Wednesday 2nd July 2014
- Responsible response to Fixture List Consultation also seeks to protect prize money for Horsemen
- The Jockey Club proposes ‘Comprehensive Performance’ fixture allocation model to incentivise racecourses to invest in the whole race programme
- Tri-partite stakeholder structure needed to deliver industry-backed decisions on key policies
– The Jockey Club today outlined the headlines of its submission to the British Horseracing Authority’s (BHA) 2015 Fixture List Consultation, recognising the sport may not get a better opportunity to enhance its own long-term health. Its submission focuses on addressing field sizes through proposed measures that protect the sport’s dividend to Horsemen, a ‘Comprehensive Performance’ fixture allocation system that will incentivise racecourses to operate in the best interests of British racing across the whole race programme and the need for a stakeholder structure under which industry policy is agreed.
Simon Bazalgette, Group Chief Executive of The Jockey Club, said: “British racing may not get a better opportunity to improve its long-term health through self-help, not self-interest. Our submission to the BHA fixtures consultation proposes we take a responsible approach as a sport to addressing field sizes and promoting competitive racing. It would mean some changes and some financial pain in the short-term, but our proposals seek to protect the Horsemen’s prize money dividend and gross wins for the betting industry while growing the sport.”
Governed by Royal Charter to act solely for the long-term good of British racing, The Jockey Club recognises the need for a responsible approach towards the current horse population in the 2015 Fixture List process, sharing the BHA’s desire to provide competitive and attractive racing for its many customers. However, The Jockey Club considers that field size targets can be achieved without cutting 345 races, as mooted in the Consultation document, which would automatically remove an estimated £2.65 million of prize money from British racing and cost the betting industry significantly more in lost gross win, as well as reducing racecourses’ ability to invest – with no guarantee these sums will be recovered.
The Jockey Club’s modelling anticipates a more positive outlook on the projected horse population, with recovery aided by economic growth; a greater impact from the Additional Voluntary Contribution (AVC) fund; and race planning levers available to the sport today, including the ability to considerably reduce the number of small-field races by better delivering for the horse population through a marginal rebalancing of the race programme. This would be supported by a careful level of race reduction – circa 48 races – to achieve the field size objectives outlined in the Consultation.
In its response, The Jockey Club makes clear its view that fixture allocation has a large role to play in supporting the long-term wellbeing of British racing, including boosting field sizes. It recognises the major opportunity and
importance of building a clearer meritocratic system within the sport, incentivising racecourse behaviour across the whole fixture list to secure and grow prize money, drive field sizes, enhance betting turnover and attract people to come racing. To this end, The Jockey Club proposes a ‘Comprehensive Performance’ model for allocating available fixtures, which is an evolution of the balanced scorecard concept proposed in the Consultation.
This simple system would see racecourses compete with their overall performance across their whole fixture list against key performance measures for the health of the sport. The main difference from the balanced scorecard concept described is the criteria are used to define a share of the available fixtures that each racecourse or group can be allocated, rather than competition for each individual fixture. This is akin to the ‘proportional representation’ principles used in some voting systems. The Jockey Club proposes that prize money performance across all fixtures should be the main factor – driving investment across the whole race programme. Race performance (average field size and small-field percentages), betting performance and attendances should also be included to provide racecourses with the incentives to perform to all of the key industry barometers.
The total number of available leasehold fixtures can be split up to create fixture ‘pools’ against each of the performance criteria. Having used the Comprehensive Performance system to define the numerical allocation of fixtures between competing racecourses from each pool, a second stage in the process would involve specific allocation of each fixture, managed by the BHA, with geographical, code and race programme considerations to the fore. Independent racecourses would have first choice of slots for their leasehold fixtures as they have more limited flexibility than racecourse groups and the allocation system can easily accommodate new entrants.
By encouraging racecourses to invest in prize money across the whole race programme in return for the incentive of leasehold fixtures, Comprehensive Performance allocation builds on the newly introduced Prize Money Agreements and would see prize money totals increase. A straight bidding process for annually-allocated fixtures would not only fail to reward, but also disadvantage those already doing their utmost to invest their finite resources in the core race programme (currently 86 percent of the Fixture List). It would encourage racecourses to shift their investment from the core to secure the additional fixtures (14 percent) given the value of securing these, which would not be in the best interest of the sport.
In its current form, the ‘balanced scorecard’ option offers too few incentives to drive competitive tension and therefore positive behaviour among racecourses.
As proposed, it places insufficient weighting on investment in the core race programme and minimal differentiation between ‘Premier’ and ‘Standard’ Prize Money Agreements, despite the gulf in contribution this equates to. Also, such a system applied to individual fixture requests could result in the same racecourse or racecourse group securing a significant proportion – or all of – the available fixtures, without taking account of the significant cost to the rest of the sport.
To underpin the whole process, The Jockey Club reaffirmed the need for a formal tri-partite stakeholder structure to agree industry policy. This would result in greater input and responsibility for key decisions for those with a stake in British racing, reinforce the importance of a collaborative policy approach from stakeholders, and reduce the risk of vested interests overcoming efforts to support the long-term good of the sport and all parties within it.
“Now is the time to use all the levers at British racing’s disposal to achieve our aims. We must incentivise commercial operations to help to grow the sport, not just cut up its proceeds. Otherwise we simply rely on goodwill to act in racing’s best interests when currently little more is gained from doing so.
“The fixture allocation process plays a pivotal role in this. If you run a bidding process for leasehold fixtures then racecourses may shift monies away from the core race programme in order to secure them. But robbing Peter to pay Paul in this way is not even a zero-sum game. It’s actually a scenario where monies taken from the core will usually generate less of a return and could even see downgrading of the race programme where it’s coming from. Work that through and quickly you have a sport with less prize money, not more.
“Instead, we must incentivise racecourses to invest in 100 percent of the race programme, not just the 14 percent of annually-allocated fixtures, while also driving a focus on other key performance measures that help the sport, with the reward of leasehold fixtures for doing so. Those who do the least, get the least; those who do the most, get the most. That is merit. That is simple and fair competition without loopholes and unintended consequences. That is growing British racing.
“The Jockey Club, for example, has invested huge sums in building up our race programme, protecting and enhancing quality in the sport. Our racecourse group offers prize money per fixture that is on average 70 percent higher than the rest of the industry. The ability of those racecourses currently acting for the good of British racing to maintain this kind of contribution, let alone increase it, is at risk pending the ultimate outcome of this Consultation, because their ability to invest is based on what they can generate.”
The accompanying Executive Summary
summarises The Jockey Club’s 16,000+ word submission.
The Jockey Club previously commented on the key principles it would outline here
The BHA Consultation document can be found here.