• Racing’s stakeholders endorse plan and budgets
• New approaches lead to reduction of £2m
• Racing calls on Government to stop loss of Levy through offshore operators
The British Horseracing Authority today confirms that its Board has approved, and its Shareholders have endorsed, plans for 2010 that include budget savings of £2 million, with further savings forecast for 2011 onwards. The savings will be generated through the renegotiation of key contracts and operational changes.
The Executive and Board of the Authority has been looking at the potential for savings since early this year, when it became apparent that the Levy return would be significantly less, after a rollover of the previous Scheme by the Levy Board. The final Levy yield for 2008/09, at £91.6m, was down over 20% on the previous year. The activities that the Authority carry out or oversee are funded by the sport, indirectly through a Levy distribution and directly through fees.
The Authority had run at the same cost for the previous two years, whilst taking on more roles, absorbing increased costs and an increased fixture list.
Nic Coward, Chief Executive of the Authority, said:
“The objective we have set ourselves since the Authority was created is to continue to provide the best possible service to the sport, in a way which all can see is value for money. Everyone involved in the budget planning process has been challenged to question why we do what we do, and the way we do it.
“In 2010, there will be further changes to the way we go about things across the organisation. We are working closely with our key contract partners, including Weatherbys and HFL Sports Science Ltd, to deliver the same high service but through doing things differently.
“Our London office move will mean a £1 million saving in our property costs over six years. Project spend will be significantly reduced. All of these contribute to what we do, and what we oversee on behalf of the sport costing £2 million less in 2010, with the full year effect of changes to contracts contributing to further reduced spend in 2011 and beyond. There will also be no general salary increases for 2010.”
Paul Roy, Chairman of the Authority, said:
“Racing is changing in many ways and the sport understands the challenges of the modern markets. Governments around the world recognise the need for a legal system that ensures a fair return to racing from betting and Britain is no different. The Government here recognises the unique relationship between racing and betting and the compelling importance of racing to the economy and culture.
“The simple fact is that the current return is unfair. Thousands of people – trainers, jockeys, stable and stud staff – are working huge hours for low pay. Owners who contribute £275 million net into the rural economy, vastly more than any other country, are weighing up the very poor returns which leave us languishing at the bottom of the international comparison table. British horseracing is the best in the world, and continues to offer great enjoyment to a great number of people, from racegoers, to owners, to punters. But when it comes to the returns to the people working in the sport, and making it happen, we are lagging badly, and unless things change to recognise the realities of the world now, there are serious alarm bells.
“For our part, as the governing and regulatory body, we have looked and looked again at what we do and how much it costs to run the sport. Racecourses and others are looking at how the whole business of racing operates to see if things can be done more simply and efficiently. Our Board has agreed our plan, and our Shareholders have endorsed it, and we all understand the challenges. Further cuts could mean seriously damaging the standing of our sport, putting its integrity at risk.
“In France, 8% of betting turnover is returned to racing, which in 2008 equated to over €700 million returned back into the sport from their PMU. In Britain, the model is very different, but from an estimated £12billion turnover the equivalent of just 1% was returned through the Levy, with the other significant contributor to Racing that Government set up – the Tote – delivering roughly £20 million back.
“What we are looking for is Government action to address what is right and fair, so that the sport can continue to attract people into it, and make the massive contribution it has done for a great many years.
“In particular, urgent action is essential to address the most recent blow to Racing’s finances, moves offshore of some of the major operators’ online businesses joining the large number who have already gone, and who pay no Levy into the sport as the law stands now. The threat of all remote businesses moving offshore is ever-present, taking more business out of the Levy net, with a catastrophic effect on the sport’s funding. We also need to see that no one can be in business acting as a bookmaker on betting exchanges without paying full levy.”
10 November 2009
Notes for Editors:
About the British Horseracing Authority
It is the British Horseracing Authority’s role to ensure the continued health and successful development of the sport. As both the Governing and Regulatory body it is the British Horseracing Authority’s responsibility to:
• provide the most compelling and attractive racing in the world;
• be seen as the world leader in raceday regulation;
• ensure the highest standards for the sport and participants, on and away from the racecourse;
• promote the best for the racehorse; and
• represent and promote the sport and the industry