“The British Horseracing Boar?_x0019_s Plan for the Future Funding of Racing was published at a press conference in London today.
Following its unanimous approval by the BHB Board last week, the Plan was sent last Friday (13th October) to Home Office Minister, Mike O’Brien, who in March asked BHB to develop a realistic Plan for the Future Funding of Racing following the abolition of the Horserace Betting Levy Board.
The key points of the Plan are:
? The structure for the future funding of British Racing is based on the combining of all of British Racing’s rights into a rights package for sale to bookmakers and media companies.
? Combining rights will enable British Racing to develop a sufficient, dependable and sustainable income stream; to enforce and cross-enforce the use of its rights package; to work together with the betting industry more efficiently and cost-effectively; and to operate as a more united industry with a clearer strategy.
? Rights will be combined under a 10-year agreement between BHB and the Racecourse Association (RCA).
? BHB will take the lead in negotiating with UK and Irish-based bookmakers for all betting rights and with all bookmakers for internet rights that do not include pictures; RCA will take the lead in negotiating media rights and other deals through a Newco.
? Income generated from all deals will be fully disclosed to each party and aggregated for the purposes of division.
? Current income levels will be distributed on the basis currently applied by the Levy Board and racecourses.
? Incremental income will be divided 40% to the prize fund, 40% to racecourses and 20% to BHB. BHB, other than in exceptional circumstances, will allocate not less than 30% of its share to prize money, appearance money, owners’ premiums or breeders’ prizes.
? BHB will be recognised as the central funding successor to the Levy Board with the maintenance of integrity and security as its key financial priority. The expertise of current Levy Board staff will be utilised where appropriate and cost-effective.
? Existing structures and mechanisms by which industry funding is directed will be maintained. These include Basic Daily Rates, the Merit Table, Minimum Values, Fixture Fees, Fixture Incentives and the Capital Fund.
? The Capital Fund, subject to Government confirmation, will be transferred to BHB. BHB will then transfer it to a Trust for the duration of the agreement between the BHB and RCA to be administered by three Trustees. The Fund will be set initially at £50 million and be available to racecourses and other organisations which are currently HBLB beneficiaries for capital improvements.
? British Racing’s agreed new commercial mechanism and funding structure will enable Racing to better control its own destiny and to better work together in a climate of shared responsibility, aggregated income and pre-determined revenue allocation. It will also enable the racing and betting industries to negotiate more effectively with each other.
? British Racing can expect to generate, in the short-term, not less than £140 million per year from betting and media deals compared to less than £90 million at present. This would represent an increase of around £50 million per year to Racing.
? It is intended that the new commercial mechanism will operate from the expiry of the current RCA/SIS agreement on 30 April 2002. It is hoped to agree transitional arrangements for the move from statutory levy to commercial contracts by October 2001.
The Plan will now be recommended by the relevant BHB Directors to their industry bodies for ratification by mid November.
BHB Chairman Peter Savill said:
“I am very grateful to all my colleagues on the Board for the support they have given in developing this Plan which will provide a basis for a much sounder financial future for the industry. There have been some difficult issues to resolve, particularly with the racecourses, but the fact that we have been able to reach unanimous agreement on the way forward bodes well for the future. We will now be discussing the details with interested parties within Racing and with the betting industry.”
Also present at the press launch were BHB Directors Angus Crichton-Miller (Chairman of the Racecourse Association), Nigel Elwes (Chairman of the Thoroughbred Breeders Association), Rhydian Morgan-Jones (Chairman of the Industry Committee (Horseracing) Limited), Sir Eric Parker (President of the Racehorse Owners Association) and Christopher Spence (Senior Steward of the Jockey Club).
Copies of the Future Funding Plan are available from Gill Nevin on 020 7343 3335
For further information, contact BHB Managing Director Chris Reynolds on 020 7343 3311
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