from October until May, I start at about 5.30 in the morning and finish at 8.30 at night,” says Roberts. “The first hour and a half you spend studying the form, looking at all the entries and trying to work out where you want to send all the different jockeys. At seven o’clock

you start ringing round and you just get as many phone calls in as you can really. It’s just chasing all the rides – and the more meetings, the busier you are.” This year, Roberts expects his phone bill to touch UK£20,000. Roberts is the dominant force of the four agents currently working in National Hunt racing. Nevertheless, he says there’s a “terrific rivalry between the agents. Because you’re all sat by the phones. There’s a big meeting at Perth on Sunday, for example. At one o’clock this afternoon [the previous Monday] the entries hit the screen; as soon as they hit the screen you’re on the phone – two or three phones at the same time. It’s

“I judge my success by the number of winners they ride, not necessarily how many big winners.” pot luck who gets through first sometimes. It’s good fun but it’s hard. You have to look at the entries quickly and make quick decisions about who you want to put where. The trainers have their own preferences as well. I could ring up and say I’ve got one of the top three jockeys and they could say, ‘no we’ve gone with someone else.’” Roberts’ payment for all that toil is ten per cent of anything his clients earn from prize money and ride fees. Unlike in soccer, the agent’s take is the same for a champion jockey as it is for a fresh-faced novice. “Whether it’s Tony McCoy or a 7lb claiming jockey starting out, you get paid exactly the same,” explains Roberts. “It’s all done through Weatherbys bank so there’s no change of fee for Tony McCoy or anyone else. The secret is that if you get them on winners, you earn a percentage of the prize

money. The better horses you get them on, the better you perform really.” Roberts’ client list includes five of the current top ten National Hunt jockeys, the finest jump racers in the world: Robert ‘Choc’ Thornton, Paddy Brennan, Barry Geraghty, Richard Johnson and the indomitable AP McCoy. Many of his jockeys have been with him from the beginning of their careers. McCoy, who has been with Roberts since he came to Britain from Ireland in the 1980s, credits his friend and agent for much of his success. And that success is quite considerable. Indeed, McCoy followed his first Grand National victory – a win that had the normally serene Roberts “jumping up and down” at home – with his 15th consecutive champion jockey title at the end of the season in April. Roberts is not alone in his opinion that McCoy is the greatest jockey that ever lived. “AP’s had a little bit of a monopoly,” the typically understated Roberts says. “A few years jockeys have got close to him, but it gets harder and harder. There’s more jockeys coming through and he’s not getting any younger I suppose. He is determined to be champion jockey, but it’s not easy. The risks you take are… the next race could be a broken leg and you’re out for a few months and if someone rides a lot of winners and you’re going to be hard pressed to catch them up. So he’s been very lucky in the sense that though he’s had lots of bad injuries, he’s been lucky that they’ve either fallen at a time when he’s still been able to catch up or it’s not affected him being champion jockey. They’re never more than six weeks, four weeks, which is I suppose a credit to him if you think about the amount of horses he must have ridden over the last 15 years – to manage to stay injury free enough to be champion jockey is exceptional.”

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Dave Roberts often works for 15 hours a day, juggling four phones, the Racing Post and the television remote

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sportspro | THE BUSINESS OF HORSE SPORTS

AP McCoy finally won the Grand National in 2010. Roberts has represented him throughout his career

McCoy’s total prize money this year fell just short of UK£3 million. As the jockey, he will take around 10 per cent of that figure as well as a ride fee of just over UK£100 for every race he competed in, the rest going to the trainers and various stakeholders in the winning horses. An average jockey, someone of the calibre of, for example, Paul Maloney – the man who finished 12th in this year’s jockey table – will win about UK£600,000 in prize money per season. The jockeys also generally have to bear the considerable costs of travelling around the country every day, often to two meetings a day. Of course, Roberts, who has seen racing’s fortunes rise and fall since he started in the job almost 25 years ago, is of the firm belief that jockeys should earn more, but on the whole he is pleased with the progress he believes the industry is making. “I think racing’s in good health and I think it has been for a long time,” he says. “I think we’re on an upward curve. Racing for Change [the organisation set up last year to reform the industry in Britain] are definitely trying. I think they’re going to do what they can. I don’t think there’s any reason it should go

backwards as long as it’s managed properly. I think it’s good there’s more [betting] money in the sport but I think the betting side of things I’ve never really tried to get involved with. You’ve got to steer away from the path that would leave you open to skulduggery. I never bet. I did a long time ago, but not since I’ve been an agent. I don’t think it’s right because the relationship you build up with the trainer. Some of the things they say to you obviously they say to you in confidence. You’re in a privileged position and you should respect that.” The man who has come close to pipping McCoy more often than others is another of Roberts’ clients, Richard Johnson. In November last year, ex-jockey Richard Dunwoody, a three-time champion himself, caused a degree of controversy by declaring that Johnson needed to leave Roberts if he had serious ambitions to become champion. ‘You would struggle to find a greater supporter for the theory of jockeys using agents than me but the practice has evolved in a questionable way,’ Dunwoody wrote in his book, released that month. ‘Roberts works tremendously hard on behalf of all

his jockeys and is at pains to point out that he represents a ‘team’; it is the trainers who make the decisions on which particular jockey to book and apparently he simply tells them who of the team is available to ride and never pushes one jockey over another. In theory that sounds very equitable, but does anyone really believe in practice that the entire team get a fair look-in?’ “He’s entitled to his opinion,” is Roberts’ measured response to Dunwoody’s criticism, “but I work just as hard for Richard Johnson or a 7lb claimer as I do for Tony McCoy.” Another stellar year for McCoy has been reflected in Roberts’ own performance this year. With 1,444 winners this year, Roberts has broken his record. “I judge my success by the number of winners they ride,” he says, “not necessarily how many big winners. I’m sure a jockey would say to you, ‘I’d rather win the Grand National and have 20 less winners.’ But the chances are the horse in the Grand National they win on is for their boss. So whether I was their agent or not, he’d have ridden the horse anywhere. Say someone has 60 winners and 20 are for his boss and 40 are for outside rides, as we call them, then to me I must have done a fairly good job to get 40 other winners. If he has 60 wins and 50 are for his boss and 10 are outside rides then what am I doing? I judge myself numerically. I’ve said to jockeys before I’d much rather get you to 100 winners than you ride the winner of the Cheltenham Gold Cup. I’m an agent, that’s how I see success.” While he calls many of his clients his friends, Roberts’ professional commitments to them prohibit him from spending much time in their company socially. Instead, he says he finds his outlook becoming more and more paternal. “It’s the fact that a jockey’s been with you since he started and he’s progressing the right way,” he explains. “You’re getting him on the horse and he’s doing the job on the course, so it’s a joint thing. I think with the younger ones you actually feel quite proud if they do a good job. I get a good buzz when the young jockeys do win on them. “Next season, all I want is to have 1,445 winners,” he continues. “I never set my standards too high. The main thing you want is to have all your jockeys end up in one piece and to have no serious injuries.”

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sPortsPro | THE BUSINESS OF HORSE SPORTS

Paddy Power’s Hollywood-style sign caused a stir at this year’s Cheltenham Festival, seen here in the background as Tom O’Brien rides Barizan in the JCB Triumph Hurdle

luck of the IrIsh Paddy Power and his eponymous bookmaking company are at the forefront of the betting industry that provides the lifeblood of the sport of racing. National Hunt racing in Britain and Ireland may be in rude health, but that hasn’t stopped Power from imprinting his unique character on the industry. First published in July 2010

In 1999, internet gambling as an industry was worth just over US$1 billion. By 2008, the industry was worth some US$22 billion globally. The consulting firm H2 Gambling Capital predicts that by 2012, online gaming revenues will have passed the US$33 billion mark. The growth of the industry has been explosive and, when it comes to sports, all-pervading. A rising tide floats all boats and, while the marketplace becomes ever more crowded as opportunists rush to catch the wave,

Irish bookmaker Paddy Power appears to have floated better than most. Eponymous owner Paddy Power, speaking from the dry land of his Dublin headquarters, admits he’s thrilled with the position in which he finds his company. “We’re in growth mode,” he says. “We’re very lucky that we can be. In the next five years we’re going to open a further 250 betting shops in the UK, employ an extra 2,000; we’re going to continue our growth internationally in Australia and in France and elsewhere around the world. We’re lucky that

we can. The company is in rude health; we’ve no debts; we’ve lots of cash. It’s good; we’re pretty bullish about our future.” Power’s confidence is as sure a sign as any that the industry is coming out of the recession following a year, 2009, that saw revenues down across the board. Indeed, with a refreshing light-heartedness that characterises much of what the company does, in a press release announcing their 2009 results, Paddy Power described 2009 as ‘a cracking year for punters’. Pre-tax profit for 2009 fell to SportsPro Magazine | 33

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sPortsPro | THE BUSINESS OF HORSE SPORTS

