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British Horseracing Board Expenditure Reductions Agreed09/12/2004
BHB today expressed its continued confidence of ultimate success in establishing its database right. However, the Board has agreed cost reductions totalling £8.7m to recognise the time that it may take for the necessary legal processes to be completed.
BHB Chairman Martin Broughton said:
'We continue to be reinforced in our view that the Judgement given by the ECJ gives a clear route map to establish a database right and we therefore continue to have a very positive outlook. The more we look at it, the more we see that a reconfiguration of our database processes to fit the ECJ criteria on database rights is straightforward. However, we recognise that the time needed to reach that end position could be lengthy as it could lead to a re-running of the whole legal process. We have therefore taken prudent, early action in order to ensure that BHB remains in a position to fulfil its obligations as the governing body of British Horseracing.
'The expenditure reductions agreed yesterday were recommended by the Executive and unanimously supported by the Board, which took the view that these measures were right for the current time.'
With effect from 1st January 2005, the Owners' Premium Scheme will be suspended. BHB had forecast that payments of £3.2m would be made next year. The Board has also decided to suspend the Development Fund, through which matched prize money funding is offered by BHB to racecourses which stage certain race types, a saving which will amount to £1.9m in 2005. BHB's Marketing budget will be cut from the planned £3.5m to £1.75m.
In addition to these three major items, totalling £6.85m, BHB head office savings of over £1m will arise, including from the decision not to appoint a Recruitment and Development Director, along with some other currently unfilled positions. BHB will also hold discussions with the Equine Fertility Unit and Equine Genetics Research Ltd, having earmarked a total contribution to both areas of £600,000 in 2005.
Broughton also confirmed that, as part of the reduction in Marketing expenditure, the Summer Triple Crown, which was staged in both 2003 and 2004, would not be run in 2005. However, BHB's successful Flat and Jump Awards and the Order of Merit, for which funding is already committed, will continue.
Commenting on the Owners' Premium Scheme, the BHB Chairman emphasised that it was not being terminated, but suspended for the year. He said that he would like to think that, in 12 months' time, the suspension could be lifted.
These measures take into account the most pessimistic scenario in which licensees simply refuse to pay money due under their licences. However, Broughton added that money was continuing to flow and that BHB was in no doubt, having taken extensive legal advice, as to the contractual position. BHB will take robust legal action against licensees who refuse to honour the obligations which are set out clearly in the licences, which they have signed.
He also confirmed that BHB had requested that the Levy Board fund the £2m cost of Regional Racing in 2005, expenditure that BHB had itself met for 2004's inaugural Regional programme. The cost of the staging the Regional fixtures had been exceeded by the levy that they had generated for the sport.
Broughton added: 'We want to be in a position where our infrastructure has not been unnecessarily impacted. While we have identified the further measures which would have to be taken if it transpired that BHB could not establish a database right or its equivalent, we remain confident that these will remain as contingency plans only.'
BHB Chief Executive Greg Nichols emphasised that, despite deciding not to appoint a Recruitment and Development Director, BHB was 'still fully committed' to the Steering Group which is overseeing the next steps arising from the work of the Stable and Stud Staff Commission. He said that 'there will be no impact on strategies and initiatives', adding that alternative administrative arrangements would be put in place in this particular area.
Nichols also expressed optimism that the loss of the Development Fund would not lead to a substantial reduction in the number of important race types being staged. He said: 'We strongly advocate that racecourses continue to put them on, which would be in the best interests of the sport as a whole.'
