- Levy Board agrees plan to borrow £21.5m to best support British racing in its recovery from the pandemic and provide immediate confidence to the sport’s investors
- Over £400m has been lost in racecourse revenues alone which has significantly reduced income to participants from prize-money
- Racing’s plan, agreed by the Levy Board, is for £15m to be allocated evenly between prize-money for participants and to racecourses across Britain over 12 months from July
- Remaining £6.5m retained by the Levy Board for now to provide further flexibility across 2021 and 2022
- The £7.5m in prize-money is being targeted to races most in need of support to remain competitive with other major racing nations
- Additional investment from Racecourse Executive Contributions in matched funding will take total prize-money boost to over £10m in next 12 months
- Further £7.5m deployed to support racecourses’ raceday integrity costs
- Monies to be repaid from future years’ Levy Board allocations to prize-money and raceday integrity costs
British racing’s leaders and the Horserace Betting Levy Board (HBLB) have today announced details of HBLB’s agreed deployment of £21.5 million of loan funding secured from the Government’s Sport Winter Survival Package (SWSP), with racecourses and participants set to benefit as the sport continues its recovery from the COVID-19 pandemic.
British racing has been impacted by well over £400m in lost racecourse revenues since the start of the pandemic and a reduction of over £65 million paid out as prize-money to participants in 2020 (41% reduction). The sport continues to be significantly affected by the limited number of spectators allowed.
The money is being lent by Government to the Horserace Betting Levy Board (HBLB) rather than to any constituent body of Racing as a consequence of the sport’s particular governance structure and the HBLB’s role in providing central funding to the costs of race-day regulation, equine welfare and industry training. The loan will need to be repaid from future Levy returns.
The SWSP was launched by the UK Government in late 2020 with the stated aim of supporting “the immediate future of major spectator sports” that have suffered revenue losses as a result of the absence of spectators. British racing developed its expenditure proposal to the HBLB with the Government’s overarching objective in mind.
£7.5m support to aid British racing’s international competitiveness
£7.5m will be utilised to enhance prize-money for the 12 months from July 2021, in such a way as to support engagement levels and maximise the retention of horse numbers in 2021 and beyond.
The allocations will be split approximately 60% to Flat racing and 40% to Jumps, in line with the composition of the fixture list and the HBLB’s historic funding split, and will be targeted to support the upper tiers of racing and developmental races.
These are the races that have been identified as being most in need of support in order that they can remain competitive in comparison to similar races in neighbouring jurisdictions and other major racing nations.
Support of Novice and Maiden races
The following Novice and Maiden races will receive additional support in the form of fixed grants to top-up prize-money, worth over £3.5 million:
- On the Flat, Classes 3, 4 and 5;
- Over Jumps, Classes 3 and 4
Support for such races is designed to ensure the benefit to participants is felt as widely as possible, with amounts for each determined by race type and class, with the payments added on top of the minimum value.
Support for Black Type races
Minimum values of Black Type races will not be changed but additional funding will be provided to races run above the minimum value, with every £1 of prize-money offered above that amount unlocking an additional £1 of matched funding, up to a maximum amount determined by race class. These races will be:
- On the Flat, Group 2, Group 3 and Listed Races;
- Over Jumps, Grade 1 and Grade 2 races, including for Novices
The additional funding from racecourses to unlock these matched amounts could deliver an extra £2.5m of prize-money on top of the £7.5m allocated, ensuring the
extra funds are used to deliver the largest possible increase in the prize-money values of Black Type races.
Support for racecourses
Racecourses have suffered financially not only as a result of the original lockdown but the subsequent absence of spectators and so, with a view to supporting their immediate future, the plans will see a further £7.5m deployed to support the raceday integrity costs incurred at those fixtures. This will be in addition to the existing support provided by the HBLB for the regulatory and integrity costs of fixtures.
The current raceday services grant from the HBLB to racecourses of £12,571 per fixture partly covers the BHA fixture fee of £15,341. In addition, racecourses incur other raceday integrity-related costs totalling approximately £10,000 per fixture at Flat meetings and £6,000 at Jumps meetings.
Under the plans for the SWSP loan, an additional payment of £5,000 will be added to the raceday services grant from 1 July 201 to 30 June 2022.
The Minister for Minister for Gambling and Lotteries the Rt Hon John Whittingdale MP said: “Horse racing is part of our national life. We have stepped in to provide £21.5 million as part of the Sports Survival Package, to help get the sport back on track, secure its future and retain its place on the world stage.”