€67.2 million from €79 million in 2008, due to contraction in the UK and Irish economies and a punter-friendly run of sporting results. Turnover, meanwhile, rose 36 per cent to €2.75 billion, from €2.1 billion the previous year. Particularly costly last year was a run of nine Irish winners at Cheltenham – Paddy Power is the de facto bookmaker for Irish punters - plus August’s run of results in the English Premier League, with just four draws in the first 66 matches, compared to a five-season average of 25 per cent. ‘It appears draws are like [British glamour model] Jordan’s weddings - you wait ages for one and then several come along at once - with 18 draws over the subsequent 51 games,’ the company statement read. If financial results for the first four months of 2010 are anything to go by, however, then Power has every reason to be bullish. As at 30th April 2010, Paddy Power had net cash of €96 million, including customer balances of €37 million and net of €16 million of debt in its Australian subsidiaries, Sportsbet and IAS. In the bookie’s heartland, the UK and Ireland, sportsbook amounts staked grew by 19 per cent and bet volumes by 39 per cent. The 2010 National Hunt season, which incorporates jump racing across the UK and Ireland, delivered far more unpredictable results than the previous year, obviously to the advantage of the bookmakers. “I thought it was pretty good,” is Power’s typically laid-back assessment. “Results-wise it was mixed. We had plenty of well-backed, popular horses winning which was great; we had Tony McCoy winning in the Grand National; we had the big hype before the Gold Cup of Denman versus Kauto Star. Of course it didn’t quite work out that way [relative outsider Imperial Commander stole the show in one of the most prestigious races of the season in what was universally expected to be a two horse race]; but we did have the resurrection of Binocular [a much-fancied horse who won spectacularly at Cheltenham after almost one and a half years of failure]. If you look over the course of the season, there’s been loads of fairytale stories, which is good for the game. The beauty of National Hunt racing is that you can follow a horse from season to season, and a lot of those horses came back for more. Tony McCoy finally won the Grand National and Ruby Walsh was as dominant as he ever is. I

think at the end of the season at the National, pretty much every National Hunt punter in the country backed the winner [Tony McCoy on Don’t Push it], so everybody’s been left with a pretty nice taste in their mouth.” Importantly for Paddy Power, this year’s Cheltenham Festival, the premier National Hunt event in the world and one that generates around UK£150 million in betting revenue over its four days, wasn’t nearly as punterfriendly as previous editions. While that might have been good for the bookmaker’s coffers, it didn’t sit well with Power’s business philosophy. “Cheltenham was relatively bookie friendly,” Power says, “which was a little bit disappointing overall. The way we play it is we kick off the festival with a massive offer. That’s a real blockbuster. We get people in and then it’s up to ourselves to try and keep them for the week. We do tailor our offers to suit the results. So if all the favourites get beaten the first

“the Paddy Power way is that ideally you want the fella to walk in with 100 quid in his pocket and walk out with 90. If he walks out with nothing, he might not bother coming back.” day, the next day we’ll be extra generous with pricings; we’ll be much more competitive and aggressive with our pricing and try and offer a little bit more value. It doesn’t change the ethos, but it does move the goalposts a little. If we’re winning plenty during the week, we’ll try and give most of it back at the weekend. The Paddy Power way is that ideally you want the fella to walk in with 100 quid in his pocket and walk out with 90. If he walks out with nothing, he might not bother coming back, but if he walks out with 90, he’s had a good time; we’ve got a tenner out of him; and he’ll come back next week for more.” Although most bookmakers will offer deals on certain races, usually willing to make a loss simply in order to drive customers to their sites, Paddy Power has become renowned for its innovative and sometimes downright

foolhardy offers. Indeed, acutely aware that any publicity is good publicity, Power is happy with his company’s increasing propensity to pay out early on myriad different bets and is happy to take the hit that sometimes accompanies that. Recent early payouts have included calling the English Premier League title Chelsea’s way almost a month before the end of the season (although that’s nothing compared to the 2005/06 season which saw Paddy Power pay out on a Chelsea title as early as September after the London club raced into an unassailable lead), as well as paying out on David Cameron becoming British prime minister days before a vote had been cast. At this year’s Cheltenham Festival, senior figures within the Paddy Power organisation, particularly within the risk management department, had grave doubts about the sanity of their opening ‘blockbuster’ offer – money back on all bets if Dunguib, an unbeaten Irish banker, won. “He didn’t win, thankfully,” chuckles a relieved Power, “because that would have cost us about four and half million quid. Those kind of blockbuster offers are what we’re doing to try to cut through and offer punters something different because what we’ve found in the tough times is that punters will appreciate the special offers more than they did three or four years ago. Now is the time when people will say, ‘Jesus, getting five places in the handicap is really good,’ or ‘getting money back on this is really good.’ It does help to cut through. From a financial perspective, from a Paddy Power point of view, we’re very happy with how the year went in terms of growing market share, and we made a few quid as well. Thankfully, the punters got a blow in with the Grand National because, especially in these tough times, the bookies deserve to get a good pasting.” Talking of tough times, there is no doubt that the racing industry, across the board, felt the pinch of the global recession. “I think racing’s finding it tough like any other industry,” confirms Power. “It’s coming down from the boom times and things are obviously a bit tighter now. You can see that some of the Festivals are being affected with their crowds and they’re under pressure. At the same time it’s forcing racing, like other businesses, to be more creative and to provide better value to punters really, so it’s probably going to be good

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Both Paddy Power the man and Paddy Power the company have earned a reputation for innovation

in the long run. But I think overall National Hunt racing is in pretty rude health. We’ve got really great quality horses, great quality jockeys and trainers. The product is there, the ingredients are there and that’s the most important thing.” Recognising a need for reform, the various stakeholders involved in British racing got together towards the end of last year to form Racing For Change, a body intent on modernising racing and making it more accessible to a wider audience. Initiatives, such as free entry at certain courses and an attempt to simplify betting odds through decimalisation, have been drip-fed to ground level over the last few months and both the results and the reaction have been mixed. For his part, Power has welcomed the move. “I think it’s a great idea,” he says. “I found it relatively annoying that there was an awful lot of knockers out there before it even got off the ground. The free entry for the week seems to have got the crowds going racing, and that’s the key. I think they’ve made some errors: I think the decimalisation is a great idea but they made a complete hames of it by having it without your stake included. Anybody who’s used to decimalisation knows it already. There needs to be uniformity, I think, in terms of pricing. If you’re going to try decimalisation, you need uniformity. Also, I think it was a mistake not to have all the bookies do it. To have one or two do it is just pointless. I think a lot of the initiatives are good. There’s an awful

lot of cynics out there who knock everything. They’re happy to knock without making suggestions themselves. Racing in the future, even if it doesn’t need to change everything, it needs to be ready for change. I think it’s the right idea to embrace.” While the racing industry prepares itself for change, Paddy Power continues to expand. In 2009, Paddy Power, already the largest bookmaker in Ireland and the third largest in Britain, signalled its global ambitions by spending some €27.2 million to acquire major stakes in Australian bookmakers Sportsbet and IAS, and signing a landmark deal with Pari Mutuel Urbain (PMU), one half of the French gambling duopoly and the largest tote operator in Europe. The French deal, which will see Paddy Power provide PMU with fixed-odds risk management and pricing tools, is expected to add between €3m and €5m to Paddy Power’s revenues by 2012, as well as increasing the likelihood of similar ties between the Irish bookmaker’s new B2B arm and other European monopolies.

“racing in the future, even if it doesn’t need to change everything, it needs to be ready for change.” While in the Paddy Power betting shops across the world racing still accounts for between 80 and 85 per cent of turnover, the situation online is dramatically different. The rise of in-play betting and the explosion of television coverage for all manner of sports has reduced racing’s online market share to around 50 per cent. Yet, as Power is keen to point out, although racing’s market share is falling, in terms of betting revenue generation, it is still growing – just not as quickly as other sports. As an integral stakeholder in the sport of racing, and a crucial provider of revenue, the bookmaking industry has a responsibility to promote and protect the sport it still makes the majority of its money from. A man with racing very much in his blood, Paddy Power takes that responsibility seriously. Renowned for their innovative and, at times, risqué marketing campaigns, every time Paddy Power draws attention to itself with an outré piece

of publicity, it also draws attention to the racing industry. That being the case, Power is adamant that Paddy Power should remain first and foremost about entertainment. “Put it like this,” he says, “we consider ourselves not to be a bookmaker, but to be in the entertainment business. People can have a bet anywhere, but people can only be entertained while having a bet with us, we think. So that’s why there’s always a quirk to the things we do. We genuinely ask the question with everything we do, ‘is this fun?’ And if it’s not fun, there’s no point doing it. That take on things is a little bit off the wall. Our brand is very important to us and our brand is all about having fun.” He continues: “Realistically, for the sport, it’s most important that the festivals are hyped up and they’re made into massive events; they get huge crowds; they get big atmosphere on TV. It’s not just about the racing, it’s about all the other stuff that goes on in between, like all the various business, the celebrity and all that. It’s important to let racing compete with the big, glamorous events.” Never shy in playing his part in the hype he deems necessary for racing to compete with other sports, Power is very proud of a promotional campaign he carried out at this year’s Cheltenham: a huge Paddy Power sign positioned on the hill behind the course, Hollywood-style. As is often the way with Paddy Power campaigns, the sign garnered both positive and negative reaction. “Put it like this,” he says, “you look at that [sign] and you say ‘that was great; it was good fun; we enjoyed it; it got a lot of people talking.’ Anyone can have good ideas but to actually put them in to practice, that’s the real talent. We’ve been very lucky that we’ve been able to pull off a few kind of coups like that. Yeah, it was eye-catching; it was breathtaking; it was fecking massive, and it did get chins wagging. That sort of thing is very important to us because you do kind of raise the bar for yourself; you set the standard for yourself all the time which means you have to do something bigger and better the next time you do something. You try lots of things. There’s no fear of failure. You try lots of things that don’t work, and you get one or two things that really do work. If you don’t try, you don’t succeed.” A motto for his own company, but also, perhaps, for the racing industry itself. SportsPro Magazine | 35

