Economic Impact of British Racing 2009 Contents
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Economic Impact of British Racing 2009 Contents Foreword 2 Executive summary 4 Introduction 8 Section 1: Overall economic impact Overall economic impact 10 Racing’s cash flow 12 Section 2: Economic factors Employment 14 Capital investment 16 Racing’s tax contribution 18 Section 3: Racing’s participants and customers Racecourses 21 Attendances and racegoers 24 Owners 27 Trainers 30 Breeders 32 Betting 34 Broadcasting 37 Section 4: International comparisons International comparisons 38 Section 5: Sporting, leisure and rural context Rural context 40 Local aspects 43 Racing’s position within the sports market in Britain 44 Leisure comparisons 46 Report preparation, methodology 48 and limitations Glossary 49 Feature articles Ffos Las 17 Haydock Park 23 Lambourn and the North Wessex Downs 31 Point-to-Point 41 This Report has been written in general terms and therefore cannot be relied upon to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from actions as a result of any material in this Report. Further details covering the scope and limitations of our report, its use and our legal responsibilities are set out on page 48. © Deloitte LLP. All rights reserved. Graphic Design: www.heliographic.co.uk Photography: Dan Abraham; www.racingfotos.com · Trevor Jones; Trevor Jones Thoroughbred Photography britishhorseracing.com ECONOMIC IMPACT OF BRITISH RACING 5.7m £3.4bn Attendance at 1,423 fixtures Total direct and indirect expenditure of British Racing 18,600 FTE employees of the core British Racing industry Perth Musselburgh Hamilton Park Kelso Ayr 15,349 Newcastle Average number of horses in Hexham training during the year £450m+ Carlisle Sedgefield Net expenditure of Catterick Redcar owners on training fees Cartmel Middleham Thirsk and horse purchases. Ripon Malton Wetherby Beverley £325m York Pontefract Tax contributed by British Racing Aintree Doncaster Haydock Park Market Rasen Chester Southwell Bangor-on-Dee Nottingham £5.5bn+ Uttoxeter Gross win generated by British Great Yarmouth Wolverhampton Leicester betting operators from British Fakenham Racing in the last five years Ludlow Warwick Huntingdon Towcester Worcester Stratford-on-Avon Newmarket Hereford Ffos Las Cheltenham Great Leighs Chepstow Lambourn Windsor Newbury Kempton Park Bath Folkestone Ascot Epsom Downs Wincanton Sandown Park Lingfield Park 100,000+ Plumpton Taunton Goodwood Brighton Direct, indirect and associated Salisbury Fontwell employment of British Racing Exeter £1.05bn Newton Abbot Direct expenditure of £706m core British Racing Five year capital expenditure of British Racing Racecourses Training centres Note: All figures refer to 2008, unless otherwise stated 1 Foreword The tax revenue from Racing amounts to Understandably, the recession is having an some £1.5 billion over the last five years, effect on British Racing. The first half of with capital investment of over £700m in 2009 has seen indications that there are the same period. We have seen a areas that need close attention. These compound annual growth rate of 6.3%, include declines in the numbers of horses in a rate in excess of UK economic growth. training and owners, certain racecourse revenues under strain, and the bloodstock This report has again focused on the market facing a challenging period. It is national metrics, but also emphasises the likely that things will get worse before they local impact of our sport: the benefits of get better. It is therefore essential that all the Nic Coward – Chief Executive, Ffos Las racecourse are being enjoyed by a constituents of British Racing work closely British Horseracing Authority new rural racing community in West Wales, together to find innovative ways of while a course such as Haydock Park in the mitigating the recession’s impact on the One of the British Horseracing Authority’s urban North West is a significant contributor sport. These developments also highlight many roles is to measure and thereby to its very different region. the need for joined-up planning and demonstrate the sport’s importance to as implementation right across the sport. wide an audience as possible. The report also touches on trends that are not so favourable. The challenge to hold our My thanks go to all of those that have A key measure is the contribution we make place in a highly competitive environment is contributed to this study, and to the project to the British economy: the hard facts that brought more sharply into focus by the team behind it for their diligence. I hope you lie behind a sport unrivalled in reputation current recession. will find it useful and informative, and, most around the world, with a rich heritage, importantly, proof