Going is good for Ireland's horseracing industry

Bluetonic

Going is good for Ireland’s horseracing industry

30 July 2006 By Ed Micheau
Horse Racing Ireland (HRI), the state body charged with running the industry, releases its 2005 annual report this week.

Horse Racing Ireland (HRI), the state body charged with running the industry, releases its 2005 annual report this week. The timing could hardly be more opportune.

More than 200,000 punters are expected to throng to Ballybrit racecourse this week for the Galway Races, the biggest event on the Irish sporting calendar.

The feelgood factor permeating Irish racing shows no sign of abating. Both codes are enjoying phenomenal success - Irish-trained horses won all three big races at Cheltenham in March, while Aidan O’Brien continues to plunder Group 1 victories at home and abroad.

From a business point of view, the deluge of statistics contained in the 2005 annual report would indicate that progress has been made off the track too.



The man charged with ensuring the sums add up, HRI chief executive Brian Kavanagh, rattles off the list of achievements as he sees them.

‘‘2005 was a year of unprecedented success in Irish racing, with numerous big race successes.

“Significant increases were recorded on the commercial front too,” said Kavanagh.

‘‘Attendances reached an all-time high of 1.43 million, there was record Tote turnover of €49 million, while the value of horse sales at public auction increased by 28 per cent.”

But it is the next few years that are most exercising HRI’s attention - Ireland’s horse racing industry is about to undergo a period of massive capital investment, during which more than €200millionwillbe spent.

With HRI putting up €110 million - the balance will come from the individual racecourses - the pressure is on.

Bank loans taken out by the state body, currently at €14million, will rise to over €40 million.

Centre stage in the redevelopment plan are the racecourses at the Curragh and Leopardstown. Each will receive €35million from the state body to demolish existing facilities and replace them with modern stands.

Together, the redevelopment spend on the country’s two premier tracks will eventually top €190 million.

Once completed, capacity at the Curragh will rise by 50 per cent to 45,000.Capacity at Leopardstown will rise only by several thousand but the track will receive a new parade ring and other improved facilities. HRI, it seems, is adopting a ‘flagship’ strategy to racing, complemented by the two dozen other ‘local’ racecourses dotted around the country.

‘‘The Curragh is really only employed for the 19 days a year it hosts race meetings. We want to change that outdated approach.

“The new hotel will be able to cater for functions, weddings and business meetings, and help make the place a year-round facility,” said Kavanagh.

‘‘Leopardstown is something of a sleeping giant - there is certainly untapped potential there. The course has undoubtedly suffered from access problems in the past. But with new access from the completion of theM50 road, that issue is now resolved. Of the 15 meetings held so far in 2006,13 have seen significantly increased attendances.”

Building additional capacity is one thing; ensuring that patrons pass through the turnstiles in sufficient numbers to justify the huge capital expenditure is quite another.

HRI has a target of attracting 1.5 million patrons in 2007, implying that the industry needs to grow its 2005 attendance by less than 5 per cent to reach the figure.

The target should be comfortably attained and, given that racecourses attracted 1.25 million visitors four years ago, it points to a steady and sustainable rise in attendances.

According to Kavanagh, HRI will hope to grow the annual business to between 1.7 million and 1.8 million patrons between now and 2012.

With those numbers in mind, Kavanagh does not buy into the theory that there are simply too many racecourses in Ireland. The quality and the quantity is there, he said.

‘‘If you were to stand back and look at it from a hard, cold economic stance ,you might say that Ireland has too many tracks. We have 26 tracks for a population of four million, whereas Britain has 60 tracks for 59 million, and many of the tracks here are in locations where the property is now more valuable than the racecourses,” he said.

‘‘But there are so many horses in training now in Ireland that we need the tracks we have.

‘‘Most tracks are, at the very least, washing their faces, and part of the charm of Irish racing is the variety of different tracks that are available. I’m not a fan of a centralised approach to racing.”

Nevertheless, Kavanagh acknowledges that a number of the tracks are family-owned and that the ties will diminish with the passing of the businesses from generation to generation.

Inevitably, one or more will succumb to the temptation of soaring land prices and cash in on their valuable assets. When asked which racecourse his money is on to sell up, Kavanagh is untypically coy.

‘‘I’m not telling you that,” he said.

Kavanagh is prepared to front up to the thorny issue of Punchestown. In 2002, HRI stepped in to take up a 50-50 role in the running of the loss-making racecourse.

In recent days, HRI’s partner at Punchestown, the Kildare Hunt Club, has said it wants to sell part of its 466-acre landbank outside Naas to raise funds to repay the US family, the Gettys, following the ‘investment for passports’ saga some years ago, and to reschedule debt.

HRI is implacably opposed to the move, and a stand-off has ensued. Kavanagh said HRI has put an alternative proposal to the Kildare Hunt Club that would enable debt to be rescheduled, but without the need to sell land.

Asked can HRI stop a land sale, Kavanagh replies: ‘‘It is Punchestown land, the members own it.”

Another item on Kavanagh’s desk at present is the current outbreak of Equine Infectious Anaemia, otherwise known as Swamp Fever. The highly contagious infection has so far been contained to about a dozen horses, but it has forced the temporary closure of Troytown Veterinary Hospital in Kildare.

The infection was brought into the country in a serum used to boost the immune systems of foals. If unchecked, it has the potential to wreak havoc on the breeding and racing industry.

Kavanagh said he was satisfied with the response of the Department of Agriculture, but agreed that a review of procedures on the importation of serums might be helpful.

HRI is also preparing for July 31, 2008, when the stallion tax exemption for the breeding industry ends. Kavanagh says he is in the dark regarding discussions taking place between the Department of Finance and the EU Commission on a new tax regime.

‘‘We’re anxious that the new terms be as close as possible to the current terms and certainly not deviate much from the norm in Europe. The accelerated write-down or depreciation of the stallion asset appears to offer a solution,” he said.

In the meantime, Kavanagh is looking forward to the development of potential stallions, starting with the Shelbourne Hotel Goffs Million, which will be run on Tuesday, September 19, to coincide with the staging of the Ryder Cup. As the richest race for two-year-olds in Europe, the racing community is hoping the ‘Million’ acts as an international showcase for the Irish bloodstock industry.

‘‘The ‘Million’ has helped reignite the yearling market.

“Bloodstock sales at auction were up 28 per cent last year, helped by strong domestic interest with the economy going so well. Long may it continue,” he said.

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Babsie

I should have known better.