Cheltenham Festival on track for the future

Bob's Worth (centre) on its way to winning the 2013 Betfred Gold Cup Cheltenham is one of 15 major race courses run by the Jockey Club

Fifty years after the Cheltenham Festival course escaped from the potential clutches of property developers, the event's organisers are building a business model for the next half century and beyond.

The famous jumps horse racing event could have been lost to a housing development if it was not for a group of Jockey Club members in 1964 - led by Johnny Henderson, father of champion jumps trainer, Nicky Henderson.

They formed Racecourse Holdings Trust - now called Jockey Club Racecourses - a non-profit organisation, that raised £240,000 to purchase the racecourse and safeguard its future.

The large amount of land was highly valuable as a property investment, says Jockey Club chief executive Simon Bazalgette, looking back at those days.

'Very positive'

Over the past 30 years, some £80m has been spent on facilities at the course, and a further £45m is to be spent on a new grandstand in time for the 2016 festival.

Work will start immediately after this week's four-day festival, which runs from Tuesday to Friday, and which Mr Bazalgette is confident will create as much interest as in previous years.

Race-goers enjoy a drink at the 2013 Cheltenham Festival A total of 235,125 spectators attended the festival in 2013

"We are very positive and very optimistic that our ticket sales will match or better last year," says Mr Bazalgette.

Two years ago the Gold Cup day attendance was 70,458, a record for a single festival day. However this year, as last year, the attendance will be capped at 67,500.

"The cap was brought in to make sure everyone has a good and safe experience," says Mr Bazalgette.

This year's festival has seen a number of new commercial partners on board - jeweller Boodles, bath and body products firm Baylis & Harding, fashion brand LK Bennett, and bookmaker Bet Victor.

Cheltenham Festival in numbers

Simon Bazalgette, chief executive of The Jockey Club
  • £3.825m in total prize money
  • £1.050m prize money on Gold Cup day
  • 10,745 bottles of champagne sold
  • 10,000 Irish racing fans
  • 4,500 staff working
  • 800 media accreditations

Meanwhile an existing sponsor, insurance firm JLT Group, has been upgraded to backing a higher-profile race.

In addition, organisers are testing free wi-fi for festival race-goers for the first time this year.

Another new development is the presence of an Albert Roux restaurant, called Fairlawne - the first time the course has added a prime dining facility.

"Hospitality sales are strong this year, ahead of last year, and sold out on the Thursday and Friday of the festival," says Mr Bazalgette.

"The addition of Fairlawne means we will make more revenues from hospitality this year."

On the racing side a new trophy, called the Prestbury Cup has been launched across the week, for the winner of the contest between the British horses and Irish horses.

The cup will go to the first country that produces 14 winners or more in the 27-race festival.

Betting levy

The major race at Cheltenham, the Gold Cup, is sponsored by betting firm Betfred.

Jump racing's other two "crown jewel" steeplechase races are also currently sponsored by betting companies, namely the Betfair Chase at Haydock, and the William Hill King George VI Chase at Kempton.

Harry Derham celebrates on Salubrious after winning the Martin Pipe Conditional Jockeys' Handicap Hurdle on Cheltenham Gold Cup day 2013 There are 27 races spread over four days of racing at the Cheltenham Festival

There has been talk within racing about whether the three races could be brought under one "Triple Crown" banner with a single sponsor, and one too that might not necessarily be a betting firm.

But Mr Bazalgette says: "We would never exclude betting firms from any sponsorship opportunity - they are good consumer brands."

He adds: "A big three sponsorship deal is something we may do in the future - but it is not something we are looking at doing any time soon."

Start Quote

Cheltenham is the World Cup of jumps racing, and it is in rude health”

End Quote Simon Bazalgette Jockey Club chief executive

Another financial issue lurking ever-present is the matter of the betting levy. Bookmakers pay 10.75% of gross profits from racing bets to the Horseracing Betting Levy Board, which makes grants to support the sport.

However, the levy does not apply to the most "remote", ie offshore-based, gambling companies, although leading betting exchange Betfair has signed a five-year deal to voluntarily pay the levy.

"For the first time ever we have a pretty stable position for the next four years, with the industry having done a deal with the big four bookmakers and Betfair," says Mr Bazalgette.

"The fundamental issue is that remote operators on the whole don't have to pay the levy. We have to work with bookmakers to continue to build the market for horse racing."

There may be some changes afoot however, with a recent announcement in the House of Lords, that the law will be changed to force overseas bookmakers to pay the levy.

The government plans to bring forward an amendment to the Gambling (Licensing and Advertising) Bill to create a "level playing field" on the levy between UK-based and overseas bookmakers.

Building fan base

Meanwhile, the Jockey Club is continuing with a series of initiatives to sell the sport, which is second only to football in its number of spectators.

Jockey Club Racecourses

  • Aintree
  • Carlisle
  • Cheltenham
  • Epsom Downs
  • Exeter
  • Haydock Park
  • Huntingdon
  • Kempton Park
  • Market Rasen
  • Newmarket July Course
  • Newmarket Rowley Mile
  • Nottingham
  • Sandown Park
  • Warwick
  • Wincanton

Its concerts-at-racecourses business has been brought in-house, with a new joint venture company Jockey Club Live created earlier this year.

