British Racings Finances: A Ferrari with the Handbrake On, a Fuel Leak, and a Missing Driver

Julie Harrington, the outgoing chief executive of the British Horseracing Authority (BHA), once likened British racing to a Ferrari with the handbrake on. A powerful machine stuck in neutral, its potential wasted. Yet, after several years at the wheel, Harrington has decided to abandon ship, taking some of the board with her and leaving the next chief executive with the unenviable task of fixing a sport in crisis. Her Ferrari metaphor works, but here’s the problem: she’s not just left the handbrake on; the car’s leaking fuel, no one can agree on how to fix it, and the new driver has to deal with a pile-up before they’ve even started.

Harrington’s tenure has been defined by talk of transparency, reform, and modernisation, but in reality, the sport’s finances are as murky as ever. Despite millions being pumped into British racing from multiple revenue streams, prize money is plummeting (in real terms), stakeholders are pulling in different directions, and now, with Harrington jumping ship, it’s the new CEO who will have to take the wheel, find the gas pedal, and get the sport back on track.

The Prize Money Crisis: A Ferrari Without Fuel

Let’s start with the obvious: prize money. On any given day, British races are struggling to offer more than £5,000 to the winner. This leaves owners—who are spending vast sums on breeding, training, and racing—competing for what amounts to little more than pocket change. Prize money has become a running joke, but it’s a joke that leaves nobody laughing. Under Harrington’s leadership, the situation has deteriorated, with lower prize money predicted for 2024. This isn’t just a blow to owners and trainers, but to the entire future of the sport.

Here’s where things get confusing: despite the prize money crisis, British racing is awash with cash. So, where is all the money going? Let’s take a look at the main revenue streams flowing into the sport:

1. Bookmaker Contributions:
   Betting is the lifeblood of British racing. The Horserace Betting Levy, a tax on bookmakers’ profits from racing, contributed £99 million in 2022. On top of this, media rights payments from bookmakers to racecourses for the right to stream races are thought to bring in a massive £250 million annually. Yet, despite this cash inflow, racecourses continue to plead poverty and insist on cutting prize money.

2. Racecourse Revenues:
   Racecourses are also pulling in serious money. Between ticket sales, hospitality packages, sponsorship deals, and owners' contributions (which account for another £60-80 million annually), racecourses are taking home an estimated £80-100 million annually from race day operations alone. It’s hard to square these sums with the racecourses’ insistence that they can’t afford to raise—or even maintain—prize money levels.

3. Overseas Media Rights:
   British racing is a global export. International media rights payments, particularly for high-profile events like Royal Ascot, contribute an estimated £30-40 million annually to the sport’s income. This revenue is crucial, yet it’s unclear how much of it is being reinvested in the sport or distributed to those who keep racing going—owners, trainers, and jockeys.

4. World Pool Money:
   The World Pool, an innovative system that allows international punters to bet into one large pool for certain British races, has proven to be a financial windfall. These events generate millions for British racecourses. But again, transparency is lacking. Where is all this money going, and why isn’t it making all its way into prize pots? Secrecy at work again!

5. Tote Payments:
   The Tote, once a major player in pool betting, continues to make payments to racecourses, estimated to contribute under a million annually. But without clear accounting, it’s impossible to track how much of this is helping to fund prize money or if it’s simply disappearing into the racecourse coffers.

6. Racecourse receipts (ticket sales, entertainment, etc.): Estimated £150-200 million annually

The Black Hole: Where’s the Money Going?

So, with an estimated £750 million flowing into British racing annually, why is the sport still talking about lower prize money £170M (currently) and financial headwinds? The answer, as it has been for years, lies in a lack of transparency. Despite calls for greater openness, racecourses continue to hide behind the smokescreen of “commercial confidentiality,” refusing to reveal the full extent of their media rights and other revenue streams.

Under Julie Harrington’s leadership, the sport has talked about transparency, but little has been done to enforce it. Julian Richmond-Watson, chairman of the Thoroughbred Group, has repeatedly called for racecourses to open their books, and he’s right to do so. Without transparency, trust continues to erode, and it’s impossible to know if racecourses are genuinely struggling or simply hoarding the cash while others, particularly owners and trainers, are left fighting over the scraps.