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SPoRTSPRo | THE BUSINESS OF HORSE SPORTS

Racing foR RefoRm Greg Avioli has reinvigorated the Breeders’ Cup since his appointment as chief executive in 2006, doubling revenues and attracting the best horses from across the world. Shunning complacency, he now intends to cement the event’s status as a truly global proposition. First published in November 2010

It is a common belief in the racing world that the sport is simply too insular, too stuck in its ways, too bound to a romantic notion of ‘tradition’ to drag itself into the fast-moving and lucrative world of the modern sports industry. The senior figures within the sport, many protest, are simply too inward-looking. If that is an accusation that can be pinned on many leading racing bodies around the world, it is surely not one that can be levelled at the Breeders’ Cup and its reforming chief executive Greg Avioli. When 45-year-old Avioli was installed as the head of the self-styled season-ending world championships of thoroughbred horse racing it was with a very clear mandate: to grow the Breeders’ Cup into a truly global proposition. “Up to about 2005, the Breeders’ Cup mirrored the broader horse racing industry in its connection with the status quo and resistance to change. The Breeders’ Cup was largely unchanged from the time it was founded in the mid-1980s – same basic format of races; same domestic focus; and, to a large extent, remarkably, the same staff,” explains Avioli. “And so when I came onboard at the beginning of 2006, we took a long look at the property and said, ‘Why is it that the Breeders’ Cup has done a good job at connecting with the core, particularly US horse racing fan, but was largely unknown to the broader sports public?’ And in response to that question, what we decided was we simply had become too insular. So everything we’ve done in the last four years has really been to put the ‘world’ back in the world championships.” When the Breeders’ Cup board of directors brought Avioli onboard, they did it on a ticket of reform and they knew only too well they were going against the establishment. Although technically an appointment from within the racing world – Avioli worked

in a variety of senior roles at the National Thoroughbred Racing Association (NTRA), the US organisation tasked with improving the popularity and commercial interests of racing in the country, in the eight years prior to his appointment – Avioli is by no means a horseman through and through. A trained lawyer, he joined the law firm Long, Aldridge and Norman after graduating in 1989. In 1994, he moved to the sports marketing firm International Sports and Entertainment Strategies, where he worked on a number of different sports entities, notably the Olympics and in golf with the PGA. “I’m unusual within

“as far as we understand it’s the largest purse money in the world for two days in any sport.” the US racing industry in that I did not grow up in the sport,” he says. “My background, first as an attorney and then in professional golf, tennis and the Olympics, gave me, I think, a unique perspective as to what was feasible with the Breeders’ Cup. I was lucky enough in the 1990s to see what worked in the Olympics and in golf. The PGA Tour, in particular, went from being a US-focused property to a global property. I was able to bring a perspective on what racing could be, beyond what it just was today. If you could be bold and you could reach out to the rest of the world then there was a lot more out there.” “The old Chinese saying,” Avioli adds, “is that he that is good with a hammer thinks everything is a nail.” If that maxim applies to the previous regime, then in the course of Avioli’s five-year tenure so far, he has used a panoply of different business tools to

bludgeon the Breeders’ Cup into shape. Avioli’s first year in the job heralded a raft of changes and, crucially, immediate success. In his first few months he set about a substantial restructuring and cost-cutting exercise, both at management and competition format levels. One of the biggest changes was borne from Avioli’s feeling that the Breeders’ Cup, aside from branding itself as a season-ending championship, actually had little discernable connection with the regular racing season. “Racing is not one of the better structured sports in the world,” he explains. “So particularly in the US you had your Triple Crown races – the Kentucky Derby, the Preakness and the Belmont – and then there was this gap and the Breeders’ Cup sort of popped up in the first week of November. So we created something called the Breeders’ Cup Challenge, which is an automatic qualifying play-off series if you will, under which horses who win particular races – some of the best races from around the world from primarily June to October - get an automatic qualifying spot in the Breeders’ Cup.” The Breeders’ Cup Challenge began in 2006 with a series of 24 ‘qualifying’ races, all of them in the US and all of them broadcast on either ABC or ESPN. Such is the success of the concept, and the lure of the Breeders’ Cup itself, that this year the Challenge will incorporate 65 races in seven countries across the world. “It allows us to connect our brand with some of the best quality racing and the best venues in the world, such as Ascot, such as the Hong Kong Jockey Club,” says Avioli. “We try to link with the best races in the world to provide a stepping stone from those races on to the season-ending world championship.” Another major change Avioli put in place, and one that riled the traditionalists most, was to expand the Breeders’ Cup meeting itself

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Street Sense, ridden by jockey Calvin Borel, crosses the line to win the Juvenile race during the Breeders’ Cup at Churchill Downs in Louisville, Kentucky, on 4th November 2006

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SPoRTSPRo | THE BUSINESS OF HORSE SPORTS

The Breeders’ Cup: the world championship of racing Founded in 1982 by leading US thoroughbred owner and breeder John R. Gaines, the Breeders’ Cup quickly established itself as the season-ending championship for thoroughbred racing in the US after its inaugural running in 1984. From that first meeting, where US$10 million was pledged for the championship prize purse, the event organisers have looked to attract the best horses from around the world by keeping the prize fund as high as possible. Before the Breeders’ Cup expanded to two days in 2008, it was generally considered the single richest day in sport anywhere on the planet (an accolade now held by Dubai World Cup Night, which offers a prize fund of US$21 million). Last year’s US$25.5 million in total purses earned the two-day Breeders’ Cup from one day to two, running a total of 14 races instead of eight. “There was huge opposition to the three-point shot, instant replay and the introduction of the wild-card teams in baseball and football, and all have been successful. In the case of Breeders’ Cup, our recent expansion to a two-day event with an all filly and mare championship on Friday has again stirred up the protectors of the past,” explained the innovator Avioli in a 2008 interview. Reflecting on that expansion two years on, Avioli still believes it was an obvious decision to take. “None of this was rocket science,” he says. “We were trying things that had worked and succeeded in other sports. We expanded under the general feeling that bigger is better. And some of the benefits of that were that it immediately gives 50 per cent more of the world’s best horses, owners, trainers, jockeys the opportunity to participate. So where we used to average around 90 horses a year in the Breeders’ Cup until 2005, we now average over 150. Where we used to get ten to 15 horses a year internationally, last year we had 35. We used to have, depending on the venue, 40,000 to 50,000 people, maybe sometimes 60,000; last year we had 97,000 people at the event. So it’s a bigger stage; more opportunities for more of the competitors and more opportunities for the fans.” Of course, in order not to dilute the event,

meeting the title of richest prize money event in the world. The meeting had been rotated between different tracks every year until 2008, when Santa Anita Park in Los Angeles signed a two-year deal with the organisers. “I think the Breeders’ Cup is one of the world’s true global championships,” says Breeders’ Cup chief executive Greg Avioli. “We bring together the best horses in the world, last year from eight different countries. We telecast the event to 200 million people in 130 countries and with the largest prize money of any event in the world we’re able to attract the best of the best. And I think that the combination of the quality of our competitors and the global nature of the property are really the defining characteristics of the event.” with that expansion came a hike in the overall prize fund. “As far as we understand it’s the largest purse money in the world for two days in any sport,” says Avioli. “We award US$26 million of purses over two days. That does a lot of things, but particularly that’s an incentive for the best in the world to come to the Breeders’ Cup.” As a result, the Breeders’ Cup’s world championships tagline is increasingly more than just that. “To be a true global championship,” Avioli says, “you have to have the best product in the world.” And according to one metric provided by the International Federation of Horseracing Authorities (IFHA), it is between the Breeders’ Cup and the Prix de l’Arc de Triomphe in France for the title of most important race meeting in the world. Indeed, the IFHA publishes an annual ranking system of the world’s best races. “For the last five or six years,” Avioli beams, “the number one rated race in the world has either been the Breeders’ Cup Classic or the Arc de Triomphe. That’s rarefied air. We’re happy to be there and we need to be there.” Avioli makes no bones about the fact that competitors are drawn to the Breeders’ Cup, just as they are to the Dubai World Cup in March, by the bulging purses on offer. To remain at the pinnacle of racing, the prize money must stay sky high and, accordingly, so

must the revenues. As a not-for-profit entity, the Breeders’ Cup channels the majority of its revenues, after modest operating costs are taken into account, straight back into its purses. Over the course of Avioli’s tenure, Breeders’ Cup revenues, from all sources, have grown from an average of less than US$15 million prior to 2006, to anywhere between US$25 million and US$30 million a year – a surge of almost 100 per cent. Those revenues, Avioli explains, are drawn from four distinct areas: ticket sales, concessions and on-course merchandising (although these are drawn from the revenue-sharing agreements the Breeders’ Cup has with its host tracks), sponsorship and, significantly, wagering. Indeed, while there is a feeling amongst senior figures within the European racing world that too much emphasis is placed on gambling in US racing, to the detriment of the way the sport is portrayed, the figures all but justify that emphasis. “Off the wagering side of the business,” Avioli explains, “we generally make, with the current numbers, around US$10 million to US$12 million a year. We continue, along with the Kentucky Derby, to be the two largest betting days in the United States for horse racing. We would like to get to the point where we get over US$200 million bet on the Breeders’ Cup, but I think if that doesn’t happen this year it will happen in the near future. At the same time, when you look at the total amount that’s wagered, you look at where it’s wagered from: we are probably the most successful racing event in the world when it comes to attracting wagering from around the world, not just in our host country. Last year, over the US$178 million that was bet, a little over US$26 million of that was bet outside the US, from 25 different countries. We now have betting on the Breeders’ Cup coming in from Hong Kong and from Turkey, as well as traditional spots like the UK and France.” In terms of entrance fees, Avioli reveals that the Breeders’ Cup is on target to sell US$11 million in tickets for this year’s event at Churchill Downs in Kentucky. With regards net revenue, ticketing normally accounts for between US$5 million and US$6 million annually, roughly the same amount that is garnered from sponsorship. In fact, while racing in general is finding it tough to attract blue chip sponsors, or indeed

