Thank you, Chairman, for the opportunity to articulate the British Horseracing Board’s (BHB) perspective on the many contentious issues which confront British Racing and Breeding at this time. Firstly, I must commend you and the Thoroughbred Breeders’ Association (TBA) on the considerable achievements accomplished by you, your astute executive team and the TBA Executive during the past 12 months.

I must add that when in reflective mood racing and breeding industries worldwide tend to exaggerate the negatives without accentuating the positives. I am pleased that your chairman’s speech contradicted this perception of racing and breeding administrators. Not only has the TBA successfully argued for the retention of Breeders’ Prizes, secured in-principle funding of the Equine Fertility Unit, contributed greatly to enhancements in the Pattern for fillies and mares but, importantly, has contributed to the development and introduction of an Owners’ Premiums Scheme.

These are the manifest successes of the TBA and they, coalescent with enhanced revenue streams to the sport, can only bring greater prosperity to those who make up our great sport.

I mentioned earlier that we tend not to accentuate the positives and I’m going to continue Philip’s trend and concentrate on the overwhelming successes enjoyed by British Racing in recent times but I will of course conclude with a State of the Nation address on the Office of Fair Trading (OFT), its implication both positive and negative and the status of the sport’s response to the Rule 14 Notice.

British Racing in 2003 has enjoyed unparalleled success with attendances expected to nudge 6 million patrons for the first time since the mid-50s, wagering turnover exceeding £9bn not taking into calculation turnover generated by betting exchanges and prize money that will approach £94m which if not for the unfortunate reductions in Basic Daily Rates invoked by the Levy Board would surely have surpassed £100m for the first time.

This progress can only be maintained with a strong governing authority which balances commercial freedom with a sound meritocratic ethos, delivering certainty to industry participants. Witness the restoration of Minimum Values from the start of this year, back to their original 2003 levels which we were forced to suspend temporarily for the last third of 2003 after the Levy Board’s cutbacks. Prize money is back where we wanted it.

That restoration of Minimum Values provides confidence and a sound basis for financial planning and strategy throughout the industry. Such mutually agreed structures help, not hinder, Racing.

This is a sport in the ascendancy, this is a sport that captures more telecast hours of free-to-view television than any other, this is a sport that employs 60,000 people, a sport that generates in excess of £450m a year in tax and betting duty, this is a sport that is universally acclaimed for its diversity: from the Grand National at Aintree to a Bumper at Exeter, from the Epsom Derby to a Seller at Catterick, from the nuances of Chester to the expanses of Newmarket, from the recent and continuing development of All Weather Track racing to the splendour and undoubted highlight of the international Turf calendar at Royal Ascot, British Racing exemplifies diversity. This prized asset is complemented by the diversity of our racing programme.

Much has been mentioned about the threats confronting National Hunt racing, I intend to argue the contrary. What Jumps racing does confront are challenges but I am convinced that the pulsating appeal of National Hunt racing, the passionate commitment by all who contribute to its success and the quintessential British-ness of National Hunt combined with a strong commercial emphasis will unite and ensure prosperity for this vital component of our great sport.

I am on public record as saying that consolidation of the National Hunt fixture list is an imperative that the Board must contemplate to ensure that the Jumping code can grow from a strong foundation. The Racing Review highlighted an absurdity from a commercial perspective where in excess of 40% of jumping events in 2002 attracted less than 8 runners. I cannot emphasise strongly enough the synergy between competitive field sizes and consumer interest. We have responded immediately by reinforcing the remit of the Jump Racing Advisory Panel and it is their objective to unite 3 distinctive yet cohesive objectives:

i) to enhance the quality of the racing programme, specifically, the graded events,
ii) to promote a racing programme that correlates with the quality characteristic of the horse population, and
iii) to design a programme that is a commercially attractive proposition to producers and consumers alike.

The BHB has the utmost confidence that the Jump Racing Advisory Panel will accomplish these aims and in doing so provide a platform for the future growth of National Hunt racing in this country.