The truth is, Harrington’s leadership has left British racing with more questions than answers. By failing to enforce transparency and leaving the financial system shrouded in mystery, she’s passed the buck to the next CEO, who now faces the monumental task of untangling the sport’s finances.

Stakeholders Stuck in Self-Interest Bubbles

One of the biggest obstacles to progress in British racing has been the way stakeholders operate in self-interest bubbles. Owners, trainers, racecourses, and bookmakers are all pulling in different directions, with each group more focused on protecting its own income than working together to secure the future of the sport. It’s a factional free-for-all, and the result is a sport that’s stuck in neutral.

Julie Harrington acknowledged this problem, but acknowledgment without action is useless. What British racing needs is a leader who can break through the entrenched positions of the various stakeholders and force collaboration. Instead, Harrington has played the role of a referee in a never-ending match of squabbling, with racecourses emerging as the main beneficiaries while everyone else—particularly owners and trainers—get left behind.

Affordability Checks: The Nightmare on the Horizon

As if the financial woes within the sport weren’t enough, racing now faces a potentially existential crisis: affordability checks. These checks, designed to prevent problem gambling, could wreak havoc on the sport’s revenue if they’re not handled with care. While the aim is to ensure punters aren’t betting beyond their means, the proposed measures risk being overly intrusive, driving punters away altogether.

Imagine you’re a casual bettor, wanting to place a £10 bet on a race, only to be asked for bank statements and proof of income. Unsurprisingly, most punters won’t bother. Tony Bloom, owner of Brighton football club and a prominent figure in racing, has already warned that these checks could drive away responsible bettors, creating a catastrophic drop in turnover. And with racing relying heavily on betting income, the impact could be severe.

Betting funds the sport—whether through the Levy, media rights, or bookmaker sponsorships. If affordability checks drive punters away and cause a drop in turnover, British racing could lose its biggest source of income almost overnight. While Harrington has acknowledged the problem, her leadership has once again been reactive rather than proactive, leaving the new CEO to deal with the fallout.

The New CEO’s Dilemma: Racing in Reverse?

With Harrington and some of the board jumping ship, the new CEO will be left to clean up the mess. The prize money crisis, the lack of transparency, the self-interest of stakeholders, and the looming affordability checks all combine to create a monumental challenge for the next leader of British racing. The prize money cuts predicted for 2024 are just the tip of the iceberg. If things don’t change quickly, owners will begin to leave the sport, trainers will go out of business, and the very fabric of British racing will start to unravel.

It’s tragic, really. British racing remains one of the most prestigious and globally respected sports. It has the best horses, passionate fans, and a global appeal that should make it a financial juggernaut. But instead, it’s leaking money, embroiled in factional disputes, and heading towards a financial disaster. The sad irony is that all of this could have been avoided with stronger leadership.

Time for Action, Not More Talk

If British racing is to have any hope of reversing its fortunes, the new CEO must take immediate, decisive action. First and foremost, the sport needs full transparency around its finances. Racecourses must open their books and clearly show where the money is going. Without transparency, trust will remain broken, and the sport will never get out of the financial quagmire it’s in.

Secondly, the issue of affordability checks needs urgent attention. Responsible gambling is crucial, but the sport must work with regulators to ensure these checks are not so invasive that they drive punters away and gut racing’s revenue streams. The new CEO can’t afford to be reactive like Harrington—they need to get ahead of the issue before it’s too late.

Finally, British racing’s new leader must find a way to break the self-interest deadlock. Owners, trainers, racecourses, and bookmakers must be brought together to work towards the common good. Without collaboration, the sport will continue to operate like a Ferrari with a stuck handbrake—full of potential, but never quite reaching its destination.

Final Lap: The Clock is Ticking

The Ferrari metaphor Julie Harrington used has never felt more apt, but as she departs, the next driver will have to deal with a Ferrari that’s not just stuck—it’s dangerously close to running out of road. There’s still time to get British racing moving, but it will take more than words. It will take a CEO willing to pull off the handbrake, fix the leaks, and put the pedal to the metal. Otherwise, British racing’s Ferrari won’t just be stuck—it’ll be headed straight for the scrapyard.