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Greg Avioli’s tenure has seen Breeders’ Cup revenues rise from US$15 million to as much as US$25 million

any sponsorship beyond the increasingly cash-rich bookmaking industry, the Breeders’ Cup stands as an example to the industry worldwide. The event has long-term relationships with international brands such as Emirates Airline, Grey Goose vodka, Sentient Jet and Mont Blanc and, judging by Avioli’s ability to extend deals, all of them are delighted with what the Breeders’ Cup gives them. “Our core sponsors have bought into the vision of what the Breeders’ Cup can be in the future,” Avioli says. “We believe we are a good brand fit for global luxury brands. We think the type of consumer that is most attracted to the Breeders’ Cup is the type of consumer you would liken with Emirates Airlines or Grey Goose or Mont Blanc they’re going to want to market to them as well. Both Emirates and Grey Goose are in their sixth year with us, which is a long time in today’s market price. Grey Goose just extended that for an additional three years last month. “We don’t have 28 sponsors like the X-Games, for example,” he continues. “We have a limited number of exclusive sponsors and that’s intentional. We want to be associated with a targeted number of high-end luxury brands that have the same brand values as the Breeders’ Cup does.” A strong contributing factor to the Breeders’ Cup’s strength as a sponsorship proposition lies in the autonomy it retains with its broadcast deal. An eight-year deal signed with ESPN in 2005 – at the time, the

longest single rights contract ESPN had with any property – allows the Breeders’ Cup to sell all the commercial advertising around the programming to its own partners, in lieu of a rights fee. Looking to the future, the accepted wisdom is that while smaller, weekday race meetings are under threat economically, larger, festival-style meetings are growing more popular across the world. Nevertheless, Avioli is not under the misapprehension that the Breeders’ Cup will continue to thrive and grow if a process of continual evolution is not maintained. To that extent, he is currently dedicating much of his time to feasibility studies on the issue of finding the Breeders’ Cup a permanent home. The Breeders’ Cup having rotated venues for 25 years up to 2008, it is an issue that has caused some controversy. “We have studied this issue very closely for the last two years,” says Avioli, “and it really comes under the heading of constantly re-evaluating yourself and your business to see areas where you can improve. We did a two-year experiment, if you will, in California in 2008 and 2009 where we held the Breeders’ Cup in the same venue [at Santa Anita]. There were some tremendous benefits that we realised from that, so much so that we’re going to continue that experiment with two consecutive years at Churchill Downs, which we’re going to run in 2010 and 2011. When you’re an event of our size and magnitude, when you switch to a new venue every year, especially when you have four or

five venues in your midst, you’re constantly reinventing yourself. Every year you have to go back and spend thousands of dollars with new staff, with new management, just getting the basics down of how you’re going to operate the event. When you do not have that burden, when you have a system that allows you to run the event with the same people and the same protocols in place from one year to the next, that gives you a tremendous amount of extra time to do other things to improve your event. At the same time, we feel we could do more for the property itself, particularly in terms of growing its global fanbase, if it had a permanent location people could associate the Breeders’ Cup with one site – the way, for example, they associate the Masters with Augusta or the US Open tennis tournament with Flushing Meadows. Having said that, the reality is that in order for the Breeders’ Cup to locate to a permanent venue you’re going to have to find the right venue, and you’re going to have to find the right operator of that venue – whether it’s a private company or a public company – and you’re going to have to find a state government or a local government that’s willing to work with you for the types of incentives that you would need. We have explored a number of alternatives and we continue to do that to this day and I can tell you that we have yet to find the perfect fit. But we remain open to it and have made no commitments beyond 2011 at Churchill Downs and I think there’s definitely the possibility that coming out of this two-year commitment to Churchill Downs the board may determine to choose a permanent home.” Avioli knows that the traditionalists will say that the Breeders’ Cup has a duty to rotate across different areas of the country for the greater benefit of the sport in the US. “There’s no question,” he says, “that if we choose a permanent venue there would be, for a short time at least, some resentment.” He fundamentally believes, however, that a stronger Breeders’ Cup, a Breeders’ Cup that stands indisputably at the pinnacle of horse racing across the world, will not only attract more fans, more owners, and more investors to the Breeders’ Cup itself, but to the sport as a whole. And that, no matter what the traditionalists think, can only be a good thing. SportsPro Magazine | 38 39

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SPORtSPRO | THE BUSINESS OF HORSE SPORTS

Coe clears the fence, leading the field in the 139th year of the National Hunt Chase Challenge Cup at last year’s Cheltenham Festival

AheAd by A length The Cheltenham Festival is possibly the most prestigious horse racing meeting in the world. With gate receipts at the four-day event totalling more than UK£7 million and betting revenues of more than UK£150 million generated, it is also one of the world’s most valuable. Cheltenham Racecourse’s managing director, Edward Gillespie, and his sponsorship director, Peter McNeile, have been central to the Festival’s success in recent years. First published in April 2010

The Cheltenham Festival is quite simply the biggest event in jump racing. Held annually over four days in March, the Festival sees almost a quarter of a million people travel to the small English West Country town of Cheltenham for what is seen as the culmination of the British jump racing season. The Cheltenham Gold Cup, held on the last day of the Festival, is one of the most famous horse races in the world. Ticket sales

for the four days of the Festival alone garner around UK£7 million, and sponsorship take is rising rapidly. Though the Festival dates back to 1902 and is the most prestigious meeting on the British racing calendar, its commercial explosion has been fairly recent. The Cheltenham Festival, as a brand, is now almost certainly the most potent in its sport. Integral to the growth of that brand has been the continued involvement of two of the

most respected and experienced figures in the industry, Edward Gillespie, managing director of Cheltenham Racecourse, and his director of sponsorship, Peter McNeile. “We are the largest race track for the sport,” says McNeile. “I don’t think it’s immodest to say that the others are probably fighting to be number two, not number one. The next most valuable calendar would be Ascot, and Ascot, by tacit reflection, are vying to retain their

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position at number two, not trying to knock us off our perch.” This year’s Gold Cup, on Friday 19th March, is perhaps the most eagerly awaited race in a generation. It will feature the third showdown between Kauto Star and Denman, two of the finest race horses of all time and both of them previous Gold Cup winners. “I think we’ve been incredibly lucky to get Denman and Kauto Star within the same decade as we had Best Mate [one of Britain’s best-loved horses and a Gold Cup winner in 2002, 2003 and 2004],” says Gillespie, a man as steeped in racing history as the course he oversees, “because that is not how racing traditionally has happened. Horses of this quality only come about every 15 to 20 years. It’s been most unusual in one decade to have three outstanding horses.” Gillespie and McNeile are forecasting an overall attendance of around 200,000; by no means breaking any records, but still evidence that the Festival continues to stay on the right

side of the recession. “Since we started this season back in October,” explains Gillespie, “almost exactly a year after the credit crunch occurred, we’ve had a really good, solid trading period. Spend on betting is marginally down; spend on food and beverages is marginally up – on the same attendances. Crowds have been very much the same year on year. And actually in certain areas a little better. You’ve heard about the flight to quality, well perhaps that’s what’s happened.” In fact, the way that money is spent in horse racing – heavy investment going into the breeding business – dictates that the full effects of the recession will not be felt for a number of years. “Its effect on people’s capacity for buying horses has been dramatic,” explains Gillespie, who, having been involved at Cheltenham for some three decades, has weathered recessions before. “The market is down by 30 per cent. The top has held up, but the middle has gone. It costs as much to train a bad or moderate horse as it does to train a good horse. We’ve already seen entries of our races down for the Festival year on year. That may be because people used to have multiple entries, but they’re watching the pennies now because entering a horse in a race could ultimately cost them UK£5,000 or more.” Of course, flat racing, where the stakes are higher and the horses generally race younger, will be affected sooner. Gillespie is pleased with how his variation of the sport is faring in comparison. “We’re the poor cousin of flat racing,” he says, “but we’re a much more entertaining cousin. We’re the much more amusing bloke to sit next to at dinner, in my opinion. Because there is nothing behind the curtain in jump racing, whereas what you see in flat racing is just the tip of the iceberg. The bulk of the iceberg is the asset management of the breeding business, and the empires around that.” Having worked for a spell in the mid-nineties as the managing director of United Racecourses, the group that owned several high profile racecourses including Epsom, host of the Derby, one of the biggest events in flat racing, Gillespie is ideally placed to draw comparisons between the two forms of racing and the true connotations of the bloodstock business; a prestigious winner in flat racing is worth far more in stud fees than it ever would be in prize money. “It’s great

