We have spent plenty of time of late writing about “record revenues” and “booming first-quarter earnings” for sports betting operators. But what about the companies and organizations that provide the sport we are all betting on?
The UK’s Jockey Club, founded in 1750, was for many years responsible for the governance and regulation of UK horse racing. That function has now passed to the British Horseracing Authority (BHA), so the Jockey Club has re-invented itself as an operator of racecourses and, based on its latest figures, the re-invention has been very successful.
The Jockey Club operates 15 of the UK’s racecourses, including Aintree (home of the Grand National), Sandown, Cheltenham (famous for the National Hunt festival), and Newmarket, where the first two classics of the flat racing season will be run at the end of this week.
The figures look good
Figures released for 2017 show that revenues were up 5.2% over 2016 to £201m ($275m) with operating profits before prize money up to £44.8m ($61m). However, prize money also increased in 2017, meaning that profits after prize money fell slightly to £21.9m ($30m).
Jockey Club CEO Simon Bazalgette said he was “pleased with a ninth successive year of commercial growth”. He added that the record turnover had been driven by “general admissions revenues, hospitality revenue, and partnership and media revenues. We are now making good strides in our efforts to engage more people across the country in our sport and we continue to invest in the experience we offer to customers and participants”.
The numbers show that 1.9m people attended the Jockey Club’s 334 days of racing last year and another 2m used its venues for other leisure activities, such as concerts and exhibitions.
Investing in the experience
The Jockey Club has virtually doubled its turnover since 2008, the first year it operated solely as a commercial venture. Operating profit and prize money have both increased and there is no question that something needed to be done about UK horse racing. Despite providing the “content” for the betting shops, it was a sport that was dying.
When I first went racing, it was for hardened punters only. Ladies Day at Royal Ascot might be a social occasion, but if you went to Wetherby in January you were there for the racing. Dining and entertainment? Yes, of course. There were pie and peas and a drunk singing in the stands after the last race.
All racecourses have gradually improved what they offer, both in catering and entertaining. However, this has been accomplished largely on the back of alcohol sales. A day at the races is a day-long exercise in drinking for many people. I went to the Grand National this year for the first time in my life; by the end of the day, Aintree racecourse was literally carpeted with thrown-away plastic drinks beakers. The Jockey Club may claim the day as a commercial success, but environmental campaigners would see it as a disaster.
In truth, there is much for the Jockey Club to address. On the face, their figures for 2017 look good. It is easy for their chief executive to paint a bullish picture but, if you look at the attendance figures in more detail, there is continuing cause for concern, and it’s not just amount of money they will need to invest in recycling.
1.9m people divided by 334 race days is 5,688 people per day. But take away the three days of the Aintree festival and the four days of the Cheltenham festival and the average drops to a little over 4,500 people a day for the best of British racing.
That figure is equivalent to the average attendance at Oldham Athletic Football Club, currently 20th in the third tier of English football or, even more ominously, less than that at Chesterfield, currently 92nd out of 92 teams in the English football league.
So it easy to see that the success of British racing still depends to a very large extent on television revenue, the racecourses being used for events other than racing, and continuing sponsorship by the bookmakers. And that, of course, brings us full circle to a subject we have covered many times: the UK Government’s plans to reduce the maximum stake on Fixed Odds Betting Terminals, and the impact the bookmakers say that will have on their continued support of British racing and, by implication, the continued success of the Jockey Club’s racecourses.
We have spent plenty of time lately writing about “record revenues” and “booming first-quarter earnings” for the sports betting operators. But what about the companies and organizations that provide the sport we are all betting on?