You should not misconstrue the emphasis on National Hunt as an emphatic endorsement of the Flat, indeed, the challenges are as redolent as those confronting Jumps racing. We cannot countenance small fields, uncompetitive racing, inexorable increases in ballots, the lack of racing opportunities and the missed commercial and financial opportunities that are to be derived by a more forensic approach to race planning.

I emphasised the significance of diversity earlier as a prized characteristic of British Racing. The British breeding industry has contributed to this diversity and is exemplified by the catalogue of Group One successes of British-bred horses on the international stage during 2003. Champions of the Turf such as:

Sulamani Belmont Turf Classic and Arlington Million
Red Bloom Meon Valley Fillies Mile
Heat Haze Matriarch and Beverly D Stakes
Makybe Diva Melbourne Cup
Zee Zee Top Prix de l’Opera
Indian Haven Irish 2000 Guineas
Leadership Gran Premio Di Milano
Oasis Dream July Cup and Nunthorpe Stakes

to name a few.

Winners of the Nunthorpe to the Prix du Cadran and all distances in between carried the GB Suffix to victory in Group One events during 2003.

I wish you continued success in your endeavours to breed future Group and Grade One champions.

The first step to realising the sport’s aspirations for the future was the formation of the Racing Review in June 2002. This form of self appraisal from both a producer and consumer perspective has crystallised a multiplicity of recommendations, some tinkering around the edges whilst others are innovations that will undoubtedly propel the sport to greater success.

One of the most important of these and obviously resonant to those in attendance today, is the introduction of the British Owners’ Premiums Scheme. In the terms of the Scheme, 25% Owners’ Premiums will be available to qualified British-bred 2, 3 and 4 year old horses on the Flat and to all ages in Jumps racing, with the added bonus of 50% premiums payable to qualified British-bred fillies and mares competing in National Hunt racing.

The BHB’s motivation to install an Owners’ Premiums Scheme is summarised as follows:

i) It places the British breeding industry on a more level playing field with Ireland and France, notwithstanding that the Irish breeding industry enjoys a taxation regimen unparalleled in beneficence within the international breeding community

ii) It will encourage prospective owners to purchase British-breds with an obvious positive financial impact for owners of British mares.

iii) It will encourage mare owners to send their mares to British stallions which we hope will incentivise British studs to invest in stallions of the highest calibre of racecourse performance and pedigree.

iv) It will induce owners to send their horses jumping and particularly encourage owners to send fillies and mares to National Hunt as a consequence of the 50% Owners’ Premium attributable to qualified British-bred fillies and mares competing within the code.

Your chairman alluded to the recently revised terms of the Owners’ Premiums Scheme which now incorporates British-bred foals purchased at public auction in Britain and subsequently exported. The TBA was at the forefront of bringing about this fundamental change to the Scheme. The Owners’ Premiums Scheme is evolutionary and if the BHB and industry believe modifications are warranted we will act decisively as demonstrated by the aforementioned improvement.

We are confident that this Scheme will prove a resounding success and lead to greater prosperity and viability for the British breeding industry. I fervently hope the Owners’ Premium Scheme attracts the constructive publicity that it deserves. A concept that at maturity will inject in excess of £7-8m into the racing and breeding economy of Britain can only be a positive for the sport and I hark back to my earlier comment: accentuate the positive.

Whilst not of the same magnitude as the introduction of the Owners’ Premium Scheme, another innovation that has emerged from the Racing Review is, of course, Regional Racing. The early signs are positive; bookmakers have not discerned a decline in punter interest, field sizes are competitive, racecourses have expressed strong support for an innovation that is predicated on providing racing opportunities for those horses whose owners have been continuously denied and, importantly, provides wagering opportunities and as a consequence, levy generation, which can only contribute to a more prosperous racing industry.

Our aspiration at all times must be for the enhancement of the breed and a commitment to quality yet there must be an acknowledgement that not every Sadler’s Wells is a champion, that not every breeder savours a Group One success and that not every owner intentionally seeks to purchase lowly rated racehorses.

