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SBD Global/June 19, 2013/Finance

Study Reveals That British Horse Racing Generated £3.5B For British Economy In '12

Study claims horse racing industry worth £3.5B to British economy.
British horse racing has had an overall impact of £3.5B on the British economy in '12, according to the "Economic Impact of British Racing 2013" published by the British Horseracing Authority and Deloitte. The figure is only a marginal rise since the last report in '09. However, once inflation is factored in the overall result is one of minor contraction of around 1.2%, only slightly greater than that for the wider economy. Racing remains the second largest sport in Britain on most metrics, including attendances, with a total attendance figure of 5.6 million in '12 despite competition from the London Olympics and the exceptionally wet weather prompting a record number of abandoned fixtures in the summer. Excluding the London Olympic and Paralympic Games, horse racing accounted for four of the top-10 attended sporting events in Britain in '12. The sport employs 17,400 full-time equivalents and more than 22,000 individuals in full-time and part-time roles. These employees were a significant contributory factor in the £275M plus tax generated by the sport, though they represent an 8% decrease in employment in response to lower activity levels and cost reduction. Media rights was the area of largest growth in the industry, generating £173M, up from £104M in the '09 report. These increased media rights contributed heavily to racecourse cashflows being up by 1% overall, despite a marked decline in funds from the Levy. Almost £950M of capital investment has been made over the last decade in the industry's infrastructure, more than £700M of which is at racecourses. The majority of this investment was made in the earlier part of the decade. Every £1 spent in the horse racing industry generates an additional spend of £1.53 in the wider, particularly rural, economy through secondary and business-to-business expenditure. Owners' gross expenditure was £389M, while receiving an income of £85M through prize money and sponsorship, down from £92M in '08 (BHA).

CONCERN GROWING: In N.Y., Ryan Goldberg reported many in the industry "acknowledge great concern over racing’s financial future, none more so than horse owners." British trainer Mark Johnston said, "We’re seeing a situation now where prize money for many of our races is less than it was 10 years ago." Yet despite its poor return, Britain "still hosts some of the best racing in the world." In '11, six of the 10 fastest horses in the world "called the country home," and eight of the 10 fastest ratings "came on British racecourses." Last year, the undefeated British superhorse Frankel "drew crowds worthy of the Beatles." Johnston: "Our racing is holding its head up very well indeed. But on a financial front -- that’s where the problems are here" (N.Y. TIMES, 6/17).
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