There are also a number of ticketing and fun-day initiatives to attract children and younger adults to horseracing, and later this year a series of short audio-visual packages, called Racing Explained, will be produced for spectators.

"The aim is to demystify the sport," says Mr Bazalgette. "We are trying to help the people who go racing but are not experts, so they can enjoy the sport more, and we can build a more loyal fan base."

It is a busy time for the Jockey Club, with building firm Kier last week named as contractor to build the new Cheltenham grandstand.

"It is the World Cup of jumps racing, and it is in rude health," says Mr Bazalgette. "This year we expect it to be as big as it ever has been.

"Fifty years after saving Cheltenham from property developers, the home of jumps racing is thriving through investment."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Business Live

  1.  
    11:29: Noisy Japanese children
    Japanese kids

    It's a bit of a slow news day, so a story on FT.com has caught our eye. For years Tokyo has had a strict 45-decibel noise limit - library levels in short - in its suburbs, but is considering changing it because of... noisy children. Some residents are complaining loudly because noisy kids affect property values, apparently. But it is this quote that really says a great deal about Japan: "Children should be taught to speak and sing at an appropriate volume, and age four is old enough to understand that," said one Tokyo resident.

     
  2.  
    11:12: Irish mortgage arrears

    Ireland's slow recovery in the property market continues to trundle along. The number of Irish households in mortgage arrears for more than 90 days fell to 10.4% the three months to December, down from 11.2% in the previous quarter, Ireland's central bank has said. That's the lowest level since March 2012.

     
  3.  
    10:48: Co-op hires Wilko's Ellis

    The Co-operative Group is hiring Ian Ellis as chief financial officer. He joins from retailer Wilko, where he has the same role.

     
  4.  
    10:32: Currencies

    Sterling slipped against the dollar ahead of the monthly US unemployment figures out at 1330 GMT, down 0.2% to $1.5208. Richard Falkenhall, currency strategist at SEB, said: "This election is very uncertain ... we think the uncertainty created will see sterling lose ground and forecast sterling/dollar to drop below $1.50 in coming months."

     
  5.  
    10:17: Eurozone economy
    euros

    The eurozone economy gathered pace in the last three months of 2014, with Eurostat confirming its earlier estimate of 0.3% growth compared with the three months to September 30 and a 0.9% expansion compared with the same period in 2013. Germany's economy grew by 0.7% quarter-on-quarter, while France managed just 0.1%.

     
  6.  
    10:04: Mike Ashley
    Mike Ashley

    Mike Ashley is a very busy man. Too busy for the entire month of March, it seems, to appear before MPs on the Scottish Affairs committee, who want to ask Mr Ashley about the treatment of workers at the USC fashion chain owned by his Sports Direct. Fortunately chairman Keith Hellawell is able to make the time, though. The MPs would still like to know why Mr Ashley is unavailable during March.

     
  7.  
    09:43: Japan shares

    Japan's Nikkei 225 shares index closed at a 15-year high earlier on the ECB's upward revision for eurozone economic growth and the announcement that it would begin bond buying on Monday. The index rose 1.2% to close at 18,971.

     
  8.  
    09:26: Greece
    Athens

    Greece has paid the first €310m (£223m) instalment of an International Monetary Fund (IMF) loan that falls due this month. The government must pay a total of €1.5bn to the IMF this month over two weeks starting today. Prime minister Alexis Tsipras is reported to have asked for a meeting with European Commission chief Jean-Claude Juncker about the payments.

     
  9.  
    09:09: Eurozone bonds

    Government bond yields in Portugal, Italy and Spain fell to new record lows on Friday, a day after the ECB gave details of its bond-buying plans. Portuguese 10-year yields fell 12 basis points to 1.7%, while Italian and Spanish equivalents fell 5 points to 1.28% and 1.19% respectively. The ECB starts buying government bonds on Monday in a bid to boost growth in the eurozone.

     
  10.  
    Thomas Cook Via Twitter

    Dominic Walsh of The Times tweets: Question is whether, as with Club Med, Fosun has longer-term aim to use minority stake in Thomas Cook as basis for eventual full bid @walshdominic

     
  11.  
    08:47: Market update

    The FTSE 100 Index is 8 points lower at 6,953. Shares in Weir Group are the biggest riser this morning on speculation that the engineering firm may be a bid target following a recent slump in its share price.

     
  12.  
    08:31: Thomas Cook
    Thomas Cook

    Fosun, a Chinese investment firm, has bought a 5% stake in Thomas Cook for £91.9m and plans to increase its holding further. The move follows its purchase of French resort operator Club Med last month. Shares in Thomas Cook have soared 16% higher to 140p.

     
  13.  
    08:17: RBS shares

    Just worth point out that RBS shares are trading at 376.9p and the government needs to sell its stake at an average of 455p per share just to break even on the money it pumped into the bank in 2008 and 2009. Also worth mentioning: Mr Osborne may not be Chancellor after May.