“The Improvement of the Breed” is a tenet that the British Racing and Breeding industries must unremittingly commit to.

Finally, to the OFT. As you are aware, we have rigorously argued that the OFT is under a fundamental misapprehension in its interpretation of British Racing so I make no apology for the aggression in defending the unique characteristics of British Racing and its reputation as the pre-eminent racing nation in the world.

The onset of a free-for-all might in the short term benefit some racecourses, however, in the long term money will be driven out of British racing and into the hands of only one of racing’s customer groups, the bookmakers. I am surprised by the naivety of the OFT’s logic if they seriously consider that the punter will be a beneficiary. There is no doubt in my mind that the British Punter already enjoys a substantial benefit from what is undoubtedly the most energised betting environment in international racing. A more plausible outcome is that money will be driven to bookmakers to enlarge their respective annual profits.

The ability of bookmakers to act as a buyer cartel for British racing’s data and picture rights will remain unimpaired if indeed the OFT succeed and by doing so incredulously infers that the OFT sanctions buyer cartels. The only means to effectively negotiate with a collective buyer with the magnitude of market capitalisation of British bookmakers, is for the sport to collectively sell its assets. This principle cannot be compromised.

The bookmakers are aware that the short term gain will transpire into de facto ownership of the sport, however, they will inherit a sport deficient in quality, diversity, competitive balance and ultimately, integrity. Thankfully, they are astute to know that long term profit is underpinned by British Racing retaining its essential characteristics.

My prediction is that there could be no winners as the OFT would induce mediocrity in the mistaken belief that market forces are king. British Racing does not deserve that fate. The more resplendent ideal of excellence is inspiration that compels British Racing to fiercely resist the OFT’s erroneous legal and economic arguments.

A homogenised sport dependent upon All Weather Track racing at the expense of all that is resonant with British Racing as it stands today is a fate that awaits British Racing and its customers if an adverse ruling succeeds.

The OFT does not understand that British Racing is a multi-faceted sporting entity, collaborative by design and cognisant of the interests of its many constituent members. It operates in a highly competitive market covering a multiplicity of sporting and leisure opportunities. British Racing, like all sports, needs an invigorative and strategic governing authority if it is to continue to expand and flourish.

The OFT’s contentions overlook the fundamental role of governing authorities which, if they succeed, will have a lasting repercussion for all sports, not only in the OFT’s jurisdiction but internationally. The balancing of interests, the recognition of other points of view and a commitment to consultation are hallmarks of BHB’s governance role.

British Racing is more than a nebulous concept such as a British Racing “opportunity”. It involves a broad church including owners, racecourses, breeders, bookmakers, punters, racegoers, broadcasters, trainers, jockeys, stable staff, administrators, sponsors et al. It is likely the renowned characteristics of our sport: excellence, quality, diversity, meritocracy and competitive balance would not survive an adverse OFT ruling.

The question we need to ask is how do we contemporise the sport commercially and as an entertainment option without discarding the undoubted success of 250 years of British Racing?

The immediate objective is for the sport to rationally and constructively formalise a governance and financial structure for racing that will last long into the future. Opportunism and procrastination are not options. British Racing has evolved over 250 years to an entity universally admired and respected, of unparalleled quality, of unremitting commitment to integrity and to the financial and social advantage of British economy and community.

I have argued consistently that the OFT investigation is an opportunity and not a threat. That opportunity now resides with the sport’s stakeholders. 2004 will be designated as a watershed year; one in which BHB will work in collaboration with all industry stakeholders to ensure that British Racing is stronger at its conclusion of 2004 than its genesis.

In conclusion, I once again thank the TBA for inviting me to contribute to their 2004 Annual General Meeting and I look forward to working with a very important constituent of British Racing, the British breeding industry, in bringing greater prosperity and viability to a sport unrivalled by its international contemporaries that is British Racing.