that in jump racing you just have the sheer passion of the moment, and that’s all there is,” he says. “The winner of the Gold Cup will be less valuable ten minutes after the race than ten minutes before, because his history will change and he’s very unlikely to win it again – and that’s all the value is. Whereas the winner of the Derby is worth, amazingly, exactly what it cost to insure the horse, would you believe? Isn’t that extraordinary?” Cheltenham Racecourse has long been established as the home of jump racing, officially termed National Hunt racing, in the same way that Lord’s is for cricket, Wembley is for soccer or Twickenham is for rugby. It hosts four major race meetings throughout the year, the largest of which by far is the Festival. The venue also incorporates the 2,200 capacity Centaur, one of the largest auditoria in the wider region. “We hold several hundred events a year,” explains McNeile. “They’re a very diverse group of events. Today [in mid February] we’re hosting a B2B event. Later on this week, we’ll host a dinner for 1,200 people – a charity ball. There are some public events as well, because Cheltenham is a town of festivals. The lead festival is the racing festival, but actually on the back of that, Cheltenham borough council has successfully promoted itself as a town where you can come for a couple of nights. The literature festival with The Times is quite successful. There’s a jazz festival coming up, there’s a folk festival, there’s a science festival, and so on and so forth. And actually a lot of those public events can be sited in our buildings.” McNeile asserts that, in total, the racecourse generates between UK£3 million to UK£4 million in revenue from extraneous conferences and events. As a percentage of the overall business, “it’s still quite modest,” says McNeile, “but they all help to use the buildings constructively and reduce our overheads.” From both a spectator’s and a sponsor’s perspective, one of the Festival’s unique draws is the fact that it is very popular with Irish nationals. “We sell about 7,500 to 8,000 tickets to Ireland,” says McNeile. “We sell probably about the same again to Irish expats. About 20 per cent of the audience is made up of Irish men, but a lot of them are domiciled in the UK. There’s an Irish banker in the opening SportsPro Magazine | 41

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SPORtSPRO | THE BUSINESS OF HORSE SPORTS

Peter McNeile, director of sponsorship at Cheltenham Racecourse, with the famous rolling hills in the background

race this year, the Spinal Research Novice’s Hurdle, which is Dunguib, which is as yet unbeaten. That’s the sort of Irish superhorse that gets the Irish afloat. There’s no shortage of Irish business involved in the Festival. It has always been a pretty good selling point for us.” When it comes to Cheltenham’s sponsorship strategy, the more the merrier is very much McNeile’s corporate philosophy. The spectrum ranges from overarching, fully integrated annual partnerships worth something in the region of UK£300,000, to smaller, single race sponsorships worth as little as UK£5,000 for an event covered only by satellite television. Although, individually, those figures pale in comparison to big sponsorship deals in other sports, they do add up across the year. “The commercial parts of the business,” explains McNeile, “excluding hospitality – so we’re talking about sponsorship, advertising propositions, perimeter signage, all that sort of paraphernalia – probably amounts to just over half the amount of gate revenue for the Festival. So UK£3.5 million to UK£4 million.” In terms of sheer quantity of sponsorships – every one of the 27 races across the Festival has a title sponsor and the logos of myriad other advertisers appear on perimeter boards around the track – Cheltenham is perhaps the most cluttered of any racing event. “The sponsorship market is actually quite buoyant,” maintains McNeile, so why not take advantage of it? McNeile and Gillespie, however, have never been tempted to sell the title rights to the Festival itself. By keeping the name intact, the

brand itself has been built. “Our model here is that we retain the title to our events ourselves, but we provide the opportunity for sponsors to brand the events within those events. We have the Cheltenham Festival; it will never be the Kleenex Cheltenham Festival. Because actually we find that we do a better job and we get more buy-in by selling it in a more fragmented format. That’s in marked contrast

“We’re the much more amusing bloke to sit next to at dinner, in my opinion. because there is nothing behind the curtain in jump racing, whereas what you see in flat racing is just the tip of the iceberg.” to Aintree, for example, where it’s the John Smith’s Grand National meeting. They have some other partners but they’re very much secondary partners and it’s quite a difficult pitch going to someone and saying, ‘would you like to be a secondary partner?’” Taking up the theme, Gillespie asserts that, as promoters of the Festival, essentially the prime objective of his team is to sell tickets and hospitality to all four days of the Festival. “The danger from our point of view,” he says, “is that everybody wants to look at one

race – the Gold Cup – and not the races on the previous days.” By having a fragmented sponsorship portfolio, the sponsors will take care of most of the event marketing, pushing their specific events with a vigour that one or two ‘global partners’ in exclusive categories would not be able to do. “You get the buy-in and the enthusiasm of 25 people who are all waving the flag for the event, as opposed to just one,” says McNeile. “And that makes a huge difference. The success of this business is built on a whole group of ambassadors; informal ambassadors – we haven’t directly asked them to be ambassadors – but they’re helping to sell our business; whether that’s Keith Prowse Hospitality or Events International, they’re all busy selling our business for us. And, to an extent, that manages our risk.” Festival sponsors range from the obvious – bookmakers and equestrian-specific companies – to the not quite so obvious – JCB, for example. “They [the sponsors] are all a very diverse bunch of people,” explains McNeile. “I don’t think I could take a line through any of them. They’re a range of B2B business, so Smurfit Kappa [a corrugated packaging company owned, in part, by CVC Capital Partners, the investment group that owns Formula One] would be a good example: yes, they entertain lots of clients, but you could do that without sponsoring anything. But this is essentially about providing a UK-centric focus for customers in the UK and Ireland. It’s something they love doing and will wow them a bit. Byrne Group [a UK-based construction contractor], which is our most recent sponsorship announcement, uses a hospitality facility, entertains several hundred people over the four days of the Festival and is profiling itself through a race. Well, nobody’s going to buy a concrete sub-structure from them amongst the general public. But that low-level awareness I think counts over the fullness of time and opens doors for them. On the other hand Ryanair, as a consumer-led business, actually brings over a huge number of people to the Festival, and to other race meetings across the industry throughout the year. The association with horse racing and making sure that people know that Ryanair is backing their sport is part of the ethos of the sponsorship.” An eminently articulate man, McNeile

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

Denman beats Kauto Star to the 2008 Gold Cup

Peter McNeile and Edward Gillespie, the course’s managing director, photographed on 10th February, 2010

radiates the sort of common-sense thinking sometimes lacking in the commercial echelons of the sports industry. He makes no bones about what the principal motivator is for his sponsors. “Certainly all of those have one thing in common, which is that someone in the organisation absolutely adores the sport,” he says. “Yes, there are good solid commercial reasons for doing so, but also someone who has made a personal connection. I think return on investment is important, and I think we deliver that in lots of different ways, but I don’t blind my sponsors with media returns, which are rather spurious comparisons afterwards.” As far as outsourced promotion is concerned, the gambling industry is the racecourse’s first port of call. Each of the four days of the Festival is allocated to one of Cheltenham’s four major bookmaking partners, sponsoring one major race per day. “But it’s no coincidence,” adds McNeile, “that if you walk down the back straight, you’ll get a perimeter board for every Tom, Dick and Harry bookmaker you could imagine We have bookmakers involved with almost every single event here. It’s an open market. What benefits us is getting people who want to drive events. This is a certain number of days when you can cram a load of people in here who want to spend money, and you take a little bit of that money and you end up with something in your pocket. And the more people that you get here, the more they spend, and the more you take. So, QED, if you’ve got different partners for different events, they will probably take pride in that particular event and drive it harder that

one person who says, ‘ok, I’m not sure about this one; that day isn’t particularly great, we won’t push that too hard, we’ll focus on this one.’ It’s horses for courses, if you’ll forgive the pun, but actually it works.” In fact, gambling, as it is across the entire horse racing industry, is the lifeblood of the Festival. “The people who come to the Cheltenham Festival and the people who watch the Cheltenham Festival have a predisposition to gamble,” explains McNeile. “The estimates that we have of people betting onsite – on the site alone, never mind elsewhere – are about UK£1 million a race. That’s a lot of cash. We estimate that the total turnover on races during Festival week is about UK£500 million. If you talk to any bookmaker, I think you’d find that the normal turnover for a week would be between say UK£320 million and UK£350 million, or something of that order. There’s a big, big spike there.” Proof, perhaps, that McNeile is doing an excellent job lies in the longevity of many of the racecourse’s partnerships. “Christie’s are now in their 32nd year of sponsorship of the Festival,” McNeile elucidates. “It’s Royal SunAlliance’s 40th year this year, which is amazing. They must be getting something back.” The single most pressing overhead for any racecourse promoter is the sum set aside as a prize fund for each race. In the case of this year’s Gold Cup, one of the richest races in Britain and this year sponsored by Totesport, that prize fund stands at UK£475,000. McNeile explains that that is

not simply determined by the amount of money put up by the race sponsor. “I’m not prescriptive about how much a sponsor needs to put up for an event,” he says. “I think you start off by finding out what the sponsor wants to achieve and you build a programme that makes sense for both of you and is sustainable. Some of our sponsors put up ten per cent of the prize fund, and some of them put up 110 per cent of the prize fund. The size of the prize fund is a subject for us to consider as to what we need to do to get the right horses into the right place at the right time. It’s also led by market conditions, which have something to do with competitor analysis. Have we put up enough money to prevent them from going to Ascot, for example, or to Punchestown? A lot of it is about service provision, because in the very top flight you’re dealing with people who have so much money the prize money is largely irrelevant.” A key driver of Cheltenham’s success in recent years has been the wide scope that McNeile and Gillespie have been allowed to operate on. “A lot of businesses in the racing industry are quite conservative and staid. The audiences don’t change. But this is a business where, if you have an idea, you can turn that idea into something really exciting. It’s great to have been involved in a continuing success story. I started doing what I do now about ten years ago, but the job isn’t the same as it was ten years ago otherwise I would have left long ago. It’s grown and grown and it’s become more exciting as a result of it.”

