The recent news that the levy yield for 2018-19 will be considerably less than anticipated is the latest setback for racing’s finances and the battle to improve funding throughout the sport.
From a total of £95 million in 2017-18, the latest figure of £78m represents a decline of £17m and the Levy Board has issued a statement saying that it will need to make a £5m cut to expenditure this year, with prize-money set to bear the brunt.
Racing’s income was already under pressure following the government’s decision to change the maximum stake for fixed-odds betting terminals (FOBTs) to £2 from £100, putting pressure on betting shops that pay to broadcast live pictures. A number of racecourses have cut their executive contribution to prize-money as a result, reacting to an expected decline in media rights revenue.
This precautionary approach has also seen huge values being knocked off some of our best-known races. Newmarket’s grand plan to stage a £1m Cesarewitch in 2020 has been shelved; the 2019 renewal, instead of being worth £750,000, will be run at £350,000 (the 2018 race was worth £500,000).
In such times, it’s reassuring to know there is one source of funding that won’t be blown off course by winds from the gambling sector. The British EBF will put £1.7m into prize-money this year, the vast majority of which is generated by the UK’s stallion studs, with additional income from an international pool.
The EBF was established in 1983 after the Levy Board announced the previous year that it was cutting back its contribution to maiden races. Stallion owners in Britain, worried about the impact on the yearling sales, soon brought into the concept – other European countries came on board and the EBF was up and running.
“The beauty of the EBF is the consistency,” says Kerry Murphy, EBF Chief Executive. “The stallion owners sign up in July and pay us in December. Once the stallion income arrives we know what we can pay out.
“We have a mechanism for charging stallion owners based on a stallion’s fee and the number of mares covered. We have a minimum fee, which is very reasonable, while if a sire covers over 120 mares it’s three times the average value of nominations sold.
“Arguably, the mechanism is now out-dated; it was probably brought in 20 years ago when 120 mares was considered a high number. However, we don’t have a plan to bring in a new mechanism for 200+ mares. We have to be fair in what we charge.”
With huge fees commanded by the likes of Dubawi and Frankel and younger sires like Kingman impressing with their early crops, the picture looks rosy for the EBF’s future funding, though Murphy is far from complacent.
“We have a mechanism for charging stallion owners based on a stallion’s fee”
“A declining broodmare population would have an impact [on our income] but our biggest concern is the lack of diversity among stallion owners – we have a small number of people standing stallions in this country; there are more in France and Ireland. We want more owner-breeders, more people who are prepared to stand stallions down the line and more independent stallion farms.
“I keep a close eye on what is happening at the sales, as I think that’s the best barometer of where things are. More people breeding racehorses would drive nominations. We want to see high clearance rates and, most importantly, strength in the middle market.
“It’s better at the moment with the likes of Whitsbury [see sidebar], Newsells and Tweenhills doing well. What you don’t want to see is two stallions at the top end covering lots of mares at a huge fee and then the rest, because then you create a polarisation.
“Stallion fees are buoyant at the moment; if the market crashes in five years then EBF prize-money will be proportionate to that income, but it will always be there. We don’t hold huge reserves, only keeping back £50,000 in case of a disease outbreak that could be called upon if needed.”
The EBF’s individual contributions to prize-money ranges from a few hundred pounds up to thousands for a race like York’s Convivial Maiden Stakes, the most valuable such contest staged in Britain. The majority of EBF money goes towards the Flat though £125,000 is spent on jump racing, including on EBF Finals Day at Sandown in March.
As racecourses prepare for a fall in income and cut their own contributions accordingly, the EBF knows it must ensure its money is allocated fairly.
Murphy explains: “The British EBF works closely with the BHA and racecourses and we deal with the racecourses directly as to where the money goes; 70% of two-year-old maiden and novice races have to be confined to EBF-eligible horses.
“However, a racecourse has to be running races at minimum values or they won’t receive EBF money [the EBF money is on top of the minimum race value]. If a racecourse is not adhering to the criteria, then we will not hesitate to take them off the list.
