Jockey Club hails 2018 performance but warns of pain ahead
The Jockey Club, the UK’s largest commercial horse racing organisation, has reported a 6.7% year-on-year increase in revenue to £214.6m (€248.6m/$277.0m) for 2018, but warned betting shop closures are likely to impact industry growth in 2019.
This represents a tenth consecutive year of commercial growth for the Jockey Club, which owns 15 racetracks including Aintree, Cheltenham and Epsom Downs. Over the past decade, its turnover is up 68.2%, driven by growth in admissions, media, hospitality, commercial partnerships, events, training facilities and breeding services.
This allowed it to contribute £27.1m towards racing prize money in 2018, with the Jockey Club pledging to at least match this contribution in the year ahead.
It comes as other racetrack operators are preparing to reduce their prize contributions, with the industry braced for a drop in media rights revenue as a result of betting shop closures. The decision to cut maximum fixed odds betting terminal (FOBT) stakes to £2 from April 2019 is expected to see up to 1,000 betting shops closed, prompting Arena Racing Company to reduce its contribution to prize pools by 13%.
However the Jockey Club has said it will reduce investment in other areas, such as improving its facilities, to maintain its prize contribution in 2019.
In 2018, the Jockey Club ensured that increases in prize contributions were spread across all race classes, including at grassroots level, where prize pools increased by 34% in 2018.
Across its 15 courses, £53.2m of prize money was distributed across 339 fixtures, a 16.4% year-on-year increase, with average prize money per fixture growing 18% to £157,000.
The increase in revenue led to growth in operating profit before prize money was paid out, up 7.4% from 2017 to £48.1m in 2018. However, the increased prize contributions, coupled with investments in facilities, operations and the sport in general hit post-prize operating profit, which declined marginally to £21.0m.
There was a sharper fall in net profit, which declined 50.5% to £4.5m.
The Jockey Club chief executive Simon Bazalgette hailed progress made over the past ten years. However he also warned that the racetrack operator, and the wider industry, would see earnings hit by betting shop closures in the wake of the FOBT stake cut.
“There’s a lot of positive progress the sport rightly can be proud of, but our next set of results will include the first year of the impact of the changes in the gambling sector and we need to be realistic that we’re now into a time of financial challenge for British Racing,” Bazalgette said.
“If the sport as a whole collaborates, innovates and diversifies, we can come out of the other side in good shape,” he said. “At our core we have a lot of resilience and we need to keep up the good work going on in growing our fan base and not lose sight of the huge role the British public has played in making us Britain’s second biggest spectator sport.
“What we can guarantee in uncertain times is that The Jockey Club will do everything in our power to support the sport along the way.”