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

The billion-dollar Meydan grandstand, topped by what Henry Birtles calls “majestic falcon’s wings,” is the new home of the world’s richest horce race

SHEIKH MOHAMMED’S EQUINE DREAM The Dubai World Cup turned the racing world on its head when it was introduced to the calendar in 1996. 14 years on and the richest race meeting in the world is now housed in the world’s richest racing venue. First published in August 2010

“If you build it, they will come,” a ghostly voice whispered in Kevin Costner’s ear in the 1989 film Field of Dreams. Costner’s character duly built a baseball pitch in his cornfield and, true to the voices in his head, he was soon watching as great players from a bygone era emerged from the corn to play on his pitch. The feel-good film was a runaway success, taking a massive US$84.4 million at the box office.

That figure, though, would only have paid for a fraction of the sporting facility in Dubai that, before its completion this year, only seemed possible in the wildest of dreams. Indeed, Sheikh Mohammed bin Rashid al Maktoum, the emirate’s ruler, watched this year as his own sporting vision became reality. Rising from the dust of the Middle Eastern desert, the biggest and most expensive course in the history of horse racing was opened at

the end of January. Meydan has already won widespread acclaim. Fears that the glittering edifice will wow for a year or so before its status fades to that of yet another piece of larger-than-life ‘Dubaiana’ are unfounded. Meydan will be Sheikh Mohammed’s lasting legacy to the sport, not least because the venue’s construction has meant the world’s richest race meet is now housed in the world’s richest racing venue.

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Meydan is the jewel in the crown of the vision that Sheikh Mohammed has been building since the inaugural Dubai World Cup. The meeting turned the racing world on its head when it was introduced to the global calendar in 1996. “From the beginning of the Dubai World Cup,” explains Frank Gabiel Jr, the experienced American who has been chief executive of Dubai Racing Club (DRC) since September 2005, “thoroughbred racing in Dubai has always been at the forefront of the industry. Now, in the Dubai World Cup and Meydan Racecourse, we have two worldclass entities that meet on the same night to offer the vision of His Highness Sheikh Mohammed and the board.” When Gabriel came to DRC, having spent 15 years as executive vice president of racing and operations at the prestigious Arlington Park racecourse in Chicago, USA, and with a total of over 30 years experience in the racing industry, he undertook a full-scale review

of Dubai racing’s commercial performance and its future plans. Within two months, masterplanner TAK had developed a plan for a new horse racing venue within a 76 million square foot racing-themed city. “Within eight months we turned it round to a fully fledged project,” says Gabriel, who is also on the Meydan Management Board and the Dubai World Cup Committee. When the rest of the development is completed, it will feature an 18-hole championship golf course, a residential complex, Meydan City - complete with a canal system linking it to Meydan Racecourse – as well a Meydan Business Park. Gabriel oversees a racing body that has over 1,000 employees, with its standout event, the Dubai World Cup, now worth a staggering US$10 million. In fact, the eight-race meeting as a whole, which takes place each year towards the end of March, is worth US$26.25 million. It is the showpiece competition that takes place just after the two-month long Dubai International Racing Carnival. That level of investment, fronted largely by Sheikh Mohammed himself – though Gabriel insists that, as a business, Dubai Racing Club has reached a stage where most of its revenues are generated through ticket sales, sponsorship income and television rights – has done much to reverse a trend that many saw as the scourge of thoroughbred flat racing as a sporting entity. Henry Birtles, who has handled the Dubai World Cup television rights for Sunset + Vine since 2000 and understands the international impact of the meeting as well as anyone, explains: “Prize money is an issue the world over in racing. It isn’t in Dubai. There’s so much emphasis on retiring horses for stud and the value of stallions that actually what happened in the eighties was all these top horses were being retired immediately; as soon as they won a significant race they were being wrapped up in cotton wool to preserve their stud value. So they were almost racing to breed. But now, this kind of event has encouraged people to keep their top horses in training beyond the age of three. They’re not afraid to lose as they used to be because these race horses are now being bred for what they’re meant to be bred for – to race, not to breed. I think that’s an important part of what Sheikh Mohammed has done – he’s encouraged people to keep their horses in

training. For the flats, because they often weren’t seen after the age of three, it meant that the sporting public, the unconverted as well as the racing public, could never latch onto a flat race horse, because they were gone as soon as they’d appeared. Now they aren’t.” In fact, the Dubai World Cup meeting currently has the top three richest races in the world: the title race, at US$10 million; the Dubai Duty Free, at US$5 million; and the Sheema Classic at US$5 million. Birtles contests that, from a television sales perspective, the meeting has two very enticing unique selling points. “Yes, it’s young,” he says, “but it’s the world’s richest race. It’s also, as I’ve always described it, the richest guaranteed two minutes in sport. OK, you can have a Mike Tyson fight from years ago where invariably the bout was over within 50 seconds, but that wasn’t guaranteed. This is the guaranteed richest two minutes in sport. Secondly, the fact that racing has, in a way, come home to Dubai resonates very strongly. Horse racing as a sport is derived from three stallions: the Godolphin Arabian, which is why [Sheikh Mohammed’s stable] Godolphin is called Godolphin; the Darley Arabian; and the Byerley Turk. Every single race horse on the planet can trace its heritage back to one of those three. They came out of the region close to Dubai, and Sheikh Mohammed, when he gave his speech the night before the Dubai World Cup this year, was very, very big on that fact. The race horse has now gone full circle; they went out from the desert, and now, once a year, the sons and daughters of the founding fathers of the sport come back to do battle in the desert at a venue, Meydan, which is now one of the most significant sports venues in the world.” Thanks largely to the money on offer, the Dubai World Cup has long been the only genuine world championship race on the global racing calendar, although, remarkably, it does not market itself as such. Birtles believes it has been Dubai’s ability to get the Americans interested that has set it apart from other big races across the world. “We all know about the statistic of Americans and passports,” he says, “well that’s very similar to their horses; Americans very rarely travel their horses. But, because of the power of money, they came to Dubai in 1996 and SportsPro Magazine | 47

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SPORTSPRO | THE BUSINESS OF HORSE SPORTS

they’ve been coming to Dubai ever since. They don’t just come from France or Ireland, which perhaps they do for British races, and the Prix de L’Arc de Triomphe occasionally gets the top Japanese horse there, but in Dubai they come from all corners of the planet. And they come because the prize money is irresistible and the competition is great. So you really do have the feeling that, although it doesn’t sell itself off as a world championship like the Breeders’ Cup, but you really do have the feeling of, ‘Hold on a minute, they’ve come from Australia, they’ve come from Hong Kong, they’ve come from Japan, they’ve come from Ireland, England and the US – that’s the major one’.” In fact, though the race has been dominated by American and Middle Eastern-owned horses, every attempt has been made to ensure that top horses from across the world compete. From the outset, Dubai Racing Club has been generous with trainers, jockeys and owners, in many cases flying them over to Dubai for the race. As far as Sheikh Mohammad is concerned, Dubai’s ability to showcase itself as a racing hub is key to the growth of the country as an enduring economic power. “If you go back to the history of racing in Dubai and the beginning of the World Cup,” says Gabriel, “the exposure that the Dubai World Cup got gave everyone a focus on where Dubai was and what it was all about. And that’s what His Highness Sheikh Mohammed and the board felt that racing did. They used the tool of sports, the tool of thoroughbred racing, to give a sightline to the UAE and Dubai.” Even before the meeting was moved to Meydan, whose grandstand alone has a capacity of 60,000, the Dubai World Cup regularly drew crowds of over 50,000. Crucially, a significant proportion of those crowds were drawn from outside Dubai. “I think as far as racing in Dubai and Meydan is concerned, we’re definitely looking at the complete world in terms of exposure and participation,” says Gabriel. “We had previously been concentrating more on the European and North American markets for the last World Cups and several of the carnivals, but I think in the last three years we’ve really expanded into Japan, Australia; South Africa of course has been a big part of

