10 Jun 1999 Pre-2014 Releases

Good morning, Ladies and Gentlemen, and a further warm welcome to the first BHB Annual General Meeting to be held in a public forum. Further evidence, if evidence were needed, of the Board’s continuing emphasis on accountability and its ongoing recognition of the importance of regular communication with those we are here to serve and who are, through the Jockey Club, the Racecourse Association, the Racehorse Owners Association and the brand-new Industry Committee (Horseracing) Limited, together with the Thoroughbred Breeders Association, effectively our shareholders.
When I last addressed you, in this very room, five months ago, the BHB Board had only weeks before unanimously backed a package of reforms drawn up by its representative Constitutional Review Group. Details can be found on page 9 of our Annual Report which is published today and which will be available to you later this morning. It necessarily took three and a half months to draw up the complex legal documentation, to secure the necessary formal approvals from the previous shareholders and to set up the freestanding Industry Committee (Horseracing) Limited, but on 10th May everything was finally in place and the new Board met for the first time. At its meeting two days ago, we welcomed Jim Furlong as the new ROA appointee, as well as John Sanderson, a founder Director of BHB, to whom we had actually said goodbye a month ago but who has nobly agreed to the RCA’s request to continue to serve until the autumn, when his successor, Norman Gundill, will join us.
In the meantime the Board is starting to review the applications from the 100 plus people who responded to the public advertisement for the new appointment of Independent Director. When the appointment is made by the Board by the autumn, it will be the first time in BHB’s history that the Board itself has had a say as to the individuals who sit on it.
These constitutional reforms, resulting as they do in a more democratic, representative and broadly based Board, are a helpful backcloth against which to continue to pursue the BHB’s two key strategic objectives: securing for Racing the significantly increased proportion of betting turnover identified in the Financial Plan, for essential investment in such key areas as Integrity, Marketing, Prize Money and Breeders’ Prizes, and securing the transfer of the Tote to BHB.
The pursuit of the first of those objectives will reach a climax in a little over four months’ time. The recent reconstitution of the Bookmakers’ Committee by the Home Secretary clears the way for the levy negotiations which must lead to an acceptable settlement by midnight on Sunday 31st October if a referral to the Home Secretary is to be avoided.
Peter Savill will be further addressing some of the key issues involved in this vital process for Racing a little later this morning.
As for the Tote, which was the subject of a major BHB policy announcement in this very room in January, the Board was extremely disappointed that the narrowly-based Tote Review Steering Group, surprisingly without any representation from BHB on behalf of Racing, did not recommend either that the Tote should be transferred to Racing or that there should be any specific safeguards to protect the Tote’s vital income streams to our industry. BHB’s policy remains clear and unequivocal: the long term interests of the Tote are best served by transferring it, lock stock and barrel, to Racing’s democratic, representative and accountable Governing Authority. Let there please be no more talk of Racing Trusts or similar, consisting of the same bodies who are already represented on BHB. What sense can there be in that? Have we not learnt the lessons of racing history – that real progress in this industry is constantly threatened by the presence of too many organisations, too much fragmentation and too many opportunities for internal conflict and for “”divide and rule””.
BHB will pursue its policy objective, which has widespread support within the industry, with determination and enthusiasm and we are grateful for the cross-party support which our endeavours have already attracted in Parliament. Notwithstanding that Government has never put a penny into the Tote, it argues that the fact that it has, through legislation, effectively created an exclusive licence for pool betting on horseracing, entitles it to insist that the taxpayer should derive some financial benefit from its sale. This is not an argument which Racing finds either compelling or attractive and it will take a lot of persuading that it should be acceded to with any degree of enthusiasm.
So what happens next? BHB will develop more detailed proposals for the transfer of the Tote to BHB. At the same time, I have accepted an invitation from the Home Office to join their Tote Liaison Group, to sit alongside the Levy Board, the Bookmakers’ Committee and the Tote itself to ensure that the Government is kept abreast of BHB’s intentions and that Racing is appraised of the views and intentions of other bodies. In 6-9 months’ time the position should be much clearer, with the way paved for the primary legislation which the Government say is needed, in the early years of the new Millennium.
In the last year of the present Millennium, not yet half-completed, we have already witnessed some spectacular racing. The Festivals have been particularly successful: the Cheltenham Festival, the Martell Grand National meeting, the Sagitta Guineas Festival and the Vodafone Derby meeting again attracted large crowds and produced as always some world-class racing. Festivals like these don’t just happen … they have to be worked at …. and I would like to take this opportunity to thank all Racing’s sponsors and to salute four of our most talented impressarios and congratulate them on the success they have again achieved this year … Edward Gillespie, Charles Barnett, Kim Deshayes and Sue Ellen. And I am quite confident that, by the end of next week, the name of Douglas Erskine-Crum will again be added to this roll of honour.
It is of course particularly encouraging that the success has not been confined to the major meetings. In the first four months of the year, racecourse attendances were up in total by 6.7% and on average by 3.7%, testimony to the success of the creative marketing which now comes naturally to many racecourse executives ….. with a little bit of help from their friends at BHB.
Marketing is of course very much centre stage in Racing at the moment, and will need to stay there if we are to compete in an increasingly tough leisure, sports and television market. Two recent marketing initiatives are worthy of mention in this context. The decision of the Levy Board in March to set up a small Marketing Group under the Chairmanship of Deputy Chairman John Robb, himself an experienced and committed marketeer, represented welcome, if somewhat overdue, recognition by Racing’s central funding body Copy2
” of the crucial importance of marketing and marketing investment, the need for which features prominently in BHB’s Financial Plan. In order to strengthen BHB’s contribution to this Working Group, the Board has appointed Michael Humphreys and Partners, experienced sports marketing consultants, to review BHB’s existing marketing plans, recommend a marketing strategy for Racing and advise on the structure and resourcing needed to implement the approved strategy.