Julie Harrington, Chief Executive of the BHA, said: “British racing is grateful for this vital support from the Sport Winter Survival Package. We much appreciate the assistance of the Levy Board in agreeing to take on the loan and work with racing to agree how the money is best used and distribute using existing funding processes.
“Plans for the deployment of these funds have been designed to target the areas where we have seen a decline in horses in training and provide confidence in the future to our investors.
“Britain is rightly proud of its unique and world-leading racing heritage. But it is clear that with competition around the globe increasing, this is not sufficient to attract the best in the world to be trained and raced here. Ensuring that prize-money is competitive helps ensure that Britain has the best horses, which benefits everybody who loves the sport.
“It is also important that we recognise the contribution and sacrifices made by trainers and jockeys, and the loyalty of their owners, that have combined to keep racing going during the pandemic.
“Vital to the overall success of British racing are our unique racecourses, whose staff have also worked so hard since racing resumed to ensure we remain compliant with Covid rules and guidelines. Supporting their financial recovery is an important part of this plan and will help to ensure our races retain their place as being at the forefront of the global racing scene.”
David Armstrong, Chief Executive of the Racecourse Association (RCA), said: “Racing and racecourses in particular are very grateful to Government for this vital funding boost for the sport in very difficult times. I would also like to thank Sport England for their tireless advice and support in helping us unlock this funding. We are especially grateful to the Levy Board for stepping in and helping us overcome some of the structural challenges we faced in accessing the SWSP – yet another example of their support during the pandemic.
“Racecourses continue to incur significant integrity costs in putting on Racing on a daily basis and this additional support will be very beneficial at such a sensitive time and during the recovery phase over the next 12 months.”
Charlie Liverton, Chief Executive of the Racehorse Owners Association (ROA), said: “The Sports Winter Package loan will provide a much-needed enhancement to prize-money levels as British Racing, along with other major sports, recovers from the impact of COVID-19. It is well noted that owners spend in excess of £30m a month on training fees to ensure that the race programme is fulfilled, along with jockeys riding fees of around £15m per year. We are grateful to have been able to resume behind closed doors for much of the pandemic, albeit for much-reduced prize-money levels, the impact of which has been felt by owners, trainers, jockeys, stable staff and breeders.
“The resilience of owners is such that overall, horses in training numbers are higher than they have been at any time over the past five years. However, it must be recognised that British Racing does have a problem with the number of two-year-olds entering training. It is a concern that the numbers are down on previous years with domestic and international owners choosing to have their horses trained in overseas jurisdictions because of the higher levels of prize-money on offer.
“Prize-money, and its equitable distribution across the participants, is critical to the retention and future growth of owners and the number of horses in training, which in turn will determine British Racing’s standing amongst overseas racing jurisdictions. We are therefore grateful to Government for providing British Racing with much needed and very welcome financial support.”
Paul Darling, Chairman of the HBLB, said: “HBLB is pleased to announce that it has accepted a ten-year loan of £21.5 million from the Government’s Sport Winter Survival Package. This is in keeping with our desire to provide over and above support to the sport in this exceptionally difficult time.
“HBLB’s involvement came about after Racing indicated that there were structural difficulties with Racing taking up the Government’s support and that it considered HBLB the most appropriate vehicle to do so, which would benefit the whole of the sport and that this secondary model was essential if the package was to help the wider industry.
“HBLB then invited Racing’s suggestions as to how the money should be spent in accordance with HBLB’s statutory duties. The Board considered the proposals and sought detailed reassurance from Racing that the money would be properly and appropriately distributed. The Board accepted Racing’s joint submission and assurances.
“The Board had very much in mind that this money is a loan from Government and not a grant. The discussions involved consideration and agreement of how the money being spent is to be repaid. It is critical that the wider sport fully understands that the effect of this arrangement is that the amount of Levy available to spend in future years will be reduced.
“Over the ten-year repayment period, with repayments required in years three to ten, the loan will carry an interest charge of £2.6m. The total repayments of around £24m will be made out of future Levy years’ receipts over that period through a top-slicing of the Board’s allocations to prize-money and raceday services as the first calls on grant expenditure.”
Evaluation of the loan’s impact
Racing’s leaders will closely monitor the effectiveness of the additional payments to ensure money is being deployed successfully, with regular reports to be provided to the HBLB.
The effectiveness of prize-money increases will be measured against the expected reduction in horses in training without intervention, as well as the performance of Britain’s major races internationally, the number of top-class performers remaining in Britain and the number of exports of higher quality horses from Britain during the year.
For racecourses, effectiveness will be measured by how quickly venues can recover from the effects of the pandemic, for example how quickly they can return to previous levels of executive contribution.