BHB says new plan may bring in £140m

The British Horseracing Board yesterday published details of the funding plan it hopes will increase the industry's income by £50 million a year. Subject to the approval of racing's many special interest groups - most notably the racecourses themselves - the plan comes into effect on 1 May 2002, and will generate, according to Peter Savill, the chairman of the BHB, "income streams of no less than £140 million compared to a current level of less than £88 million."

The British Horseracing Board yesterday published details of the funding plan it hopes will increase the industry's income by £50 million a year. Subject to the approval of racing's many special interest groups - most notably the racecourses themselves - the plan comes into effect on 1 May 2002, and will generate, according to Peter Savill, the chairman of the BHB, "income streams of no less than £140 million compared to a current level of less than £88 million."

The new plan is designed to replace the Levy system, which has provided money for racing from betting turnover for over 40 years, and will, Savill said at yesterday's launch, "put the racing industry back in control of its own destiny". Its key feature is a 10-year agreement between the BHB and the Racecourse Association (RCA) to pool British racing's media rights into a single package for sale both to bookmakers and broadcasters, whether they be on terrestrial television, interactive television or the internet.

If the plan unfolds as Savill envisages, racehorse owners can expect to benefit from significant increases in prize money. However, the full implementation of the plan is out of Savill's hands, since it depends on the agreement of the owners of Britain's 59 racecourses, who hold the media rights concerned. Some may feel the slice of the pie being taken by the BHB - 20 per cent of any income above that which is currently provided by the Levy system - is too high.

Britain's bookmakers will also have something to say about the plan's implications, although Savill said yesterday the projected £50 million increase in income will be achieved "without any increase in costs to the betting industry." That does not, of course, rule out any increase in the future, and the details of the pricing structure by which they will pay for access to live coverage of British racing has yet to be finalised.

"The pricing structure will be developed over the course of the next few months," Savill said. "We will take into consideration precedents and benchmarks relative to the racing industries around the world to decide what this will be."

One element which it will include, however, is access to pre-race data, and in due course live action pictures, on internet betting sites. "This will give us the opportunity to capture something which we cannot currently capture," Savill said, "which is a proportion of offshore betting turnover." Clearly, he sees it as an anomaly that Ladbrokes in the UK pays a percentage of turnover to the Levy, while its internet arm in Gibraltar does not. One man's anomaly, though, can be another's competitive advantage, and again, there will be plenty of haggling before any agreement can be reached.

Before the industry can sit down with the bookies, the plan will need to be ratified by the tracks, at a meeting of the RCA on 21 November. As the RCA's Angus Crichton-Miller admitted, "we cannot force racecourses to sign up." However, he expressed confidence approval would be forthcoming.

Should this approval be forthcoming, Savill said, it "would turn around the situation whereby the pricing of our product was under the control the betting industry. It will change it around to the normal commercial mechanism of the seller being in control of pricing, while also being careful not to fall foul of OFT and EU legislation on monoplies. Our pricing structure must be fair."

The BHB's timetable predicts that discussions with bookmakers will take place between January and April 2001, and, given the sums involved, the negotiations will be both sensitive and ruthless. Both sides are well aware, however, that there is now a global market for betting, and one which likes to bet on British sport because it is seen to be straight, and with British-based bookmakers for much the same reason. If both sides have the vision to exploit the situation, there could be a lucrative future for all concerned.

* Aidan O'Brien was among 2,000 Irish racing professionals who joined in a demonstration at the Curragh yesterday to call on the Turf Club to "respond positively" to the government's funding proposals to secure the future of the sport.