Sheikh Mohammed prepares to present the Dubai World Cup

Frank Gabriel Jr has overseen Meydan’s development

A deluxe swimming pool sits atop the Meydan grandstand, which also boasts its own marina

our carnival. So probably if you look from the carnival on, we started to really expand outside of that core of North America and Europe and to getting into Asia and South Africa and Japan where we’re getting participation from

“It’s also, as I’ve always described it, the richest guaranteed two minutes in sport.” those countries not just on World Cup night but actually throughout the carnival. If you look at six to eight horses coming from Japan, you could very well be looking at 600 to 2,000 people coming over from Japan with them.” The construction of the US$2 billion-plus Meydan – or ‘meeting place’ – racecourse is only likely to increase that crucial foreign participation further. A genuine behemoth of

a building, the grandstand is the longest in the world and boasts a five-star hotel, six haute cuisine restaurants, an IMAX theatre, a racing museum, a 10,000 capacity covered car park as well as state of the art breeding and training facilities, not to mention a marina. Its distinctive wing-shaped design means that, lit up at night, it is visually stunning. “It’s the most extraordinary grandstand,” says Birtles. “It’s absolutely fantastic. The facilities for TV and TV production are incredible. From a spectacular point of view, and from a TV perspective, where you’ve got your heli-cams and it’s floodlit and you look down on the stands, you’ve got these great falcon’s wings. It’s visually incredible, so that definitely adds to the kudos of what it’s all about. Sheikh Mohammed decided to call it Meydan because it’s a meeting place and a meeting place to appreciate, I suppose, one of Sheikh Mohammed’s proudest exports: the racehorse.”

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spoRTspRo | THE BUSINESS OF HORSE SPORTS

Surrounded by skyscrapers and looped by Hong Kong’s famous tramline, the Happy Valley racecourse is famous for its night meets and its spectacular skyscape

The magnanimous monopoly The Hong Kong Jockey Club is one of the most prestigious racing organisations in the world. Since assuming the role in 2007, dynamic chief executive Winfried Engelbrecht-Bresges has steered the not-for-profit club through the ravages of recession and now presides over one of the fastest growing entities in the industry. First published in July 2010 50 | SportsProMedia.com

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One year on from its 125th anniversary, the Hong Kong Jockey Club (HKJC), one of the oldest institutions in Hong Kong and one of the most prestigious racing organisations worldwide, can look back with pride at its illustrious history. As a not-for-profit organisation, the HKJC has what it calls a ‘simultaneous dual mission’: to provide world class racing entertainment to the Hong Kong community, while at the same time making financial contributions to that community

in the form of duties, taxes and charitable donations. According to the HKJC’s latest financial report, the club remains Hong Kong’s single largest taxpayer and ranks as one of the world’s top charity benefactors. Last year, total contributions from the HKJC and the HKJC Charities Trust to the Hong Kong community reached the US$2.7 billion mark. As well as owning and operating Hong Kong’s two racecourses, the spectacular innercity Happy Valley course and the expansive out-of-town course in Sha Tin in the New

Territories, the HKJC also holds the sole licences for the operation and management of Hong Kong’s horse race betting, soccer betting, and the national lottery, the Mark Six lottery. According to the HKJC’s captivating chief executive, Winfried Engelbrecht-Bresges, the fully integrated nature of his organisation allows it to excel. “One of the things that differentiates us as an organisation from others is that if you look at Australia for example, it’s a completely fragmented industry. There you have different race courses; you have the regulatory function institutions like Racing Victoria or Racing New South Wales; then you have the betting rights with Tote organisations; you then have further complications in that the media rights are from the racecourses contracted out to betting companies or to Tote companies; then you have a couple of bookmakers which now represent the issue of betting exchanges. So the difference between us and them is that fortunately we have a completely vertical, integrated industry. On the production, the racing side, to the ownership side, to the betting side, to the IP rights when it comes to TV – everything we have integrated pretty vertically.” That vertical integration has allowed Engelbrecht-Bresges and his organisation to tackle both the increased competition that racing faces, as well as the global recession, with a swiftness that would be beyond almost any other racing authority worldwide. The one major challenge that racing faces across the world, Engelbrecht-Bresges believes, is the increased choice that regular or would-be racing punters have in terms of leisure and entertainment as well as within the gaming industry itself. Fortunately for EngelbrechtBresges, the HKJC’s monopoly allows it not only to cater for the changing needs of its customers, but to chart trends and spending patterns more effectively than its international counterparts. “We offer practically a complete service of the leisure entertainment side of the racing itself,” says Engelbrecht-Bresges, “in that we have customer experience; you come to the racecourse and we can do customer segmentation; in that we can look at the customer holistically as a customer value – how much the person bet, how much he spends on food and beverage, how much he contributes to the industry, and then SportsPro Magazine | 51

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spoRTspRo | THE BUSINESS OF HORSE SPORTS

Winfried Engelbrecht-Bresges As chief executive of the Hong Kong Jockey Club and vice chairman of the International Federation of Horseracing Authorities (IFHA), the world’s highest racing authority, Winfried EngelbrechtBresges is one of the most powerful people in the horse racing industry. A graduate of the University of Cologne in economics, finance, statistics, insurance and business administration, EB, as he is better known, combined his study with playing professional soccer for Borussia Mönchengladbach in his native Germany. He soon found himself in a career in business until his passion for horse racing and thoroughbred breeding led

him to the role of chief executive of the governing body of German racing and breeding. In 1998, Engelbrecht-Bresges joined the Hong Kong Jockey Club as director of racing, before being appointed executive director, racing in 2000, at which time his mandate was expanded to include responsibility for the club’s property department. He was appointed chief executive in February 2007 to widespread approval. Former champion trainer Ivan Allen said at the time: “Winfried Engelbrecht-Bresges was not merely the best choice - he is by far the best in the world in his field and he was the only choice.” He served on the board of the equestrian events of the 2008 Beijing Olympics.” He was appointed as a member of the board of directors of the Community Chest of Hong Kong in June 2007 and as a Justice of the Peace (JP) in July 2009.

additionally how much he can contribute in relation to sports betting. We can offer one customer service, integrated with all the elements, which practically no other service provider can.” The HKJC’s considerable and ongoing analysis reveals that, across its two race tracks, 110 off-track betting centres, internet, interactive and telephone services, the club has some 1.3 million customers. Of that 1.3 million, 900,000 have active and regularlyused racing betting accounts. With the season running from the first Sunday of September to the second Sunday of July, this year Hong Kong will host 83 race meetings, 35 of them at Happy Valley and 48 at Sha Tin. “On an average race meeting,” Engelbrecht-Bresges expains, “we have around 700,000 of our customers who are active. At Happy Valley we have an average of around 15,000 people on the racetrack, and we have around 5,000 who watch that Happy Valley meeting on our other racetrack at Sha Tin. Then we have around 100,000 to 150,000 people in our off-track betting. And the others switching on the TV and using that or using the internet to be

active in the race meeting. So we have two TV channels, one is a free-to-air TV channel with your normal TV package, and the other one is a cable service which is a little bit more for the hardcore gaming customer. If you look at the other race course in Sha Tin, on an average race meeting we have around 20,000 who come to the races there and we have another 5,000 in Happy Valley.” Certain race meetings are now embedded in the cultural fabric of Hong Kong society. One such is the Chinese New Year meeting. “That is the biggest race meeting,” confirms Engelbrecht-Bresges. “The big meetings really are extremely popular from a race course perspective and on Chinese New Year we really have to manage the crowd extremely carefully. That meeting is a must in tradition and it’s a family event. The third day of Chinese New Year you have to go to the races.” The HKJC’s participation figures would be impressive in any part of the racing world, let alone in a country with a population of just seven million. Even more impressive is that the green shoots of recovery following the recession now seem to be blossoming.

“I think we have probably turned around from a declining situation which we had with significant investment in facilities, services and marketing and upgrading the quality. I think we have turned the corner in getting back our customer base, which was essential.” Part of the reason for that turnaround has been the club’s ability to position its Happy Valley meetings as not just horse races, but essential networking events for the notoriously hard-working Hong Kong business community. “At Happy Valley, we created something that didn’t cost a lot of money,” says Engelbrecht-Bresges with pride. “Wednesday night at Happy Valley is a must-meeting place for young executives from professional backgrounds – be it lawyers, bankers, whatever. The meeting point is the beer garden. At the 1,650 metres mark, we have 3,000 or 4,000 young executives there who meet their friends. They have to go there.” At the club’s other track at Sha Tin, another marquee attraction pulls in the punters week-in, week-out. There, an all-new 15,000 capacity stand surrounds the parade ring, amphitheatre-style, an attraction unique to horse racing in Japan and Hong Kong. “You have to create racing as an experience,” says Engelbrecht-Bresges, “not only as a facility or an event of world class racing.” Having attractive facilities and a marketing strategy is one thing, providing world-class racing in a country whose landscape prevents thoroughbred breeding is quite another. The fact that, in recent years, the best sprinter in the world has been based in Hong Kong is remarkable testament to a long term strategy that is bearing considerable fruit. “If you look at the quality of racing we now have,” says Engelbrecht-Bresges, “it’s because we had a very clear strategy around ten years ago now where we wanted to have really world class racing. So we then increased the prize money significantly. If you look at our prize money, next year we will have around HK$740 million prize money for 730 races. So our average prize money per race is over HK$1 million. Translated to British pounds that’s around UK£80,000-£90,000. With this I think we have driven up the quality of Hong Kong racing significantly. If one looks at the world ratings, we have now around 20 horses in the world rankings. In the last ten years I think the best