of both the importance of iconic events and year round entertainment One factor that emerges clearly throughout British Racing, and the need for constant for many millions. these pages is the role of racehorse owners vigilance to ensure that it stays that way. as the biggest investors in the sport. Their Racing is part of the country’s social fabric, expenditure on training fees and related and makes an enormous contribution to a spend is largely going directly into the rural wide variety of communities. economy. When you look at comparisons with other countries, those with a system This report seeks to quantify that impact, based on pool betting, this expenditure is and to draw some conclusions for the future. also operating as a cross-subsidy, measured in the tens of millions of pounds, The last Economic Impact report, published to the owners of the commercial in summer 2006, has proved an invaluable businesses that operate around the sport. tool in making Racing’s case. It showed for the first time in a decade just how much the This report shows that we have diverse sport generates for the economy. However, revenue streams and significantly less things change, and the pace of change is reliance on betting income than other particularly fast in some of the dynamic nations, but this does not alter our sectors of the economy in which we continuing view that our return from betting operate – leisure, betting, the media and operators has failed to reflect our true value. luxury markets. More than this though, it is vital that we get this relationship between Racing and The findings of this report are striking. Racing Betting right, so the sport can properly plan remains, by a clear margin, the country’s for the future. Britain remains the leading second biggest sport after the modern stage for the thoroughbred racehorse. commercial and social phenomenon that is football, with core industry expenditure now These figures show apparent strength, and exceeding £1 billion per annum and a total there are a great many enduring success economic impact of £3.4 billion. stories behind the statistics. 2 ECONOMIC IMPACT OF BRITISH RACING Our Report describes a sport that has seen However, a key challenge will be for Racing the benefits of its substantial investment in to find ways of increasing the profile of the improving facilities for racegoers, next tier of fixtures – a challenge the participants and horses. In particular extensive rebranding of Racing project run racecourses’ investment of over £550m in by Racing Enterprises will take up. five years has been a key factor in their strong revenue growth. Other sectors such Many of the metrics we discuss in the as trainers and breeders have also invested Report for 2008 are likely to experience and Britain now has some of the very best declines in 2009, but we are confident that equine facilities in the world. the sport has the ability to bounce back Dan Jones – Partner in Charge, once economic conditions improve. It will be Sports Business Group at Deloitte The Report illustrates both the scale and important that Racing does so in a way that diversity of employment in British Racing. In it becomes stronger, notably by finding ways We were delighted when the British total there are over 100,000 jobs that are of attracting and engaging new participants Horseracing Authority asked us to directly in, indirectly supported by or whether they are racegoers, new racehorse update the results of our 2005 Economic associated with, British Racing. Many of owners or commercial partners. Impact of British Racing Report. Our these are located in rural areas. Report focuses on the period up to and Away from the hard facts, our consultations including 2008, but we also comment on This Report clearly illustrates the wide have found the sport to be more unified, and 2009 developments where appropriate. variety of British Racing – from the hugely one increasingly able to speak with one public popular grass roots racing that is Point-to- voice. The continuation of this attitude will Even before our 2005 report, the Sports Point, to the hosting of many of the world’s be critical as the challenges brought about Business Group at Deloitte had sought top races and festivals. by the recession and wider social, economic whenever possible to tell Racing’s story – and technological changes are faced. namely being the nation’s biggest sport Our work in the Sports Business Group at after the dominant sport that is football. Deloitte has exposed us to the During the course of our research we have Furthermore we have tried to communicate consequences of the global economic consulted with individuals from over 20 Racing’s unique combination of “pure” downturn on many sports.