     
  14.  
    08:03: RBS shares
    RBS

    George Osborne has told the Financial Times he made a mistake in not radically restructuring taxpayer-owned Royal Bank of Scotland soon after he came to office in 2010. But the chancellor says he would like to proceed "as quickly as we can to get rid of it" after the general election.

     
  15.  
    07:50: AGA profits

    AGA says operating profit stood at £9.6m, but it booked £4.1m in pensions charges, £3.3m in fair value costs relating to its stake in Fired Earth - its tiles business - leaving it with £2.2m. But that's before £1.5m in net interest charges on its pensions deficit, which doubled in the year from £35m to £72m. That brought pre-tax profits down to just £700,000, and left AGA in no position to pay a dividend. But the company does expect market conditions to improve this year.

     
  16.  
    07:39: Vodafone
    The Hoff

    Vodafone has announced a plan to introduce a mandatory minimum maternity policy in all 30 countries in which it operates. By the end of 2015, all female employees will be offered at least 16 weeks fully paid maternity leave, as well as full pay for a 30-hour week for the first six months after they return to work. David Hasselhoff, however, will not be eligible.

     
  17.  
    07:27: AGA profits
    AGA Rangemaster

    AGA Rangemaster has reported a slight fall in an annual pre-tax profit to £700,000, compared with £1.1m a year earlier. It has also announced it will not be paying a dividend to shareholders.

     
  18.  
    DFS shares Via Twitter

    Retail analyst Nick Bubb tweets: The Chairman of DFS trumpets that it stands for "Dedication, Family and Success". Or Dull Furniture Sale? ;-) @NickBubb1

     
  19.  
    07:15: DFS shares
    DFS

    Buy one, get one half price! Furniture retailer DFS has priced shares at 255p - at the lower end of expectations. The stock starts trading at 0800 today and means the company will be valued at close to £550m.

     
  20.  
    07:02: Eurozone outlook BBC Radio 4

    One thing that may help the eurozone economy is a small but significant accomplishment by the ECB that appears to have gone largely unnoticed. That was last Autumn's asset quality review of the banks, by the ECB which "gave pretty much everybody a clean bill of help", says Mr Cameron Watt. "And that's allowing banks to sell assets off their balance sheets."

     
  21.  
    Greek economy Via Twitter Adam Parsons Business Correspondent

    Former Greek shipping minister @MVarvitsiotis tells #WUTM "we'll do whatever it takes...to stay in Eurozone...leaving would be a disaster" @AdamParsons1

     
  22.  
    06:47: Eurozone outlook BBC Radio 4
    Draghi

    Mr Cameron Watt tells Today: "There is a following wind which is the lower oil price and the material decline in the currency [euro] against the dollar". He says those factors should help boost the eurozone economy, although he he sceptical that it will do as well as ECB president Mario Draghi (pictured) suggested at his press conference on Thursday.

     
  23.  
    06:35: ECB bond buying BBC Radio 4
    The EURO logo is pictured in front of the former headquarter of the European Central Bank

    We're talking quantitative easing (QE) on the Today programme and why it pushes up stock markets. And Ewan Cameron Watt, global chief investment strategist at BlackRock, explains in the most clear terms. It is all about portfolio substitution, of course. "If I buy a whole lot of bonds and give you cash, you have now have to invest that cash," he says. "You don't want to buy bonds because of [current] negative yields, so it forces you to buy riskier assets, which inflates the prices of things like equities." Simples.

     
  24.  
    06:25: Alpacas! Radio 5 live
    Alpacas

    Let's face it - alpacas are a bit weird. But farming the cuddly critters appears to appeal to some who want to escape the rat race, alpaca farmer Mary-Jo Smith tells Wake Up to Money. She says alpaca wool is strong, luxurious and "just amazing to wear". The British Alpaca Society holds its annual show in Telford this weekend.

     
  25.  
    06:15: Insurers v banks Radio 5 live

    Aviva shares ended 7% higher yesterday and Ewen Cameron Watt, chief investment strategist at BlackRock, tells Wake Up to Money it is no surprise that insurers are doing better than banks. He says operating conditions for banks are getting tougher, but some insurers are opting to join forces.

     
  26.  
    06:05: Rangers FC
    A general view of the Ibrox Stadium, in Glasgow,

    It's a big day for Rangers FC as the club holds an emergency meeting where Dave King hopes to oust the board. However, there are question marks over King - who wants to become chairman - because of his convictions in South Africa for tax offences.

     
  27.  
    06:03: Matthew West Business Reporter

    Happy Friday everyone. Don't forget you can get in touch by email at bizlivepage@bbc.co.uk or via twitter @bbcbusiness.

     
  28.  
    06:00: It's Friday Chris Johnston Business Reporter

    Good morning and welcome to the last day of the working week. US unemployment figures are set to dominate the day and are out at 13:30. We'll bring you the reaction to those numbers and all the day's other business news as well.

     

Features

From BBC Capital

Programmes

  • A cyborg cockroachClick Watch

    The cyborg cockroach – why has a computer been attached to this insect’s nervous system?

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.