“We try to support every track in the country and do not discriminate geographically, as our money must be made available to all EBF-eligible runners.”
The EBF cannot put money into Group races on the Flat, though that does not mean its support does not help plenty of horses that go on to become high-class performers.
Studies instigated by the Thoroughbred Breeders’ Association identified a lack of opportunities for fillies and the need to protect Britain’s staying horse population. EBF money was put towards both areas, with assistance from the BHA to create suitable race opportunities.
A new partnership with Matchbook will see the betting exchange match the EBF’s prize-money contribution in 16 juvenile staying contests and offer a £100,000 bonus for any successful graduate that goes on to win a Group 1 race over ten furlongs or more during their three-year-old season.
Murphy says: “It was clear that there was a lack of decent prize-money available for fillies so a series of handicaps was introduced to encourage ownership and retention of fillies. Also, we wanted these fillies to be retained for the British breeding industry. We put £300,000 towards these races from our fund and this has been an excellent series.
“The other big achiever for us has been the sire/dam restricted two-year-old races [open to juveniles whose sire or dam won over 10f or further], which followed the TBA review into stayers. Amazingly, although these races have only been running for a few years, two of the graduates are Cracksman and Stradivarius. So this is looking like a very successful collaboration.”
It’s difficult to discuss anything to do with Europe at the moment and not mention Brexit. For the racing community, plenty of questions remain unanswered but Murphy hopes the EBF’s ethos continues after the saga has eventually played out.
“The other big achiever for us has been the sire/dam restricted two-year-old races”
“I’d like to see the European countries being interchangeable in terms of mares visiting stallions, horses running and yearlings being sold without restrictions,” Murphy says. “Once a horse is eligible to run in an EBF race they are eligible to run throughout Europe and we want that to continue.
“The fact is you have to be in – 99% of thoroughbred stallions are EBF-registered and if you are standing a sire seriously in one of the member countries and you have visiting mares, or your own mares and you intend to race the progeny, you have to join the EBF.”
Encouraging owners or breeders to stand a stallion may not be an easy task, but Murphy believes the way to do so is to continue to focus on prize-money as a means of rewarding participants.
Murphy says: “We want new owners coming into the game, having horses in training and getting a return on their investment if their horses are good enough. If you have spent a lot of money on a thoroughbred as an owner or breeder, there should be a reasonable return or potential for return.”
She adds: “How many people who stand a stallion or buy a stud don’t reinvest in mares or keep racing horses? How many stallion studs or breeding farms sponsor races?
“These people don’t stand a stallion and then take all the money; they spend it back in the industry. Which is good news for racing.”
The stallion master’s view
Ed Harper, Whitsbury Manor Stud
We are very big supporters of the EBF and love what it does. It is a well-run organisation – we speak to the EBF team frequently and they listen to your views.
Nobody needs to be told about the importance of prize-money at the moment, so the contribution of the EBF via stallion owners is vital.
Whitsbury welcomed a record number of mares this year and we stand a very successful and popular stallion in Showcasing – he covers over 120 mares so we sign a cheque for the thick end of £100,000. It’s a sizeable sum but it’s going into prize-money and we hope it will help to boost demand at the sales.
We bred Good Vibes, a daughter of our stallion Due Diligence, who won the Listed British EBF Marygate Fillies’ Stakes at York. That was the perfect scenario and I’m thrilled for the Rooneys who own her.
The current strength of British stallions is a real success story. We were in the doldrums during the 1980s and 90s but now the sector is the strongest I have known it. We have direct access to internationally renowned sires and long may it continue.
There is a correlation between the strength of the stallions and the health of the industry; we want to stay near the top of the pile. After all, people don’t have to stand stallions in this country.
Obviously, we are a commercial operation and we would like the money that we contribute to be put towards races that support the type of sires we stand.
Plenty of owners don’t want to wait a long time to see their horse in action, as the market indicates. The EBF is doing an excellent job but we need to keep it on the right path and always look at where the money is being spent.