Newmarket Racecourses, the world’s largest horseracing center, is being hurt by the economic crisis as customers cut back on hospitality spending in the U.K., its managing director said.
“It’s the first time in any of our careers that virtually all of our revenue streams are under pressure,” Newmarket’s Stephen Wallis said in an interview in London. “We haven’t got the same amount of bookings compared with last year. It has dried up.”
Hospitality bookings are down 25 percent compared with the same time last year, Wallis said. The global economic downturn has affected sports including Formula One, Major League Baseball, tennis, golf and soccer. The BNP Paribas Masters tennis event in Paris lost a sponsor because of the credit crunch, while General Motors Corp. last week ended its nine-year endorsement deal with Tiger Woods, the world’s top-ranked golfer, as car sales plummet.
Newmarket this year paid out record prize money of 9.2 million pounds ($13.7 million) for 38 days of racing. Prize money for 2009 will be “slightly up” from this year, Wallis said. Newmarket’s next race meeting will be on April 15.
Spending on hospitality at Newmarket’s Rowley Mile and July racecourses generated more than 3 million pounds this year.
“A lot of hospitality comes from the City,” said Wallis, who was managing director of the Epsom Downs racecourse, home of the Derby, before joining Newmarket last year. “If you’ve made people redundant, then how can you justify spending on hospitality?”
Horse Trouble
There have been other signs of trouble in the country’s horseracing industry.
Tattersalls, the world’s oldest horse auction and Europe’s largest, is based at Newmarket. Its annual sale in October had a 4.5 percent drop in average yearling prices, while Goffs, the Irish auctioneer that’s Tattersalls’ closest competitor, said average prices fell 33 percent at an earlier sale of the best yearlings.
Corporate sponsors generated more than 2 million pounds this year at Newmarket. Wallis expects that number to be the same next year. “We haven’t had a single sponsor pulling out yet. But you need to talk to the sponsors a lot more about the justification,” for spending money, he added.
“It’s a desperate situation out there at the moment,” Edward Stanley, the 19th Earl of Derby and patron of the Horserace Writers & Photographers Association, said at its annual luncheon in London. “I don’t think there is anyone that won’t be affected,” by the economic crisis, he added.
Better Placed?
Still, Newmarket Racecourses may be better placed than some competitors to weather the economic downturn because 80 percent of its racing tickets are bought online, Wallis said.
“We are entering a world where sponsorships will be different in two years’ time from what it is now,” Wallis said. “You have to know your audience. Having a lot of Web bookings puts us in a stronger position,” because it makes it easier to target customers and attract sponsors, he said.
The Newmarket racecourses attracted 375,000 spectators and 20,000 corporate guests this year, while the races reached 9.4 million terrestrial television viewers and 37 million people in betting shop.
Newmarket, which stages elite races such as the 1000 Guineas, 2000 Guineas and the Champion Stakes, is home to 2,500 racehorses and 77 licensed trainers. The town’s 65 stud farms include the National Stud and Dalham Hall Stud, which is owned by Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai.
(Source: Bloomberg)
