The furore over last month’s ruling by the European Court of Justice, which could deprive the BHB of some £14m revenue, shows no sign of abating. Just days after the BHB announced that it will cut costs by £8.7m, The Jockey Club’s senior steward Julian Richmond-Watson has called for the statutory levy to be extended.
“We are lucky that for 2005 the levy and the Levy Board still exist,” he said at the Gimcrack Dinner on Tuesday night. “The government must recognise that we need, at least in the medium-term, to keep a statutory system that guarantees a return to racing of a percentage of the income it generates for others. [This will] allow us to achieve a lasting long-term solution that guarantees the stable funding of the industry. I would ask all those in a position of influence to lobby the government accordingly.”
Earlier in the year, the BHB had agreed with the government that it would replace the levy with income deriving from licensing its database rights from September 2006. When the ECJ verdict called these revenues into question, several industry leaders asked the government to keep the levy in place.
“In the first instance, we believe it is vital for racing to look at the possibilities for an extension to the levy,” Vice-President of the Racehorse Owners Association, Stephen Crown, said at the time. “The levy represents a safe pair of hands in what has become a world of uncertainty.”
Even BHB Chairman Martin Broughton said that, although the BHB remains committed to commercial funding, some kind of statutory cover is necessary in the interim.
Now Richmond-Watson has added his authoritative voice to the chorus. He believes that extending the existing levy would be the obvious way forward for the moment but he also thinks “any extension must give the sport time to establish sound alternative funding”.
“We have an innovative industry and a thriving sport,” he said. “I am sure we will find many ways to secure and increase our income, but we must have that bedrock of financial support that only a statutory agreement can provide for the time being.”
In his view, exploiting picture rights could provide a valuable stream of revenue. “In light of ECJ ruling it may be that picture rights are racing’s most valuable commodity,” he said. “They are something for which bookmakers and punters have shown a willingness to pay and quite clearly they do have an established value. Those who hold those picture rights will have a major say in any future negotiations. I ask them to use them responsibly.”
However, Richmond-Watson believes the value of pictures is limited by the changing world of television. “[Terrestrial TV] coverage remains important as it ensures the sport continues to enjoy a high profile for the right reasons and enables racing to reach a wider audience. But the rise of digital television and the accompanying multitude of channels has resulted in a marked decline in audience numbers on all five terrestrial channels,” he said.
“As a result, the broadcasters are seeking to pay less and less to cover racing. So racecourses get less money for selling the pictures, but the betting industry still reap the benefit by showing the terrestrial races for free in the betting shops, on top of the additional income they generate by punters betting from home. This has to be wrong. We must seek to find a way of ensuring the benefits of terrestrial, and indeed all television coverage, reward rather than penalise the racecourses involved.”
The European verdict, which Richmond-Watson called “the unexpected 50/1 shot,” also threw a spanner in the Jockey Club’s plans to delegate its regulatory role to the Horseracing Regulatory Authority, which was originally scheduled for 1 January.
Until the long-term funding is secured, the Jockey Club has appointed two of the proposed independent directors of HRA to its Regulatory Board: former Chief Constable of Cambridgeshire, Ben Gunn and, in a somewhat surprising choice, former OFT Director General, John Bridgeman.
“Yes, you did hear correctly, the former Director General of last year’s bete noir the OFT,” Richmond-Watson joked in Tuesday night’s speech, adding, “but you’ll be relieved to hear his term of office expired in 2000 before the hostilities with racing began.”
And while he reasserted the Jockey Club’s plans to become “a proper commercial organisation able to grasp the opportunities and lead the way,” Richmond-Watson also warned against the threat of excessive commercialism in racing.
“The pressures will be great and in the new commercial world it will be necessary for brave decisions to be taken if we are going to maintain our income and at the same time protect the quality and diversity which is synonymous with British racing. As we move forward we must guard against the long-term shape of our sport being dictated by what profit margins suit the bookmakers,” he said.
“Yes the European court ruling is a blow and yes there will be some short-term pain for all of us as we regroup and plan the way forward. But if we make a plan, work together and recognise the risks that increased commercialism can bring to our sport, then all the hard work of the past few years will not be lost.”
Meanwhile, the Jockey Club has appointed two independent lawyers to sit on its disciplinary panel. Timothy Charlton QC and Matthew Lohn, who are both experts in regulatory law, will join the panel from January 2005.
The Jockey Club has also recruited a Case Manager, who will assist in handling cases which are due to come before the Disciplinary Panel, while Deputy Senior Steward, Sir Michael Connell is chairing a working group which will look at ways to improve the Club’s disciplinary process and make it more efficient.