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The 15,000-seat, amphitheatre-style parade ring is unique to Asian racing and a popular attraction

sprinter in the world was always a Hong Kong horse. We think we’ve got some of the best milers in the world and we have some of the top class middle distance runners as well. So our focus is really between 1,200 metres up to 2,000, so we are not aiming for the 2,400 metre races. We think that with a horse population of 1,300 horses you have to focus and our focus is on turf races, not all-weather races.” In terms of extra revenue generated as a result of hosting genuinely world class racing, the proof is very much in the pudding. While the recession put paid to the boom period that saw peak turnover of HK$90 billion (US$11.6 billion), Engelbrecht-Bresges’ projections are enviable. “In horse racing we expect a turnover this year of HK$74 billion (US$9.5 billion), which will be an increase of around 10 per cent on last year. In football [betting] we expect a turnover of around HK$37 billion to HK$38 billion (about US$4.8 billion). That will be again a 10 per cent increase in relation to last year. Then we offer additionally the lottery which is around HK$6 billion (US$770 million), which is pretty flat because we have not been given the permission to introduce new games. So we expect a record turnover over all three businesses. Of course, you can increase your turnover but if you do it only via pricing and your margin goes down, I think this is not sustainable for long because in the end you have to create value for the customer and for the company itself. So in relation to gross margin, we have now practically re-reached the level of 2004-2005, which is a really significant turnaround.” One considerably lucrative attraction of

Hong Kong’s brand of racing is in the depth of its betting pools. In fact, EngelbrechtBresges hopes to enhance that attraction by developing a co-mingling concept – allowing international gamblers to bet in the HKJC’s already swelling pool. “Our pool size is definitely one of the major competitive advantages we have in relation to any other racing jurisdiction besides Japan, which I think is even bigger,” says Engelbrecht-Bresges. “But if you look at the individual pool per race, we are still the highest in the world. We

“meydan is only a venue which really comes to life with the Dubai World Cup. sha Tin and happy Valley are alive for 83 race meetings.” have an exotic betting programme in Hong Kong that offers bets that you cannot do in any other jurisdiction with this kind of impact regarding pay out. Our triple trio bets always have pools of, let me say, UK£600,000 or UK£700,000 and they easily go to UK£1 million or UK£2 million, and this is a very interesting exotic betting product. The triple trio is a trio bet over three races, where you have a very high payout. Normally, on average the payout is around HK$3-5 million, and then we have jackpots we generate regularly so the payout goes up to HK$8-11 million, which is one million sterling. These bets are extremely attractive. With a significant individual pool you can do these kind of

roll-up bets without getting hit so much regarding your payout because our pool size is not as vulnerable as other pools that have a significantly lower volume.” Having overseen a racing renaissance in Hong Kong of late, Engelbrecht-Bresges is determined that the HKJC does not rest on its laurels. A five-year master plan will see significant investment in strategic initiatives. Some HK$5 billion has been earmarked for facility upgrades over that period, and a further HK$300 million to HK$400 million will be spent on the club’s website, which Engelbrecth-Bresges believes has become “the fastest-growing, most important revenue channel” for the HKJC, attracting some 70,000 users a day and accounting for around 30 per cent of the club’s total transactions. The investment will also, of course, help the HKJC keep pace with the racing developments in Dubai, where a similar strategy of attracting world-class racing through significant prize money has been employed. The spectacular new Meydan racecourse, completed earlier this year at a reported cost of over US$2 billion, has set a new benchmark as a racing destination. While Engelbrecht-Bresges believes that major international racing authorities, including those of Hong Kong, Japan, Dubai and England, should align their calendars so that major meetings don’t clash with others, he is pleased with Dubai’s emergence as a major player in the industry. “I think in general that this healthy competition creates competitiveness and that drives you as an organisation to excel and, especially with the linking up of our international races with Meydan, we think it creates synergy too,” he says. “Because racing has to go onto a global stage. There will be major racing festivals around the world which are necessary to raise the awareness and the competitiveness of racing with other leisure and sports betting opportunities. “Meydan is a massive development which is magnificent,” Engelbrecht-Bresges adds. “But I personally think from the customer experience and the experience of racing on a day to day basis, Meydan is only a venue which really comes to life with the Dubai World Cup. Sha Tin and Happy Valley are alive for 83 race meetings. If you look at real sustainability, that is a must.” SportsPro Magazine | 53

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SPORTSPRO | GUEST COLUMN

Racing ahead, but falling behind by henry birtles Once upon a time, not so long ago, racing, a sport that never used to require the prefix ‘horse’ to define it, ruled the sporting roost in most of the world’s big league countries. Where is it now? Everyone knows that nothing spells a sport’s place out more clearly in the pantheon of international consciousness than television coverage. Whilst a showcase day impacts to a degree domestically and in many cases excels as a great experience for the racegoer, the sport at its core has lost its identity and therefore its appeal as a genuine commodity for television. Media audit figures point to racing being a sport in crisis. Perhaps it was by default, through our much closer bond to the horse itself as a partner in war, industry and everyday life, that racing was historically the natural choice of the early sports fan, sharing the highest of global profiles with only a handful of other sports. In the 1930s Pharlap, Man O’ War and Seabiscuit were household names known throughout the world. When technological progress extinguished our reliance upon the horse forever, the sport’s popularity still managed to endure regardless, bringing in the big crowds and annexing a dominant share of the time allocated to sport on television, even through to the 70s. By the 1980s, the competition had left racing behind and interest from fans and networks alike had waned; then time stood still and the sport now finds itself stuck in yesterday-land. Very simply ‘racing’ became ‘horse racing’ and no-one new was latching on; the networks had bigger games to play out. A major contributing factor came in the shape of governance that was at best ignorant on the concepts of marketing, professionalism, inclusion and progress; at worst indifferent to them. But there is light because there is substance. Horse racing is still the intoxicating sport it always was. With the traditional ingredients it has at its disposal to concoct great moments,

great memories, immense feats of raw power, heart rending stories and, with the right chefs in the kitchen, horse racing can reclaim some of that lost ground. How? Today its guardians are a more progressive, business-savvy bunch than their predecessors, so it isn’t those at the helm that need scrutiny, but there needs to be a movement of real solidarity from the industry to more aggressively promote the actual sport to a global audience. Although horse racing cannot boast an international governing body of Fifa dimensions, solidarity has to be established and the guardians of the package (industry and sport) could do worse than to recognise that where they have a responsibility to the industry and their own parochial territory concerns, they have a bigger responsibility to the sport itself. A distinction between the sport and the industry has to be made. International invitational race-days attracting high profile international horses well-known to the horse racing fanbase reflect the industry’s valiant attempt to globalise the sport, but only a very few of these days get genuine international network coverage of any substance and duration to register. There are plenty of racing-dedicated channels (many subscription) worldwide. These serve their purpose to the industry, domestic federation and horse racing fan alike, with necessity and distinction. But they preach to a small already converted constituency and where they do a great job for the industry, their coverage of international showpiece racing events should not be seen as even coming close to achieving the significant international reach that the sport so desperately needs for its profile. Horse racing needs big network exposure. If the sport gets this and horse racing’s magic is translated onto the screen, the industry too, with all its other multi-faceted revenue streams, will benefit in a more positive and satisfactory manner.

A strategic ‘all for one and one for all’ television offensive must be the aim to arrest the process of horse racing becoming a sideline curiosity and vehicle for making a bit of cash on a fun day out. One of Tony Blair’s early clarion calls having taken the reins of power in Britain was ‘Education, Education, Education’. There’s no easy fix, but the fix has to be simple. When considering a solution, simplicity is far too often written off as lazy idealism with complication far too often deployed in its stead, resulting in a solution still beyond reach. For horse racing the sport, the real simple problem and solution lies with ‘Television, Television, Television’. The value of non-betting broadcast rights for horse racing is insignificant enough for a small sacrifice to be made by individual federations/rights holders for the common good of the sport in their care. A simple answer might be the formation of an international committee comprising senior representatives of the sport’s individual powerbases operating under one umbrella with one specific goal – ‘Racing for Television’. A simple strategy might be the pooling of specifically allocated funds to achieve genuine and substantial coverage of up to 12 established flagship races from around the world on targeted networks to give the sport the real exposure it is lacking. A simple suggestion might also be for each race in this ‘12 Pack’ to have an equal budget to cover a standard production, a consistent presentation, a continuity of talent, with a consistent style, framework and narrative, airtime buy-in resources and a distribution outlet to ensure genuine global coverage of the very best of a slumbering giant: Horse racing, or, as it was once known, racing – pure and simple. Henry Birtles is the founder of HBA, a specialist sports media rights consultancy. This column was first published in October 2010

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08/02/2011 12:12:54


GORDIAN TROELLER BLOODSTOCK THE SOURCE OF A GOOD HORSE

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08/02/2011 09:54:56


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31/01/2011 17:57


Sports Pro - The Business of Horse Sports 2011