Letter: If you're in a hole, stop digging!
UNLKE the canny Tom Kelly of BOLA, both Ian Spearing of Hills and John O'Reilly of Ladbrokes pressed on regardless over fixtures and levy issues (November 3). Had they asked him, he might have given them the sage advice that, if you find yourself in a hole, it is wise to stop digging.
Ian sought answers to six questions and John to several more, and these are all provided below. However, it seems sensible to restate the nature of our disagreement as it is absolutely fundamental to the fixture list, the levy and the future of both, with the impending end of the five-year deal by October 1999.
It is as follows:
a) The BHB considers that racing earns considerably more via levy and racecourse receipts combined if two fixtures are used to fill a blank evening or Sunday, as opposed to being placed as additional third fixtures on either Monday or Tuesday afternoons.
b) The betting industry's representatives apparently believe that the losses arising to the levy from our configuration are so large that they exceed any small gains at the gate.
My responses to the specific points they raised show why they are wrong on this central issue. They also show why I stated before that their earlier comments were untrue where relevant and irrelevant where true.
1. The effect of the Lottery was reduced by the big three joining the Company Scheme.
This is perfectly true. One must presume they opted for this scheme in the first place because they did not expect the Lottery to have such a dramatic effect. If they had been right they would still be in the Company Scheme and racing pounds 5 million richer for that reason alone.
2. Racing needs to provide a balanced and competitive programme to maximise levy.
Also perfectly true, as far as it goes. However, maximising the levy is only one of our legitimate aims and there are other routes to achieving additional net income apart from programming.
3. The big three having switched out of the Company Scheme, a 1 per cent drop in turnover causes a 2.46 per cent reduction in levy.
Perfectly true, and a fact which we will take into account both when negotiating a new levy deal and when considering fixture changes.
4. Gate receipts belong to racecourse owners and not to the Levy Board or racing in general.
True, but simplistic. Racecourses are very much part of racing and, unlike bookmakers, pay virtually no dividends.
The new incentivisation arrangements for distributing Levy Board support to them adds considerably to the attractions of prize-money as a use for any extra income from racegoers. Anyway, because racecourses are part of racing, whether income is used for improvements to the track, stands or prize-money, is just a matter of judgement. Racing wins whatever is decided, so long as the decisions are sound.
5. BHB directors with racecourse involvements have a conflict of interest over the fixture list.
True, in a narrow sort of way, but very simplistic. Their racecourse involvements, just as much as their BHB directorships, arise from a wish to help racing thrive, so conflicts are really illusory.
Per contra, the betting industry's conflict of interest when pontificating on our fixture list is of monumental proportions. Indeed, its advice is entirely based on self-interest, as is perfectly proper, given its need to reward its shareholders with substantial dividends.
6. Betting tax plus levy amounts to one third of all punters' losses, so it is in everyone's interest to reduce tax levels.
True, but, yet again, pretty simplistic. Racing is grossly underfunded, and passing on savings from tax reductions would be one way of addressing the problem. However, as the betting industry increasingly appreciates, it is not the only one.
7. Third afternoon meetings increase turnover and levy by 20 or 25 per cent.
Untrue. If they increased turnover by 20 per cent they should increase levy by a rate of some 2.46 times more, as pointed out by Ian Spearing himself. In any case it is not what they increase either by that matters to us-it is whether those increases are more or less than would arise from putting the meeting elsewhere, and by how much.
8. Moving such a fixture to an evening costs pounds 15,000 in levy.
Denied. John O'Reilly provided me with a folio of statistics in an attempt to prove this point but, after a protracted correspondence, we narrowed the gap but ultimately agreed we had to differ.
As I have pointed out before, it is inherently a highly implausible theory that turnover on Monday and Tuesday in a week will be improved if a Monday evening is blacked out and its two fixtures removed to become third meetings on those same afternoons. Bookmakers' profits would certainly be significantly improved by cancelling a betting session, but turnover? I fear we are back to legitimate self-interest with a vengeance.
9. Only an average 300 extra racegoers attend in the evening.
Untrue. The last full set of figures was up for 1996 and showed the following results when contrasting midweek evenings and afternoons:
For major meetings, excluding festivals, evening attendances were 7,533 and afternoon attendances were 4,638, representing an average evening gain of 2,895.
For minor meetings on turf, evening attendances were 3,436, afternoon attendances were 2,029, representing an average evening gain of 1,407.
(Attendances used were from all five weekdays. If cut back to Monday and Tuesday afternoons only, the gap would be even bigger.)
It is nice to end this letter (and I hope this correspondence) on a note of agreement.
John O'Reilly is right to say that racing and the betting industry should co-operate to their mutual benefit, and recently we have done so a good deal better than in the past.
Whether this can be extended to the central issue of underfunding remains to be seen since, as they say, it takes two to tango, and the betting industry has never struck me as being keen on ballroom dancing.
DAVID OLDREY Chairman Race Planning Committee BHB
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|Publication:||The Racing Post (London, England)|
|Date:||Nov 10, 1998|
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