If you thought that this was the only study which BHB was undertaking at the present time, you would, I’m afraid, be mistaken. We are not quite at the ‘if it moves, study it’ stage, but there are two other important BHB exercises on the go, which have been initiated at the request of, and in consultation with the Levy Board. First, there is the study into the problems of the thoroughbred breeding industry and how best to address them. A lot of work has been done in this area in recent months: the BHB Financial Plan identified a need for investment of £10m in an enhanced Breeders Prizes Scheme; the TBA commissioned a detailed report from NERA in support of an application for European Union funds; and the BHB and TBA have recently made joint representations to Government, about the damaging effects of differential tax treatment of stallion income as compared with our European competitors, which are currently the subject of discussion with Treasury and Inland Revenue officials. What is needed now is to pull all these separate works together into one coherent document for presentation to the Levy Board and Government in the autumn.
And it is perhaps appropriate here to mention the establishment in March of the British Horse Industry Confederation, which brings together the thoroughbred and non-thoroughbred horse world in a formal grouping for the first time. As the Confederation, whose Chairman, Michael Clayton, we welcome here today, becomes more firmly established, we hope it will encourage Government to view the horse for what it is ….. the centre of a very big and very valuable industry.
The second study, which is also due for presentation in the autumn, involves prize money, the Levy Board having asked BHB to examine the relative significance of prize money in the funding priorities of the Racing industry. We welcome this opportunity to reaffirm and elaborate on the key prize money messages, which form a central part of the BHB Financial Plan. The scope of the study will in fact be widened to embrace explicitly training costs and prize money, which the ROA were already planning to examine closely and which it seemed sensible to include under the same umbrella.
Both prize money and breeding issues were among the topics which featured in the comprehensive report of the BHB’s National Hunt and Fixtures Review Group published last month. The fundamental underlying message of this important report was this: National Hunt racing is a key part of our national racing industry, and National Hunt racing will remain a key part of our national racing industry. This report is now the subject of action by an implementation group chaired by BHB’s Racing Director, Paul Greeves, but the Board has already decided that it will allow no further fixture transfers from National Hunt racing to Flat racing, at least until the impact of implementation of the report’s many imaginative recommendations have been assessed in due course.
Now those of you who were listening carefully will have noticed that, hidden away in what I had to say about a very important report for the future of National Hunt racing, were two mentions of the word which has occupied the BHB Board and Executives to the exclusion of much else in recent weeks. I refer of course to what my executive colleagues came to refer to as the ‘F-word’ : yes, Fixtures.
At the risk of disappointing some of you – perhaps even all of you – I am not going to rake over the coals of the recent debate about this controversial topic. I am going to confine myself to expressing my delight, and that of all of us at Portman Square, that unanimous agreement was reached on 26th May – moments after the kick-off of that magic match in Barcelona – on a way forward, whose centrepiece of 14 consecutive racing Sundays will serve Racing well as it seeks, in the new Millennium, to attract a new generation of racegoers and punters, and to establish itself as the national summer sport. And after England’s recent dismal performance in the Cricket World Cup, now is perhaps the time to strike.
Racing fought long and hard for Sunday Racing but its development to date has been constrained by the terms of the Five Year deal. Now that we are free of its shackles, BHB, with full Levy Board support, is determined to ensure that the very real benefits which racing on the prime leisure day can bring, are fully realised.
With most, if not all significant and progressive change, there will inevitably be some individuals or individual organisations who at least perceive themselves as being disadvantaged for what they may, or may not, accept as the greater good. Suffice to repeat that the BHB Fixtures Allocation Group, with support from financial experts, will pull out all the stops to find satisfactory alternative slots for those racecourses who will not have Saturday evening fixtures next year.
The need to transfer a significant number of Saturday evening meetings to other slots is a direct consequence of the staffing difficulties in stables, which grow steadily more acute and which are themselves, in part at least, a by-product of the very underfunding which BHB will be addressing in the forthcoming levy negotiations. BHB will also be addressing the staffing issues head-on by commissioning a dedicated study into staff resources, working arrangements and practices, and terms and conditions of service. This of course includes pension provision, which has since been the focus of significant media attention. The study will be supervised by a Steering Group chaired by BHB Director Hilary Burnham, who will report later in the year. May I take this opportunity of thanking Peter Cundell, Grant Harris and the NTF, and Bill Adams and the SLA for their assistance, advice and cooperation in dealing with the complex fixture issues and in the setting up of the study.
More broadly, I make no apologies for repeating that the development of this industry will be severely hampered if we do not find a sustainable way of securing experienced, properly remunerated stable staff to undertake the vital job of caring for our racehorses. Racehorses, when they retire, deserve a good home. At the BHB Forum in January, I drew attention to BHB’s grant of £100,000 to the Emergency Relief for Thoroughbreds, the charity commendably established by the Racehorse Owners Association last year. A grant which incidentally was the primary reason for the Board’s lower surplus in 1998, to which you will find reference Copy3
” on pages 33 to 35 of the Annual Report.
Complementary to the work of the ERT are the discussions taking place under the chairmanship of Andrew Parker Bowles about the broader issue of rehabilitation, to which I also referred in January. Good progress is being made and discussions have already started about the establishment of an industry-financed fund to provide support for accredited establishments carrying out the much needed rehabilitation work. An excellent example of the industry looking after its own.
Another way of describing the industry looking after its own is ‘self-help’, which, as you are all well aware, is identified as an important source of the additional investment requirement for racing set out in BHB’s Financial Plan. Back in January I announced that over £10.5m had already been achieved towards the annual target of £25m. Tom Kelly immediately showed me the yellow card and, by the time we got into lunch, I could see that he was fingering a red card in his breast pocket, which he was clearly reluctant to show at least until he had briefed the Racing Post. Well Tom, on this occasion I’m going to pretend I’m suffering from a rare form of colour blindness which makes all your cards look green – so on I go …
I am delighted to report further progress on the self-help front, to complement the very welcome additional investment, under several expenditure heads, by the Levy Board, which has seen its prize money contribution rise by over £1.1m in the first five months of 1999, with a further boost due on 1st July. In summary:

* From 1st January 1999 up until last Saturday, Vodafone Derby Day, racecourses have further increased their prize money contributions by £290,000, or over 8%. These figures would have been even higher but for the abandonment of a few major meetings in the early part of the year.

* Sponsorship contributions in the same period have increased by £325,000, or nearly 6%.

* Owners’ contributions to prize money have risen in the same period by over £200,000.

* Back in January the estimated yield from the Levy Scheme for 1998/99 was £52.5m, £2.5m more than the original estimate. The most recent formal Levy Board forecast, still subject to confirmation, is £53.7m – a £1.2m increase on the previous estimate.

* The Tote’s contribution to Racing continues to increase, the precise extent being revealed at the Tote’s own AGM in a month’s time.

* BHB’s copyright income has increased by about a further £100,000.

A grand total of over £3m which, when added to the £10.57m reported in January, produces a figure of over £13.5m, over half way to our £25m.
Ladies and Gentlemen, that all adds up to quite a lot of activity since we last met in this room five months ago….. Activity which is part of our collective drive for greater prosperity; improved long-term funding; proper provision for our horses and our workforce, both existing and retired; a higher public profile for our sport; maintenance of the highest standards of integrity, quality and competition; and an enhanced appeal to our existing customers and the means to attract and retain new ones. All these are within our grasp, if we work together to secure the necessary resources and if we have the will to drive our great sport and industry forward.
We need perhaps more of the sort of drive, focus and determination of the manager of the Treble winners Manchester United, who recently gave us arguably the most breathtaking three minutes of televised sport in history. And where did Alex Ferguson head for to relax after the tension and excitement of Old Trafford, Wembley and Barcelona? Yes, Ladies and Gentlemen … to Pontefract and Haydock Park …. This should tell us something about what it is that our wonderful sport has to offer ….
And to tell you something more about BHB’s approach to the levy negotiations, I now hand you over to the Chairman of the British Horseracing Board, Peter Savill.